Buying groups: Group thinking
As the wholesale sector picks itself up after the Covid-19 pandemic, buying group leaders and industry specialists tell us what we can expect from some of the sector’s biggest businesses in the coming months
GARY MULLINEUX, MANAGING DIRECTOR, CATERFORCE
What are the latest goings-on at Caterforce?
We’ve seen a lot of changes in the past 15 months at Caterforce and we’re in a strong position now, with a supportive board and a great Caterforce team who are focused on driving the business forward and delivering the long-term strategy for the group.
Now the worst of the Covid-19 pandemic is, hopefully, behind us, how do you see the foodservice sector recovering?
That depends on the government’s commitment to the planned roadmap. If all restrictions are lifted on 21 June, then the industry has a fighting chance. As we come out of lockdown, the biggest challenges for wholesalers will be product availability and retention of operations staff as there is increasing demand for home deliveries. However, I believe Caterforce is in a good position to see growth as we have strong member coverage in rural and coastal areas. Staycations will be key for us this year and we expect the season will extend into October.
Are there any stand-out examples of activities that epitomise Caterforce’s reaction to the Covid-19 crisis?
Our members are all independent, family run wholesalers with loyal customers. Throughout lockdown they pivoted their businesses to support their local communities at a time when people were struggling to get hold of essential items in supermarkets.
All our members sent excess stock to local food banks and some, such as Lynas and Castell Howell, won large-scale government contracts to supply food boxes to vulnerable people. In the midst of the crisis, Castell Howell won The Grocer’s Gold Award for Regional Wholesaler of the Year, which was a fantastic achievement.
With the support of FWD, we also used our influence to petition government for business rates relief.
What are Caterforce’s plans to go forward from the uncertainty?
It has never been more important to understand who your customers are and what they want. At Caterforce, we know data is the key to attaining these insights and so in 2020 we made a conscious decision to invest more in data-rich technology.
We launched the Caterforce Sales Hub in April 2021 and we’re also running digital marketing activity across the group to provide our members with unique insights.
Our customer base has evolved over the past 15 months and we believe this will aid our growth post-pandemic.
You’ve taken a keen focus on data and e-commerce; are these the two main areas where Caterforce sees growth in the sector?
These are two key areas we have invested in over the past 12 months. Customers have come to expect convenience and an Amazon-style online experience and so we’re supporting our members to achieve this. However, this is only part of the solution. It’s vital our members have the right quality products, strong commercials and outstanding customer service if they are to be best in class.
TOM GITTINS, MANAGING DIRECTOR, CONFEX
What are the latest goings-on at Confex?
Confex has welcomed 22 new member wholesalers since the start of 2020, growing our group buying power to £2.81bn turnover. Last year was one of change for the entire world, with Confex focusing on adding value to our wholesale members during the pandemic. The member-led board approved the move to a profit-share model, while we’ve launched our CORE own-brand range with more than 300 SKUs to help our wholesalers improve margins and win new customers.
Now the worst of the Covid-19 pandemic is, hopefully, behind us, how do you see the foodservice sector recovering?
We’re hoping for a long, hot summer. And an increase in staycations due to the uncertainty of foreign travel will help to kick-start the hospitality sector, while our new CORE own-brand range, exclusively available to Confex wholesalers, offers the perfect fit for those outlets looking to grow sales across foodservice.
You also work with some retail-facing customers; what are your priorities on this side of things?
We’re launching a new Food To Go Club designed to maximise the opportunity of the meal deal across wholesalers’ customers. Combined with our new-look Retail Club, we’re looking to capitalise on the increase in convenience store footfall post-pandemic and offer great value for those consumers who like to shop local.
In what ways have you adapted the business since Covid hit?
Confex head office has moved to a full-time home-working environment, with a hot-desking office for all staff and supplier meetings. This has led to a paperless office, along with a reduction of 70% of our head office carbon footprint.
Sustainability and the environment remain a key element of the Confex wholesaler ethos, with our Green Wholesaler Awards now in their eighth year.
Our members continue to lead the way across digital, driven by an investment in D2C selling and home delivery, which has been accelerated by consumer demand during the pandemic. Data continues to drive Confex wholesalers’ business decisions and we have reacted by launching a data-insight programme this July to help drive further sales growth among our suppliers.
Confex has been adding to its CORE own-brand line in the past year. Why is own brand so key to the business?
We see own brand as a key tool for growth among our wholesalers. Our CORE own brand works in tandem with a branded offering, facilitating the needs of the customer in terms of quality and consistency. Our board decided the time to launch CORE was in line with the reopening of hospitality and gives the Confex wholesaler a point of difference, while being able to help their customers with a quality range at a great price. We’ll look to continue to develop CORE into more product categories, including licensed and grocery, later this year.
With sustainability back on the agenda, how is Confex playing a role in improving the sector’s carbon footprint?
We are working with Inspired Energy to map each Confex member’s carbon footprint, putting in place action plans to help achieve the UK’s commitment to net zero by 2050. Confex members remain passionate about their CSR commitments and head office is here to offer the advice required in order to allow them to exceed their targets. Many of our wholesalers have already made significant energy savings by focusing on sustainability and the environment, and we try to use these case studies to share best practice so that everyone can benefit.
JOHN KINNEY, MANAGING DIRECTOR, UNITAS
Has the business changed in any way since Covid hit?
Throughout the crisis, we’ve taken a blended approach to our working practices and have continued to support members without jeopardising any of the membership benefits. We’ve continued to provide a complete promotional programme, as well as negotiate annual terms on behalf of our membership.
Are there any stand-out examples of projects that epitomise your reaction to the crisis?
Yes, the launch of the Digital Excellence Academy (DEA) in February. Given that so many organisations had to adapt and move their businesses online with speed and dexterity, the DEA launched at the perfect time, with the member-exclusive event focusing on best practice for B2B wholesale transactional platforms, including websites and apps. The first event focused on retail-led wholesalers and was open to employees from any Unitas member. Following the event, members could register for a free online audit, as well as access a host of tools to improve their online transactional offer.
How are you supporting retail-facing members?
We’ll continue to support our retail-facing members with the negotiation of strong deals across all categories, which can then be passed on to their retail customers. In addition to providing 17 three-weekly promotions with supporting brochures and point of sale, we also provide a wide portfolio of tools for members and their customers, such as the Plan for Profit web and app, InStore digital magazine, a series of category guides covering grocery, impulse, licensed and tobacco, along with the newest publication to our portfolio, Focus On, which are mini guides providing detailed information regarding specific product categories. A rationalisation and refresh of the Lifestyle own brand continues supporting members with a strong, core own-brand range at great value for money. We’ve also negotiated with Morrison’s Wholesale on behalf of our members to buy into 35 Safeway ambient own-brand products to complement the Lifestyle own-brand range.
How are you supporting foodservice-facing members?
The launch in September 2020 of Bar & Kitchen magazine with a supporting website has been hugely successful in supporting end-users in getting back to business. In-depot display boards to highlight publications have been introduced to member depots and a refresh of our Caterer Specials deals brochure launched in May, which includes a number of exclusive, deep-cut deals. Additionally, the Unitas Wholesale board approved a recommendation that all out-of-home members operating primarily in the foodservice or on-trade channels would be offered the opportunity to take a 30% reduction in their membership fees for 2021/22.
NEIL TURTON, MANAGING DIRECTOR, SUGRO
What’s the latest at Sugro?
Sugro had a great year of growth. We recruited four new members this year, adding £24 million to the group’s turnover that added to organic growth of existing members and took the total combined turnover of Sugro members to £1.5 billion.
The group’s diversification into grocery, toiletries and household categories continues at speed, with more than 40 new suppliers coming on-board in the past two years.
Are there any stand-out examples of projects/activities (either Sugro or within the membership) that epitomise a reaction to the crisis?
Businesses have struggled to stay relevant during the extraordinary circumstances. Sugro members embraced new ways of doing business and adapted their business models rapidly by selling direct to consumers. They also embarked on a digital commerce journey, with some members reporting up to 30% of their total sales now going through the app. Many wholesalers moved into grocery due to significant demand for canned, tinned and packaged grocery items.
Despite the difficulties, Sugro made a 12% increase in 2020. What’s the secret to your success?
Last year was remarkable for Sugro and we grew by +12% year-on-year. Sugro members, suppliers and the head office team have all certainly shown resilience since the pandemic hit.
We’ve come together, with daily communication being key and as a member-owned company with a strong family culture. At Sugro head office, we kept close to our members with regular video meetings throughout the pandemic.
What are the key projects you’ve been working on?
Sugro has been helping members to embrace technological advancements via our central digital app solution, with many members having already taken advantage of the platform. Digital is a big part of Sugro’s three-year strategy and our aim is to help every member to digitalise their offering.
We’ve recently launched the Sugro Sample Box initiative to showcase new lines and to help members with maximising sales and distribution opportunities with key supply partners. The advantage of the initiative is that we’re doing it in partnership with one of our own members – Andy Needham at Morris & Son via their Approved Food division.
Expanding more on working closely with our members, we have recently partnered with another member, Forrest Fresh Foods, on a central distribution project, which will allow smaller members to mix and match orders without having to order large quantities of new categories or slower-moving goods.
The most recent development of the group is Sugro’s partnership with Enable, a market-leading B2B rebate management software provider. By working with them in this area, we will be able to widen the services we make available to our members to allow them to track their rebate and deal target performance levels.
DAVID LUNT, MANAGING DIRECTOR, NATIONAL BUYING CONSORTIUM
What’s the latest at NBC?
We’re busy supporting members as they restart their businesses as the economy starts to open up. Primarily, this is through NDN, our central warehousing and logistics service. We then expect to support further with marketing initiatives, such as our bespoke brochure service.
We see the sector recovering quickly in terms of revenues. Perhaps profits will take some while to recover as most of our members, like the rest of the industry, didn’t see as much government support forthcoming in the way other sectors did.
The pandemic came at a time when NBC was still in its relative infancy. What impact did it have?
Although the group was a newcomer, most members are well-established. Some closed because of their customer base and others re-engineered their business model to ensure survival in the early days of the pandemic. NBC was able to continue to provide a full service through our NDN. The biggest issue everyone faced was remaining open with a limited customer base, but we helped every member get some government support.
How have things progressed since NBC formed in 2019?
Very well indeed. We’ve grown membership, put annual plans in place for more than 50 business-critical suppliant partners and exceeded our expectations for the level of business flowing through NDN – it really is one of our crown jewels.
Our key priorities for the coming months are service levels, and inbound and outbound, while working collaboratively with our members and supplier partners to maximise availability.
You’ve recently reshuffled the NBC management team. How does this strengthen the group?
As a truly member-owned group, having a say in how things work is important. Our current chairman and vice chairman play an important part in representing the group within the industry and part of the management team reviewing how the day-to-day business is progressing. These roles rotate so all members will have an opportunity to play a part in being the guardians of the group.
What’s your growth strategy?
Simplicity is key. We aim to develop our core suppliers’ business with our current members, utilise NDN to support members and suppliers with great prices and smaller minimum orders, and attract like-minded businesses to become NBC members through shareholding.
ROB MANNION, CEO, B2B.STORE
The Covid-19 pandemic created huge challenges for wholesalers, with the value and support offered to members by buying groups brought into sharp relief as their members faced contrasting challenges, from surges in demand to vanishing markets.
As one of the only consistent growth channels in the sector, we were already working with a number of buying groups to help their members get their depots online. The pandemic accelerated this, bringing forward the launch of b2b.store as our freemium e-commerce offer, which helps wholesalers sell online and reach new markets within a matter of days.
Since its launch just over 12 months ago, more than 60 wholesalers have signed up, including members of the Confex, Fairway Foods, Sterling Supergroup, Sugro and Unitas buying groups, whose apps have already processed more than 13,000 orders.
As we move out of lockdown for, hopefully, the last time, we expect adoption of digital ordering to continue.
The power of digital is it allows wholesalers to be even more responsive to their customers’ changing needs than ever before. For example, during last year’s lockdowns, we were able to identify product trends within a matter of hours of policy changes being announced. With customers using online-ordering services to update or amend orders 24/7, those trends are quicker than ever to identify and respond to.
While we expect a surge in demand in the foodservice sector as social restrictions lift this summer (assuming we avoid further lockdowns), we’d expect demand to fall back into more seasonal buying patterns. This is more predictable but by making use of digital communications tools, such as in-app messaging, wholesalers can focus their attentions on proactive marketing campaigns to boost basket sizes and value.
The key to the sector’s ongoing success is to adapt to changing circumstances and that holds true for b2b.store as much as it does for our wholesale customers. We’re continually listening to user feedback to identify new software and feature updates that will both improve wholesalers’ and their customers’ online experience and provide wholesalers with valuable insights to inform their commercial strategy.
We’re also working with buying groups to help them add value for members by providing subsidised use of premium features on b2b.store and developing centralised advertising for group members.
Our focus isn’t just on getting wholesale customers online but making sure they and their customers have a good e-commerce experience. By putting their needs at the heart of the platform’s development, every b2b.store customer is empowered to shape the e-commerce offer to meet their needs.”
TANYA PEPIN, DIRECTOR, TWC
We consider ourselves to be ex-wholesalers and are proud of it. The founders of TWC met at Landmark Wholesale but the whole TWC team would say wholesale is in our DNA. We’ve provided data platforms, market intelligence and technology/consultancy services to wholesalers and suppliers for the past 20 years.
Certainly, one reason we have so many buying groups as clients is because we get them. But it’s more than that. We understand the benefits of group trading as well as the complexities. Our solutions have been designed to work with multiple data sets, different operating models and various user needs, which are the basic requirements of a buying group.
The power of data
TWC has been talking about the power of data within wholesale for a long time and the sector is beginning to understand this challenge. Confex is launching a data solution and Country Range Group continued to actively mine its data on our platform.
Unitas has extended and developed its data service, as well as engaging TWC to undertake specialist category management research.
But there is much more to do. With Amazon Fresh now on the high street and TWC research highlighting that 60% of the population regularly shops Amazon online, it is essential that wholesalers and their customers keep pace.
We believe the next frontier is personalisation. Wholesalers already capture detailed shopper behaviour data and c-stores and hospitality venues can do the same. Our industry must start to tailor offers to customer segments and drive upsell via increased customer distribution and rate of sale, and all through personalised messaging. Watch this space for new TWC products to meet this need.”
RICHARD FLETCHER, MANAGING DIRECTOR, FOODSERVICE ONLINE
Whether we’re discussing e-commerce with buying groups or individual wholesalers, our message remains the same: foodservice wholesalers should have no higher priority than e-commerce transformation.
Caterers have new expectations and foodservice wholesale professionals must ensure they’re positioning their companies for success.
Businesses must invest in e-commerce to ensure they remain competitive and make the most of new and exciting ways to grow and become more profitable.
We’re in a period of immense growth for e-commerce in the foodservice sector, where the number of online orders, GMV and customer interactions is increasing exponentially.
According to the 2020 Wholesale Online Ordering Trends in Catering report, more than 83% of caterers now use the internet to purchase catering supplies – and 60% say they are more likely to use a catering supplier who has a modern online ordering platform. In addition, 70% of caterers say they prefer to research new products and services online.
These statistics are a warning to senior executives who are failing to make progress when it comes to transformative e-commerce improvements, including the strategy, technology and skills that are required to support this.
Both buying groups and individual wholesalers must look to new technology that can help them implement e-commerce services and manage data, in particular product data, which is arguably the most important pillar of a successful e-commerce strategy.
They also need to develop relationships with their ERP/ back-office providers so that essential business data is more accessible. Customer, product, sales, orders, pricing and stock information all need to be integrated and flow seamlessly between disparate third-party systems and not be locked away.
Furthermore, organisations that are attempting e-commerce transformation must ensure the level of investment and ambition is sufficient when it comes to makingkey business functions, such as online ordering, marketing and customer service, truly fit for purpose in the digital age.
And finally (we would say this), it’s essential to choose an e-commerce partner that has the right experience, can support your organisation for the long-term and increase your chances of success.”b2b.store buying group Caterforce Confex David Lunt Foodservice Online Gary Mullineux John Kinney National Buying Consortium Neil Turton Richard Fletcher Rob Mannion Sugro Tanya Pepin Tom Gittins TWC Unitas Wholesale