Operational reviews – Bidvest Fresh

Bidvest Foodservice Europe

Stephen Oswald: Managing director

Bidvest Fresh is the leading specialty provider of fish, meat and produce in the UK. The business operates through 11 sites across the UK supplying products from local markets, as well as imported items. The businesses supplies discerning chefs that appreciate quality fresh products.		Stephen Oswald – Managing director

Highlights

	Net sales increased 31,1%, normalised PY 21,1% (8,7% organic)
	Operating profit up over 49%, normalised PY 30,3% (9,6% organic)
	Fish business drove most the organic growth
	Grew customer base, increased average spend and increased average drop value
	Acquired meat business as first step in the expansion into this market.

Innovation and new investment

	Campbell Brothers acquired December 2013 to expand product range into meat and extend produce and seafood further into Scotland
	“Buy direct” campaign continuing with 31% of all products now sourced directly from origin
	Re-emphasising that the business is small, local and specialist
	Bidvest Fresh sales model launched to increase outbound customer sales with e-commerce solution being implemented to soak up more of the inbound “order taking” sales.

Disappointments and challenges

	Fine food business folded into produce business
	Buy direct campaign has been a steep learning curve and is now starting to bear fruit
	Build work required at Campbells.

Changes in operational environment

	Increasing demand for sustainability credentials – met by our proactive sustainability team
	Increasing demand for locally sourced produce. We are strengthening our direct links with these supplier groups
	Increasing demand for direct delivered fresh products.

2015 targets, objectives and factors affecting future results

	Expand sales in low-penetration regions
	Roll out e-commerce platform.

Risks and responses

	Low-margin customers with national set menus continue to be an issue – addressed by closer work on menu development and taking a proactive role to influence core menu lines
	Core product prices not stable – continuing to develop contracts to establish a solid base price
	Growing number of NGOs, personalities and governments providing sustainability credentials and/or opinions that contradict one another in scope and definition. Many require differing “chain of custody” procedures. Failure to meet a standard can have an adverse effect on segments of our customer base.

Material issues and performance

MATERIAL ISSUE		WHY IT IS IMPORTANT AND STRATEGIC OBJECTIVES	KPIs AND TARGETS	PERFORMANCE AGAINST TARGETS AND ACTIONS GOING FORWARD
Performance Maintain consistent financial performance		Why: Global economic challenges Lower consumer confidence Objective: To maintain profitability	General cost containment Maintain margin Product cost containment	General costs as a percentage of net sales 25,9% (prior year 25,9%) Margin has improved at 33,4% (prior year 32,85%) Product cost managed by buying direct, 31% of all stock is purchased directly from source compared to 25,8% last year
People Exceed corporate citizenship expectations		Why: It is important to demonstrate our commitment as a good corporate citizen by consistently exceeding local and international governance, compliance and broader sustainability expectations	KPIs: Local community investment NGO support Certifications	Increasing spend on local community investment in schools and clubs and chef sponsorship Certifications currently held, Organic, Red Tractor, Freedom Foods, MSC chain of custody, and BRC 6 Injury rate 40 against prior year 53
Maintain rigorous safety standards		Why: It is our obligation to ensure the safety of our employees Objective: Ensure all businesses demonstrate exceptional levels of safety performance	KPIs: Injury rate Lost-day rate	Resignation rate 24,5% against prior year of 12,4%. The business has had to address a number of issues this year
Promote employee health and satisfaction Enhance talent attraction and retention		Why: People have a right to be healthy and happy. As employers we assist our staff in this regard, which contributes to a more productive and positive work experience To improve talent attraction and retention Objective: To use innovative approaches to improving the health and wellbeing of all employees and create a positive work environment that enhances talent attraction and retention	KPIs: Resignation rates Absentee rates	£391 000 spent on staff welfare against £265 000 prior year
Product Minimise product impact and ensure food safety		Why: Foods have a high environmental and health impact. It is important to ensure food products are responsibly and safely sourced, manufactured and distributed Ensuring product supply integrity (eg horse meat scandal)	KPIs: Failed food safety tests Failed DNA tests	0 (prior year 0) failed tests 0 (prior year 0) product withdrawals No failed DNA tests
Product Reduce environmental impacts		Why Environmental issues, such as climate change, pollution and water scarcity These issues also potentially threaten food supplies Objective: To reduce our impact, educate employees, and work with suppliers and offer solutions to customer to help them reduce their impacts	KPIs: Reduce water usage Reduce fuel consumption Reduce electricity consumption	£231 000 spent on water against £187 000 prior year, we have opened an additional depot Cost of fuel per vehicle decreased by £1 800 from prior year to £10 200 £695 000 spent on electricity and gas against £563 000 prior year, there has been an increase in cost per kWh of 11,1% to prior year and we also opened an additional depot
		2012 2013 2014 Water usage (Mℓ) 57,2 67,6 99,0 Diesel usage (Mℓ) 1,2 1,6 2,2 Paper usage (kg) 38 400 41 200 55 055

Stakeholder engagement

STAKEHOLDERS		OBJECTIVE AND ENGAGEMENT METHOD (AND FREQUENCY)	KEY ISSUES IDENTIFIED	KEY ACTIONS TAKEN AND PLANNED (more detail may be provided in material issues tables and elsewhere)
People Employees (full-time and contract)		Objective: Improve employee relationship and satisfaction Methods: Employee engagement Employee “meet the CEO” meeting. Social media tool Newsletters Objective: Maintain good relations Understand issues and resolve these together Objective: Understand evolving needs, expectations and issues	Key issues: Remuneration and benefits, being informed about corporate strategy, employee skills development, employee wellness, local economic development and specific employer/employee relationship issues Issues considered material: Employee wellness, skills development and retention	Implemented global pension fund in line with government requirements Conducted “meet the CEO” meetings with all sales staff – extending to all staff in the new year Implemented Yammer as social media communication tool Regional work groups being implemented that connect the internal value chain component to ensure improved customer service Regular local newsletters
Suppliers			Key issues: Promote payment Sustainable sourcing	Greater than 98% off payments made within terms Increasing dialogue to manage sustainable sourcing options
Customers			Key issues: Increase emphasis on sustainability – reduce embarrassment potential Reduce cost while improving service and quality	Increased internal efforts to drive sustainable purchasing Increased internal efforts to drive local sourcing Driving efficiency gains
Communities: Local communities Particularly community subsectors (eg sports, education, infrastructure)		Objective: Better understand and collaborate with the communities in which we operate	Local economic development and employment opportunities, education (schools), skills development, health and environment Material issues: Socio-economic development and community involvement	Engage with local communities Staring an apprenticeship scheme to increase employment opportunities in local communities
Product Environmental stakeholders eg environmental NGOs, government agencies, communities and research/academic organisations		Objective: Understand issues, needs and expectations	Key issues : Promotion of sustainability issues Promotion of responsible sourcing	Direct engagement with: Marine Stewardship Council, Marine Conservation society, WWF, Sustainable Restaurant Association, Freedom Foods (RSPCA), Seafish Authority, ASC, GAA, Sustainable Fish City, Sustainable Seafood Coalition and Project Inshore