BIDFOOD INGREDIENTS

The business achieved a major turnaround and Crown Foods (suppliers to the meat and food industries) had a very good year.

Industry factors

Food inflation reached extraordinary levels. Some prices more than doubled. International raw material shortages were a major problem and were experienced across both the Crown and bakery ingredient businesses.

The economic environment encouraged consumers to eat at home more. The net effect of this trend is beneficial as our core business is supply to butchers, meat processors, bakers and food manufacturers that feed stay-at-home families.

Operational factors

In all operations, priority was given to solutions to help our retail and manufacturing customers respond to the needs of cash-strapped consumers. Solution-finding and trend-spotting are sources of competitive advantage. There was increased focus on the supply of ingredients for the processed meat market and new solutions for the poultry industry.

Operations were assisted by the full-year effect of the 2007 restructure whereby Bidbake was split into two (one unit dedicated to the manufacture and distribution of yeast, the other to bakery ingredient supplies) while Bidfood Technologies was given independent status as the manufacturing and innovations arm of the division.

All teams have taken a back-to-basics approach, focusing on efficiencies while improving controls.

Quality is a focus area. The First for Service quality programme gives us a proven framework. The programme is being re-applied with renewed vigour.

Innovations/investments

Continued investment made in automation systems at our factories, though the primary emphasis was on deriving maximum benefit from the investments made over recent years in our modern Cape Town and Johannesburg facilities.

Bidfood Technologies continues to seek opportunities by developing new products and increasing the base of overseas principals.

An “Innovator of the Year Award” has been launched. Every staff member is eligible. All ideas are considered, whether or not they involve the individual’s department. Response has been extremely positive. Suggestions across departmental boundaries are giving us fresh insights and show how seriously staff take the challenge of thinking “out of the box”.

Risks

The recent scale of food inflation and the suddenness of raw material shortages are reminders that good industry relationships and a wide range of supply options are essential.

Anticipation of raw material shortages and changes in demand has become critical to risk mitigation. Market intelligence at Bidfood Ingredients is often assisted by our strong relationships with international partners.

Skills shortages are acute, especially in specialised areas like food technology. We continually seek to attract and retain top talent to ensure the sustainability and growth of our business.

Sustainability factors

Steady BEE progress is being made. We have drafted and implemented new employment equity plans across each of our major divisions. Local teams have been made responsible for their own BEE targets while new steps are being taken to track progress. These initiatives were delayed by our restructure. They will now be pursued energetically.

Cultural factors

The business is known for pragmatism. Decentralised teams are empowered to do what works best for them within the framework of Bidvest policy. Open-door management is favoured.

The future

Management of working capital will receive constant attention. Stock holdings will be continually reviewed to ensure appropriate levels in strategic areas while slow-moving inventory will be curtailed.

The accent will be on affordable solutions and low-cost alternatives for our customers.