Arena Round Table - April 2024

in partnership with TWC

20 May 2024

Participants

Tom Fender

Development Director, TWC

Tanya Peppin

Managing Director & Founder, TWC

Steve Norris

Sales Director, Nestle Professional UK & Ireland

Stephanie Brillouet

Marketing Director - Northern Europe & North America, Délifrance

Richard Hayhoe

Group Marketing Director, C&C Group

Richard Barr

Former Sales Director, Unilever Food Solutions

Philip de Ternant

Chairman, Creed Foodservice

Michael Anderson

Chief Commercial Officer, Sysco GB

Matthew Norman

Sales Director, Kerry Europe

Mark Aylwin

Chairman, Unitas Wholesale

Gail Bridgeman

Head of Commercial Campaigns and Activation, Bidfood

Emma King

Director for Dining and Wholesale, Britvic

Event Review

Before exploring the different challenges and opportunities surrounding data, Chair Mark Aylwin opened the discussion by firstly applauding UK supermarket chains for their data-led strategies over a 30-year period.

The multiples’ approach to data is entirely unique – born out of the ECR (Efficient Consumer Response) initiative in the early 1990s when new principles and ideas around supply chain management were introduced. Central to this initiative was collaboration with trading partners (suppliers) to provide better availability and range management to consumers.

Still today (or even more so, today) the retail multiples collect, analyse, and use data on an industrial scale to improve almost all areas of their operations, including to enhance customer experiences and drive business growth. Mark (who previously worked for Safeway highlighted how even 25 years ago, UK supermarkets built their whole ranging, consumer targeting, promotions, and pricing strategies around data, as well as highly sophisticated forecasting tools to make their supply chains incredibly efficient - becoming world leaders as a result.

Mark asked the attendees for their views and many were of the view that if we do not start to harness the data that we have got to really take this industry forward, we are going to get left behind – particularly when firms use AI to speed up their data analytics.

‘We have probably all been guilty of acting in haste to monetise our data – but in doing so, we have put some ropey propositions in the market.’

Panellists noted that the retail multiples are starting to move into foodservice so if the rest of the industry does not resolve its data challenges, the multiples will simply use their data knowledge to gain market share, which will lead to overall market consolidation.

Defining the foodservice market

Moving onto the foodservice channel, it was agreed that in terms of data, the sector does not have anywhere near the capability that the multiple retailers have. Foodservice was described by some as being “quite complex” and ‘fragmented’ and lacking in consistent ‘industry definitions.’  Participants agreed that they would like to see a level of consistency brought in, so data is then considered a more reliable source moving forward and the numbers for total market are consistent because everybody understands the definition of the market.  The majority agreed that the hardest starting point is our market and the blurring of lines between sectors (e.g. where does ‘convenience’ sit? What is a gastro pub?  If an outlet has a sommelier, is it a premium outlet?)

However, later in the discussion, it was highlighted that the mults had similar barriers to overcome when setting up their data solutions, and what they offer now still is not ‘perfect’ – but data is clearly still their engine driving growth. 

Wholesale is not ‘the first mover’ in data – the supermarkets did this 30 years ago – so wholesale / foodservice should be able to adopt data led strategies quickly as the mults have done a lot of the arduous work (thinking) already.

Opinion evolved during the round table debate. Towards the end, the mood had shifted from one of complexity towards data alignment through the industry to ‘it shouldn’t be that difficult’ especially as businesses operating in the wholesale sector are likely to continue to analyse standard industry data differently due to their own business complexities, product offering and market positioning. ‘There is always going to be a difference of opinion….’ so consensus is required on what the definition of ‘foodservice’ is so that total market numbers can be reported reliably. There was unanimous appeal for a solution to be found for accurate reflective market data reporting.

Model markets

Defining foodservice was the first step, the next suggestion was to look at any markets already implementing an effective data strategy. North America was put forward as possibly “leading the way” in the world of wholesale data. Its “robust” system of collecting data across the industry, according to one member, has made life easier with investment cases and interaction with global partners, ensuring that the right type of product gets to the ultimate customer. Going forward, participants admitted it would be helpful if they had a model that they could work towards to help them produce an effective data strategy that works for them.

While this round table debate focused on how UK wholesalers / foodservice operators can harness the power of data more successfully, most attendees agreed that UK wholesale/foodservice was ahead of their peers in other European countries.

One participant (a supplier) has recently moved to their foodservice role after many years working on supplier side in the retail multiples’ channel. This person gave an overview of data at their fingertips when working with supermarkets.

Through software provided by the supermarket chain, the supplier can identify:

Who has bought their product (hugely granular detail)
When (to precise time of day and day of week)
Where (to precise locations)
Demographics – including wealth, affluence of consumer, household composition etc.
Cross purchases (what gets bought with it)
Spend on SKU and total category.

Others then added:

Price elasticity
Effectiveness of promotions
Cost of NOT doing promotions (e.g. impact on GP reduction)
Effectiveness of new listings – supermarkets are far more disciplined for new listings whereas we must continuously complete ‘write off stock lists in wholesale.’

‘Supermarkets want our brands to be in their data eco system. In wholesale, we lose complete sight of our brands’ sales performance.’

‘Suppliers are handed the ability to get this level of data ‘on a plate’ from the mults.’  In turn, this means suppliers give more of their resources to the mults.

‘Where is the case for investment in our sector’ one asked?

But ironically, suppliers felt there are likely to be huge opportunities for growth in foodservice / wholesale – sharing this data will unlock suppliers’ investment funds.

And those wholesalers/foodservice operators who are sharing data, are they shouting about it? Certain contract caterers were noted as being very collaborative with suppliers with their data.

Industry risks and challenges

Everyone in the room agreed that as an industry, we need to “up our game” when it comes to data.

These were the risks identified from the round-table discussion:

Wholesale / foodservice ends up ‘at the bottom of the pile’ for supplier investment.
We do not attract or retain top talent – they want to work in more data led industries.
Suppliers prioritise the retail multiples when supply shortages occur (decisions based on data).
Some suppliers decide to introduce new ‘ways of working’ in wholesale (choiceful on who to supply, based on data)
‘We become lazy as a sector.’
Tesco (et al) move into foodservice.
Declining sales – ‘our lorries are already carrying fewer orders/less stock on deliveries to our customers and that’s before further ESG legislation comes into play.
More consolidation
Declining profitability
‘We become harder to deal with.’

Mark Aylwin, Chair, summarised delegates’ comments with this viewpoint: ‘We are stood on a burning platform.’

‘We need to up our game – there is too much industry inertia around data.’

Do we need a wholesale / foodservice vision for data?

One commented that the retail multiples had a very dysfunctional supply chain before initiatives like ECR were launched, which helped create a collective industry wide vision for becoming more data led.

Do we have a clear vision for what foodservice and hospitality want to achieve in terms of data? When this question was put to participants it soon became apparent that perhaps this is the one of the biggest challenges in our sector, that nobody has built that end vision, and this is what we are lacking.

One panellist also raised concerns over how data might impact innovation and creativity within foodservice if the industry were to become more data driven. It was agreed that human intervention (knowledge, expertise) should still be used, especially in foodservice/hospitality. (note: Tesco’s digital planogram software still allows people to add / remove SKUs based on their knowledge).

Opportunities ahead

Moving forward, it was suggested that we try to follow the ECR (Efficient Consumer Response) model to create a collaborative industry platform for data that will take our industry forward - looking at how it transported the way retailers behaved, the way it worked with suppliers and observing that culture of working together and putting consumers first.

Upskilling was also a talking point and highlighted as a potential opportunity for our industry. It was strongly advised by one participant that we invest in our salespeople, as well as the buyers - just as the supermarkets have done. Salespeople should be increasingly remunerated based on what they should be selling, identified by data analytics, rather than what they have historically sold.

The advancement of technology in data was also touched upon, along with the role of data within sustainability and how it can be used to drive efficiency in vehicles and improve forecasts.

Data should play a leading role in waste reduction – a key area for our industry.

It was also pointed out that wholesalers need to help their customers (foodservice outlets) grow their sales via better usage of data so that the channel has a virtuous growth circle. One participant highlighted that some of their customers had got quite data savvy in recent years (analysing their own till data) and that the wholesaler was having to ‘play catch up’ to keep pace with its own customers.

Summary

Despite the challenges facing foodservice, there is still an appetite out there to utilise data for growth, change and success. Having said that, at times during the discussion there was a feeling of industry inertia - a question of, ‘can we actually fix this?’. But most participants were optimistic that if we work together as a sector, we can improve our operations, enhance customer experiences, and drive business growth through the use of data. The consensus was if multiple retailers can achieve it, then so can foodservice. Although, it is not a one size fits all approach, as one panellist pointed out. Retail and foodservice are two very different industries and although we can learn a lot from how multiple retailers utilise data, we must keep in mind the different sectors.

Overall, every participant around the table expressed enthusiasm and a desire to do better at data, individually and collectively. Delegates agreed that data must have representation and methodology all the way through the process, along with quality, integrity and above all, vision. The next step now is how we enable people to achieve their visions. We may not have all the answers right now but rest assured, we are getting one step closer every time.  Encouragingly there was a unanimous desire to maintain involvement in such an important conversation and contribute to seeking a solution.

If you’re interested in hosting or participating in a future round table event, please contact Lorraine.

Event Sponsor

TWC is a data and digital consultancy – we harness data to empower the wholesale, foodservice and convenience channels. With a vision for these channels to be truly data led, we are passionate about helping our clients thrive and we provide a unique blend of data services, digital platforms and unrivalled knowledge, designed to drive growth for operators and their suppliers. Everything we do is underpinned by our values of transparency, loyalty, ambition and customer-centricity.