| Risks |
Business risks are little changed. However, one risk area has come into greater focus – political change. This is an election year. After 11 years in opposition, the Labour Party is about to launch a strong challenge. Should there be a change of government there is a risk that new policy initiatives will affect the national mood and perhaps put a brake on growth. Caution rather than confidence might then set in; for business as well as the consumer.
This could affect foodservice demand in some categories. The only mitigation strategy in the face of this type of risk is to provide a comprehensive range of products that responds to all needs and tastes. |
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| Sensitivity analysis |
In common with all foodservice businesses, the economic variable to which we are most exposed is the consumer’s level of disposable income. A family’s propensity to spend on items other than basic foods has a major influence on our volumes, the development of our ranges and the growth of our businesses in general.
Australia’s level of unemployment is at a record low (4,0%). In effect, this is a full-employment economy. Wages are therefore high and the current level of inflation and interest rates puts little pressure on disposable income. This may be an area of sensitivity, but the analysis is favourable and will remain so for the foreseeable future. |
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| Proudly Bidvest |
The strength of the Bidvest connection was demonstrated by the Angliss acquisition. Access to group resources puts us in a position to pursue strategic opportunities. We not only mount expansion strategies, but sustain them in the long term. The backing of Bidvest resources is obviously crucial to us.
Our business units all carry the Bidvest name and livery. |
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| Differentiation |
| We are the only truly national player in a highly fragmented industry. Our localised competitors lack our resources and infrastructure. We can secure national accounts and assure our customers of uniformly high standards of service across Australia. Ongoing investment in infrastructure reinforces this unique positioning. |
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| Innovation |
Our continuing investment in IT systems keeps us at the forefront of electronic marketing and customer service. The incidence of electronic sales mounts by the month and now approaches 30,0% of all transactional volume.
Thanks to our investment in systems, our teams have become proactive interpreters of sales patterns from specific customers and regions. By making use of a constantly refreshed database, we up-sell, cross-sell and anticipate customer needs on a scale without precedent in our sector.
Our quality management system and HACCP and ISO compliance programmes lead the industry. |
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| Social commitments |
| We have been nominated for a Prime Minister’s Award for our job creation efforts on behalf of people with disability. Unlike South Africa, our labour legislation does not set employment equity targets for people with disability. However, we have made it a policy to do what we can to offer productive work to disabled people whenever possible. Several of our businesses have employed people who are considered intellectually challenged or have various levels of physical disability. Results are so positive we are encouraging other employers to follow our example. Nomination for a Prime Minister’s Award means our efforts have been noted at national level. |
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| Training |
| Training investment continues within our business. We differentiate ourselves not only in terms of our comprehensive range and geographic reach, but the quality of our service. Increasing emphasis is therefore being given to sales training and customer service. |
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| Challenges |
In a full-employment economy, individual productivity is the key challenge. We have to equip our people with the tools and skills to perform to the optimum. We also have to create working environments that foster superior output. We can grow our systems and infrastructure, but we can’t grow the payroll to the same extent when job applicants are in short supply.
A further challenge is to deliver growth on top of growth in the face of manpower constraints. Our management teams have proved themselves capable of meeting this challenge and we are confident further significant gains can be made. |
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| The future |
We will pursue double-digit gains in both revenue and trading profit. We are investing in more and better trained sales people. Smart systems have to be complemented by smart people who are capable of managing the face-to-face interaction with a growing customer-base.
Better understanding of customer needs is fostered by infrastructure development. In the past, many QSR customers were serviced through general foodservice distribution centres. Continual expansion of QSR warehousing enables this category of customer to receive dedicated service from QSR teams, pushing up customer satisfaction levels.
We estimate that we currently hold 20% of the national foodservice market. Substantial growth is possible through range extension, expansion of the customer-base and geographic expansion. Further acquisition opportunities will be explored. Simultaneously, we will investigate growth possibilities in niche activities in new markets, such as the office amenities and refreshment market. |
