On the evening of Monday 4 April 2016, Ken McMeikan, Group Chief Executive, Brakes Group, delivered the Arena Savoy Lecture and joined the line of illustrious industry leaders to address foodservice and hospitality colleagues on the topics of the day at this esteemed event.
Take a look at the attendee list for this event.
At 7pm on Monday 4 April 2016, the atmosphere in the ballroom at The Savoy was electric. Having seized the opportunity to interact with colleagues during the lively drinks reception that kicked off the evening, over 220 hospitality and foodservice professionals were taking their places for dinner and anticipating the main event – the keynote address by Ken McMeikan, Group Chief Executive, Brakes Group.
Introduced by Arena’s interim chairman, Andy Kemp, Ken delivered a fast-paced and often witty insight into Brakes Group, the growth of the eating out of home market and the challenges facing the foodservice industry.
Ken joined Brakes Group and the delivered wholesale sector in 2013 following a quarter of a century in retail and manufacturing. On both sides of the fence, food and service have always been at the heart of his career.
Brakes is the leading Pan-European foodservice business with 21% of the UK market, 6% in France and 14% in Sweden, and delivering to over 200,000 customers sites across Europe every day. He told the audience that everyone in the room had probably had Brakes in their life at some point – through contact with schools, universities and hospitals to pubs, restaurants, hotels, care homes and even prisons.
It’s been a dynamic and progressive three years at Brakes since Ken took the driving seat: sales have grown by £1bn through organic growth and acquisition; four new regional distribution centres have been built or added; over £125m has been invested in infrastructure projects across the group, predominantly in the UK; major transformation deals have been undertaken, including partnering with Fresh Direct and acquiring Davigel form Nestlé; and, the big news of 2016, Brakes Group was acquired by Sysco in a cash deal for $3.1bn, which will support significant growth across Europe and present great opportunities for the business, its customers and its suppliers.
Turning his attention to the eating out of home market, Ken enthused about the excellent growth that has been enjoyed over the past 30 years and is set to continue. Ken attributes this to three key factors: rising population sizes, with the UK population forecast to increase by 4.5million in the next decade; the rise of women in work, which has seen duel income households escalate from 25% in 1960 to 60% in 2010 and has reduced time spent in the home; and the growth of tourism, with January 2016 marking a new January record of inbound visits at over 2.5 million – 6% more than 2015.
A barrage of impressive facts and statistics outlined the shape of the market, including: 1 million more adults ate out during 2015; 25% eating out regularly are from generation Y (18-34 year olds); food quality is now the number one reason for choosing an outlet; and new food business rates are very high, as, sadly, are the rates of failure. Ken spoke of the ‘churn rate’ of food enterprises and stated that the industry needs to find new ways to help businesses grow because their growth creates a thriving industry.
Looking forward five years, the hot trends to expect include a growth in fresh (which is growing faster than frozen and ambient), the continued rise of casual dining, ongoing excitement around food-to-go and authentic tasting food from around the world, and demand for locally sourced product and provenance.
Making comparisons to the retail sector, Ken stated that in 2013, when he joined Brakes, our sector was 10-15 years behind in some areas. Through innovation the gap is closing but he feels that we have to go faster and embrace developments such as e-commerce, data analytics and online order tracking. In a world where the number of internet users has increased seven-fold to 3.2billion since 2000, with the number of people accessing the internet on phones and tablets predicted to reach 7.6billion by 2020, technological advances will revolutionise hospitality and delivered wholesale. Ken said: “The innovations seen in business to consumers need to be translated to business to business.”
Next, Ken gave caution to the risks and pressures that future growth could bring – namely, cost challenges, skill shortages and obesity.
He cited the National Living Wage as a change that will affect hospitality. He spoke of his belief in fair wages for industry colleagues but his despair that the Government legislated for this wage increase without proper consultation. He warned of the greater need for efficiencies to pay for the wage rises and potential increases in food prices.
Speaking of skill shortages, he explained that 51% of catering colleges have seen enrolments drop. He warned that our growing sector could be limited by lack of people and relevant skills, and declared that we need to make career options more attractive and exciting to young people, akin to the likes of Google. Ken stated: “By nature the food industry is creative and entrepreneurial. We are as exciting as other industries.”
The final challenge is the much-debated topic of obesity and sugar consumption. With over 60% of UK adults and 30% of UK children overweight or obese something must be done. Ken doesn’t believe that the food industry is responsible for what people eat as there has to be personal responsibility, but as food experts we can be at the forefront of sugar reduction in food, in the same way we addressed salt reduction and the removal of trans fats.
Ken wrapped up his speech with a topic he is clearly very passionate about – poverty and the industry’s responsibility to help those less privileged. He proclaimed: “Hunger is caused by poverty and inequality and not food scarcity. The world produces more than one and half times enough food to feed everyone on the planet.”
He explained that 28% of children in the UK live in poverty and for one in four children the school lunch is the only hot meal they get. To tackle the issue of child poverty Brakes has launched ‘Meals & More’ clubs that run after school and during school holidays and aim to combat ‘holiday hunger’ and support disadvantaged children and their families. Currently supported by 31 suppliers, Ken urged the industry to unite around the issue and get on board so that more clubs can be launched.
During the question and answer session Ken was challenged on issues such as successful leadership and the Europe debate, on which he commented that the uncertainty is very unhelpful and confirmed his stance that we are much stronger within Europe.
After dinner, Andy Kemp took to the stage once more to make a very special announcement and appointment. He officially stepped down as chairman of Arena and passed the mantle on to Steve Norris, Nestlé Professional’s sales director and an Arena supporter of over 20 years. The announcement was enthusiastically received by Arena members and guests and Steve confirmed that he is up for the challenge of taking Arena to the next level.
A charity raffle took place throughout the evening and attendees generously raised £1270 for Springboard and Hospitality Action.