In late April, among the chiffon draperies of the Lowry Hotel, Manchester, TM met with food and drink manufacturers from across the UK. Jane Gray discovered that the industry has experienced a marked improvement over the last 18 months despite the development of new and complicated market challenges.
The event was one in a series of The Manufacturer Director’s Forum Dinners designed to reveal trends and perspectives from individual manufacturing sectors. From the magazine’s perspective, the dinners help us to stay abreast of sector concerns and successes in the hope that we will thereby remain relevant to developing industry needs and enhance the value of what we have to offer. Our sponsors for these dinners are hoping for the same, and in this instance TM extends its thanks to Microsoft for their support.
Over three courses of fine cuisine (and more than three courses worth of fine wine) the assembled guests mulled over the events of the last year and considered the path forwards for food and drink manufacturing in the UK.
Largely speaking, guests seemed to feel that the last nine months had been significantly more comfortable than the previous nine. Paul Wildman, supply chain director, spoke for AB World Food’s experience: “Eighteen months ago we were suffering badly from exchange rate and commodity price volatility, and were in a place where it was difficult to predict what our costs and demand were going to be just one or two months out. That has damped down enormously now and it is easier to run, manage and plan the business.” Andrew Shaw, supply chain and R&D director at Seven Seas, agreed, but identified increasing exports as the company’s strategic imperative. “Our export business is absolutely flying, and will take over our UK business. We just have to approach the question now: how will we trade abroad versus how we trade in the UK? The growth market just isn’t there in the UK due to own labels. In Britain we are in a situation where our biggest customers are our biggest competitors. Boots’ own label has a lot of creditability.” The vagaries of supermarket offers and selling strategies provoked particularly strong feelings across the board. Dave Holding, manufacturing projects manager, Hitchen Foods spoke out: “Retailer promotional activity is one of our major challenges. In particular, promoting products at one pound per pack seems to excite the consumer into a buying frenzy, resulting in promotional volume reaching heights we’ve never seen before. This is putting a lot of pressure on us. We’ve had to challenge everything to make it cheaper. We’ve really put lean tools into practice, building them into the mentality and culture of our employee’s within the business. Obviously it’s difficult but when you have higher levels of sales to do at promotional prices. We’ve had to look at everything: waste in manufacturing, procurement, materials, energy utilisation, supply chain and processes in order to save cost & improve. These areas all have sustainable continuous improvement plans attached now. It has meant a significant change but has added significant value to the business.” In response to questioning from Matt Eckersall, manufacturing customer specialist at Microsoft, on the ability of manufacturers to negotiate with major clients and provide them with the insight into operations and supply chain dynamics that might create greater alignment between production and retail, Holding continued: “Some retailers are good at communicating about promotions and give out the notice you need to plan your labour and schedule your factory around it. Some customers will phone up and say ‘we want this on promo tomorrow’. The real challenge this poses for a factory is to do with capacity and having the ability to deal with having a product on promotion for three weeks a year, but then what do you do when it’s not? Retailers want promotions and they want you to have capacity and contingency plans, but it’s very difficult to talk to them and say that everyday low cost is effected when we’ve got a piece of kit which is stood idle for weeks and weeks a year waiting for a spike demand.” Representing Columbus IT, Simon Charlton raised a question about traceability and the impact of farm to fork campaigns that spurred conversation around growing consumer consciousness on sourcing and how to analyse the impact of switching to more local supply. Rachel Hanna, factory manager at Hollands Pies, said that they have been doing a lot of research into the overall implications of choosing to buy British meat, weighing-up brand integrity with their loyal customer base and benefits in terms supply chain efficiency against immediate cost impacts. From here the discussion morphed into an exploration of new quality feedback methodologies. The new role that social media is now playing in tracking customer satisfaction and testing markets is surprising, and for manufacturers like Hollands, with their own Facebook and twitter communities, extremely edifying.
The importance of such technologies and social phenomena was not underestimated by the assembled as the imperative of engaging with customers in an ever more competitive market place escalates. As key debate proved, this is something which food manufacturers are particularly sensitive to, regardless of their size. From small family-owned enterprises like Hawkshead Relish, to internationally active manufacturers of favourite households brands like Sharwoods ethnic cuisine (part of AB World Foods), there is a fierce pride in the brand name and a strong belief in key differentiating factors such as authenticity of recipe, ethos of the product and diversity of product range. Being big is not seen as an excuse for ceasing to care about the integrity of the product or failing to be excited by it.
Hopping between issues of environment, waste management, skills and more the conversation unreeled as the Manchester skyline faded into darkness and was far more diverse than can be related here. TM would like to take this opportunity to thank the industry representatives who attended for taking the time to share with Microsoft and ourselves what is driving and obstructing your businesses. Such insight is invaluable for us and we hope you also gained value from sharing experiences with your peers.
If you would like to find out when we are holding a forum dinner for your sector please contact Laura Williams – [email protected]
If you would like to sponsor a forum dinner please contact Henry Anson – [email protected]