Bielby: Tough lessons of 2021 show resilience
FWD Chief Executive James Bielby picks out the positives of a turbulent 2021 to highlight the strengths of the wholesale sector and why it stands the industry in good stead for the next 12 months
At the recent FWD Gold Medal Awards, we celebrated the extraordinary achievements of people within the wholesale sector under the harshest trading conditions any of us have ever experienced. There were so many stories of exceptional commitment and amazing contributions that helped businesses transform to meet new challenges.
If the worst impacts of Covid and Brexit are now behind us (and that’s by no means assured, by the way), we can take a minute to consider how the wholesale sector has changed over the year.
It’s probably worth going back a bit further – to March 2020 – and the beginning of a defining era for food distribution. This was an industry which had already been told three times to prepare for the seismic shock of a no-deal Brexit, so when Covid-19 struck, wholesalers had some scenario contingencies in place.
Through panic buying in retail and the closure of foodservice wholesalers’ hospitality customers, the supply chain was frequently strained but it never broke. To me, the most impressive achievement of this period is that despite everything thrown at them, we didn’t lose a single FWD wholesaler to financial collapse. We always talk about the ingenuity, agility and resilience of the sector – there’s your proof.
The Covid crisis may even have forced some businesses to make the digital leap they’d been putting off for years and introduce online sales platforms. In some cases, this was long overdue and much-needed. What may have been a steep learning curve is now a steepening profit line and opens up new customer groups, including direct sales to consumers.
Our newly crowned Gold Medal Retail Wholesaler, Parfett’s, was one of the first to realise a 24-hour depot could be both a collection destination and a delivery hub.
Depot owners suddenly have a promising variety of uses for their space. They’re seeing partnerships with last-mile B2C delivery services for both grocery and prepared meals, and perhaps beyond that, the prospect of dark stores and kitchens aligned to wholesalers – something which even a year ago may have felt beyond their grasp.
It’s ironic, of course, that just as demand began to recover in the early summer, supply started to falter. The labour shortages in food production and distribution were mirrored in fuel and packaging supply chains. Again, it’s incredible how well wholesalers adapted to the drop in availability and managed their customers’ expectations as inbound delivery plummeted.
None of these challenges are over yet and with costs sure to increase, we’re going to need a lot more of that flexibility and honest conversation between suppliers, wholesalers and customers in the coming year.
At FWD, we’re charged by our members to represent their interests to government. Primary among those is some long-overdue financial support to recognise the massive sacrifice of those who traded at a loss to supply vital public sector contracts and struggling hospitality clients throughout the pandemic. There’s been no bigger frustration over the past 18 months than having to repeatedly explain to ministers and officials that you can’t feed a nation through supermarkets alone.
Legislation currently passing through Parliament will finally give wholesalers access to business rates relief when a £1.5bn fund is released in the new year.
That’s a start, but our focus for 2022 has to be on making sure the voice of the wholesale sector doesn’t get lost in the louder shouts and deep pockets of national multiple retailers and restaurant groups. This is just as vital in our discussions with government about its health, sustainability and food supply chain resilience agendas as it is in our members’ discussions with suppliers about allocation and prioritisation.
Next year will bring a fresh set of challenges, starting literally on day one with the changes in rules for imports from the EU on 1 January. By the end of the year we will have had to prepare for new ways of working with plastic and other packaging materials, harsher restrictions on less healthy food, and a long-term upward trend in fuel, energy, wage and stock costs. Looking at what’s currently going on across Europe, we could even have to navigate further lockdowns or restrictions on trade.
If it wasn’t for the superb way wholesale distributors absorbed everything that 2020 and 2021 threw at them, I might be worried about the future. As it is, I’m full of optimism that our members and their supply chain partners will carry on the invention and innovation for the past two years, finding opportunities in change and inspiration in adversity.Brexit covid-19 FWD Gold Medals James Bielby stock shortages