business opening small

The following list is not exhaustive but reflects issues that come up again and again. Many appear obvious, but are often not followed by small suppliers. In no particular order: Do ...background research, know who your customer is and where your product fits ...visit stores, talk to store managers and check sales ...look at retailer web-sites Don’t ...try and get in the back door (if a buyer rejects your product, don’t think the local sourcing manager will accept it) ...rely on verbal communication alone, follow up with e-mail ...try and grow too big too quickly rural action ...speak to existing suppliers - could one become your mentor? ...be prepared to negotiate ...be available for phone calls from buyer ...communicate with buyer, but don’t pester them - establish a good working relationship ...change anything without first agreeing it with the customer ...just highlight problems, also recommend solutions ...cut corners (with anything) ...be aware buyers have careers too and will move on ...own your own products - drive them yourself, be proactive ...support the product once listed ...call if there are issues/problems; don’t let the retailer find out themselves ...deliver what you have agreed - no short deliveries! ...carefully weigh up the pros and cons of supplying just one retailer S O U RC I N G ISBN 1 904231 44 6 OPENING THE DOOR FOR SMALL BUSINESS IGD Grange Lane, Letchmore Heath, Watford, WD25 8GD www.igd.com Business in the Community 137 Shepherdess Walk, London, N1 7RQ www.bitc.org.uk A Guide to working with Retailers and Foodservice Companies rural action Foreword Local Sourcing has increasingly featured in the language and activity of the food sector over the past few years. More companies are recognising that it is good business to source local produce in response to the growing demand from consumers and the new opportunities in public procurement. Introduction It is two years since IGD and Business in the Community published the ‘Guide to Local Sourcing: Growing Rural Business’, in which time the profile of local food has continued to increase. IGD consumer research has shown there is real consumer demand for local SPAR is a large and significant supporter of local sourcing. SPAR was formed in 1956 to provide trading and marketing services through Independent Wholesalers to small Independent Retailers to help them compete in the competitive marketplace. Our six Regional Wholesalers supply 2,700 SPAR food stores across the United Kingdom operating at the heart of rural, urban and city centre communities. The needs of customers, particularly in rural areas, have driven our involvement in sourcing from local producers. We understand the particular difficulties such producers face and SPAR is very pleased to support this Guide which aims to make it easier for farmers and local producers to do business with food sector companies. For a farmer or small producer, the whole process of developing new markets with larger companies can appear to be a big leap into new and difficult territory. That said, many more local suppliers have now learnt how to develop excellent trading relationships with larger food sector companies and, following a series of regional workshop events, their experience has informed the content of this Guide for which we are very grateful. The Guide has distilled their positive experience into straightforward steps which other local producers might take. The market for local sourcing continues to grow which makes this Guide particularly timely. We want to encourage and help all farmers and local suppliers with good products to find their place in this market and prosper as a result. food, particularly for making locally produced food available in outlets consumers regularly use. Developing channels for the supply of locally produced food was also identified by the ‘Curry’ report as one of the greatest opportunities for farmers to add value to their products. There are many opportunities for small food businesses to reach the end consumer. For those approaching the food industry for the first time it is understandable that some may find it daunting. This guide aims to make the path clearer by taking potential suppliers through the stages likely to be encountered. The information provided comes from discussions with many of the major supermarkets, convenience chains, foodservice distributors and operators in the UK, in addition to presentations given by local food businesses and their customers at the IGD/Business in the Community ‘local sourcing’ workshops held in early 2003. This guide has endeavoured to capture the most common elements in working with larger customers and some of the differences in dealing with a variety of retailers and foodservice companies. Nevertheless, the combined experience of all those contributing to this guide means it is an essential read for small businesses looking to work with larger customers. We are extremely grateful to the Farmers Fund and Defra for sponsoring the research, production and distribution of this Guide. I am proud IGD has again been able to work with BiTC and I look forward to hearing about the successes I am sure this guide will help bring. Morton Middleditch Chairman, SPAR (U.K.) Member of Business in the Community’s Rural Action Board Joanne Denney-Finch OBE Chief Executive, IGD How to use this Guide The process of getting your product onto the retail shelf may appear complex and daunting. In reality however this process breaks down easily into more manageable chunks. Whether you want to supply one store or one hundred, this route map will help you understand the listing process, specific departments you may work with, and some differences between supermarkets and convenience chains. The guide has been designed so that the reader can go straight to an area of interest or read through the sections in order. There are many more similarities than differences in getting a product listed in a convenience chain compared with a supermarket chain. Many key considerations have already been highlighted. However, there are some key differences a potential supplier should be aware of. RETAIL Before first contact The benefits of preparation First contact Who to contact and what to expect First meeting What will be discussed PROCESS RETAIL 8 9 10 11 11 12 13 MARKET SECTOR Differences in supplying convenience chains & supermarkets 19 Auditing What needs to be checked Negotiation Striking the deal Product listing The trial period Orders and distribution Different methods and key tips On-going support Helping support your product ‘Foodservice’ is used throughout this section to refer to the sector of the food industry which provides meals for consumption outside of the home. Other terms used for the same sector include ‘away from home’, ‘out of home’ and ‘catering’. Market overview Supplying the foodservice market FOODSERVICE 20 21 22 23 24 24 25 14 National chains Independent operators Key factors in supplying foodservice Differences in supplying foodservice and retailers Public sector procurement As you move along the listing process you’re likely to deal with people from several different departments. All have specific roles in the smooth running of business relationships. Where possible you should always keep your main local sourcing or buying contact informed of who you’ve spoken to and what was agreed. Buying (commercial) Technical / Quality assurance DEPARTMENTS 15 16 16 Legal Supply chain Finance Merchandising Marketing Corporate affairs/PR Knowing who to contact and deciphering the language used within the industry can be an onerous task. This section provides invaluable information to simplify the process RETAIL REFERENCES 17 17 18 18 18 Who’s who What’s what Useful contacts Disclaimer This guide provides generic advice on what may be expected in listing food and drink products with retailers or foodservice companies. It is not intended to be a definitive or comprehensive guide to apply in every situation – suppliers should note that individual retailers and foodservice companies may have specific requirements not included here. 26 27 30 Before first contact You are well advised to have undertaken some preliminary research and gathered some basic data before contacting a retailer. This is outlined below. First contact There is no universally agreed way of making first contact, generally speaking however the best place to start is the head office, rather than an individual store. New vs existing products and suppliers A track record of supplying your product(s) to other retailers always helps. This answers two important questions in a retailer’s mind straight away: You are already used to dealing with large customers Your forecast sales will be based on real sales figures and experience with the product If you and your product are new to doing business with large retailers these questions remain. It is therefore especially important that you undertake sufficient preparation along the following lines: Who to contact? You will probably go through the company switchboard, so ask if there is someone responsible for sourcing local/regional products; if not, it will be the relevant buyer for the product category. What to say? You may be put through to someone directly or asked to send information by post. On the phone be brief and to the point. Say who you are, the company you’re calling from, what you’re sending, when the contact will receive it, and what they should lookout for. By post, send a short covering letter and marketing material to the contact. Tempt the contact into reading the marketing material by stating clearly why the retailer should stock your product – be clear how it is different and better to what they currently offer. Store visits At the very least you should have visited some of the retailer’s stores and know: Whether this is the right customer for your product Where your product could fit within the existing range How your product is different/better than other products within the range Who your competitors are The response The retailer is likely to respond with one of three broad answers: Not interested There could be many reasons why. Always seek the fullest explanation as this will help you improve your offer and stand a better chance with this or another retailer in the future. Possibly interested in stocking the product but requiring you to deal directly with another party, often an existing supplier. This is most likely for fresh foods (e.g. fruit and vegetables, fresh meat etc) where retailers have existing close relationships with a few large packers/processors. However, depending on your size the retailer may prefer you to go through an existing supplier whatever your product. If this happens ask the retailer for the relevant contact. The retailer is willing to learn more about you and your product. At this stage you may be: Asked to send clarification on certain points Sent a questionnaire to fill in – typically covering: company history, product description etc. Invited to meet with the contact Market research It will serve you well to visit the reference section of your county library where you can often find up-to-date market research reports for your product category. Also your regional food group and local Business Links will help identify valuable market data for your product category. Demonstrating this knowledge will show the retailer you are serious about your product. Possibly interested RETAIL PROCESS RETAIL PROCESS Marketing material Often you will need to send an introductory letter and marketing information about your product to the retailer. Think carefully about what to say, it will create a lasting impression. In addition to information gleaned from store visits, relevant information will include: Company history and current size Production processes/ quality assurance systems in place Your product lines Who you currently sell to Consider investing in some high resolution photographs of your product/packaging and include them in the marketing material. Interested in direct supply 1 ‘Meet the buyer’ events are often organised by regional food groups (see useful contacts) or retailers themselves. Attending these can short cut the process and put you face-to-face with a buyer, however check before hand that the relevant buyer for your product will be there. Also, be aware that this is a filter process and not every supplier will be successful. Exhibiting at food shows is another way of meeting buyers. They may want to have a meeting there and then, so be prepared with the necessary information. Many retailers have staff with specific responsibility for dealing with local food producers. In some cases this role is simply to act as filter between suppliers and buyers to identify ‘runners’ from ‘nonrunners’; in other cases a local sourcing team may manage the entire process of listing local products. These people have a good understanding of small suppliers and often can offer specific assistance and advice. Ask if the retailer has such a person or team. As a small, local food supplier you may be asked to deal: i) wholly through an existing supplier, not directly with the retailer; ii) direct with the retailer; iii) a combination of the two (e.g. agreeing terms with the retailer but orders and distribution through an existing supplier). 2 3 1 Retailers are always on the lookout for new, unique products. Work hard to communicate the Unique Selling Proposition (USP) of your product. In most cases, the fact that a product is produced in a local area or region is not enough. Buyers typically look for a combination of attributes, for example: taste, freshness (time to market), variety, seasonality, production method (e.g. handmade; matured for longer etc), product format, size of producer, origin. Good local brand recognition will also help. 4 8 TIPS FOR LOCAL FOOD PRODUCERS TIPS FOR LOCAL FOOD PRODUCERS 9 First meeting You may meet the local sourcing specialist or category buyer. Who you meet will determine where you meet: regional office or head office. Auditing Even if there has been a positive response to your product, the retailer will still need to check that you will be a suitable supplier. They will have specific standards across a number of key areas that your company, premises and product must meet for the listing process to continue. Examples of questions that will require answers include: Technical (see also page 16) Does your premises meet the required hygiene standards? What ingredients are used in your product? Are they acceptable? Finance (see also page 17) Is your company credit worthy? Marketing (see also page 18) Is the product packaging appropriate? Does it need changing? If so, how? Legal (see also page 16) Does the product/pack/label meet all legal requirements? To answer these questions you are likely to be in contact with a number of other departments. Generally speaking, the retailer will need more information and be more prescriptive if the product is to be sold as a retailer’s own-label. Whilst most local/regional products are sold under the supplier’s own brand, be prepared for this process to take several weeks, and expect to provide a lot of detailed information on all aspects of your product and business. What is expected? The retailer will expect to leave this meeting with a clear understanding of the opportunity for your product. To facilitate this, when you are organising the meeting date ask the retailer: What information they want to take from the meeting. Make sure you have the relevant information at hand and take multiple copies of literature How they want the meeting to run (e.g. do they want you to give a formal presentation) Whether they want to see physical samples at this stage or some packaging (see ‘tip’ below) What will be discussed? The marketing material you provided will give a head start. Examples of what may be discussed are given below: Product proposition Product type (e.g. soft cheese, speciality sausage) Product’s ‘Unique Selling Proposition’ (USP) Pack sizes and format Where it would fit within a retailer’s existing category (e.g. pre-packed or through deli counter)? RETAIL PROCESS RETAIL PROCESS Which stores in the chain might sell it (where do you think the customer demand will be)? Product history / expected performance Where it is currently sold (are you still able to meet this retailer’s volume requirements)? Any sales figures or retail selling price Any market information you’ve found in research reports may come in useful, particularly if there is no sales history for the product Company size and capability How much you can make (e.g. enough for 1 or 2 stores or all stores nationwide)? How much you would expect to sell (volume per week)? Do you adhere to specific technical standards (e.g. BRC certification)? Are you able to print bar-codes? Presenting a summary of your business and marketing plan at this early stage would demonstrate you have done your homework, but be aware of the limited time available at the meeting. Business Links or your bank should be able to help with this. Do not over promise. For instance, be realistic in the volumes you can produce. The retailer will not thank you if you can’t deliver what was ordered. Negotiation In negotiating the deal it is possible that further meetings will be required with the buyer and other departments. Examples of areas where agreement will be needed include: Cost price Volumes / sales forecasts / no. of stores / case sizes / lead times / trial periods Ordering and distribution method (e.g. direct to store vs regional distribution centre) Invoicing method (e.g. Electronic data interchange (EDI)) Level of marketing support required Methods of dealing with short orders, quality problems, customer complaints Payment terms and conditions 1 The stage at which a retailer wants to see and taste your samples will vary. Never send samples without the prior knowledge of your contact. Make sure your product (including packaging) is in premium condition and delivered as it would appear ‘on shelf’ (if frozen it must be frozen; if chilled it must be chilled to the right temperature etc). If the product needs heating/cooking check several days beforehand that the necessary facilities are available - your contact may need to book a session in the test kitchen. 1 2 Bear in mind, if the retailer requires you to work partly or wholly through an existing supplier this will affect many of the areas above. For example, if you are asked to work wholly through an existing supplier then the negotiation is likely to take place directly with them, not the retailer. 10 TIPS FOR LOCAL FOOD PRODUCERS TIPS FOR LOCAL FOOD PRODUCERS 11 Product listing A product is listed when a retailer’s buyers are able to purchase and sell the product. The various phases up to this point will typically takes several months. It is unlikely you will receive a written contract from the retailer however you will be expected to agree to their terms and conditions of trading and have completed the necessary new supplier forms (ranging from detailed product specification to bank details for invoicing). Orders and distribution Orders After being listed a product may not be ordered for several weeks, even months. This is most likely if the retailer intends to launch it within a new range, or at a particular time of year (e.g. Christmas). How often a product is ordered will depend on its shelf-life. For example, fresh foods may be ordered daily, with longer life foods being ordered weekly. Retailers operate a ‘just-in-time’ system (see below) which means you hold onto the product until just before they need it. The ordering process may be by fax or through EDI, (see What’s what) this will be agreed during negotiation. If orders are placed by telephone, always ask for confirmation in writing. Be clear what the retailer’s ordering process is: will orders come from individual stores or head office? Trial period The retailer will probably initially list your product for a trial period (say 12 weeks) to check the pricing and merchandising strategies, see if it meets the sales forecasts and of course test your ability to deliver what’s required at the right time and place. During or after this period the retailer may want to change something in your agreement. If, for example, the volume forecasts were too optimistic the retailer may want to re-negotiate terms. Reasons for de-listing In order to find space on the shelves for your product the retailer may have had to de-list another supplier. Remember that this may happen to you. Reasons for de-listing vary but are likely to include: Failure to deliver the quantities and quality agreed Lower than expected sales / high wastage Physical product changes (to ingredients/composition) Poor quality packaging 1 Be aware that retailers plan many months in advance for particular times of year. It is pointless approaching a retailer in November in the hope of selling your Christmas puddings that year. The retailer will have finalised its festive ranges months before. TIPS FOR LOCAL FOOD PRODUCERS Distribution No matter how good your product is, if it does not reach the shelf, all other efforts are wasted. This is where efficient distribution and logistics come in. Retailers have worked hard in the past few years to reduce supply chain costs and have introduced: ‘Just in Time’ distribution – reducing excess stock levels (storage space costs money) Increased use of automated distribution – requiring outer case barcodes (TUCs), tighter specifications on pallet sizes and outer packaging and minimum delivery volumes Backhauling – utilising retailers’ distribution fleets more effectively A distribution method will be agreed during negotiations. Think about how the chosen approach may affect the cost price. For example if the retailer collects the product from your premises (backhauls) they will expect their additional costs to be reflected in the unit price of your product. Some buyers, in an effort to understand and reduce costs, like to work on a system of open book costing where they need to see your management accounts. RETAIL PROCESS RETAIL PROCESS Wrong or no barcodes (see the What’s what for information on barcoding) What if things go wrong? Despite the best laid plans, sometimes things can go wrong. If this happens, don’t panic, but make sure the relevant contact at the supermarket knows immediately. You must give an honest and accurate account of what happened and your best estimate of when and how the problem will be resolved. This means making sure you know exactly how the retailer’s supply chain – the route products take to reach supermarket shelves – works. There may also be times when the retailer needs to contact your company in an emergency. You must therefore have a nominated person who is always available to deal with any issues and has the necessary authority to make quick decisions. 1 If you are delivering to store, consolidation centre, RDC, or to an existing supplier (hub) you are likely to be given a delivery slot. If so, be on time! If you’re late you may miss the slot, which may result in stock being rejected / you being charged for loss of sales. Be aware that your delivery address may have restrictions on size of vehicle, types of pallets allowed and so on. There may also be a minimum delivery volume required. Always check well before hand what is accepted/expected. Always make sure the necessary paper work is filled in and signatures obtained. Without the required evidence of delivery your payment will, at best, be delayed. 2 1 During the launch and roll-out of your product don’t be too ambitious. It is better to first become established in a few stores and gain a good track record (high sales/low waste), than over stretch and get poor results. 3 12 TIPS FOR LOCAL FOOD PRODUCERS TIPS FOR LOCAL FOOD PRODUCERS 13 On-going support Getting your product listed and on the shelf is the beginning of the relationship with the retailer, not the end. Buying (commercial) The buyer is responsible for product purchasing across a range or category. They are responsible for negotiating the commercial deal. The buyer will be responsible for meeting margin targets across their range of products. Marketing support All retailers will expect you to take an active interest in how your product is selling and in supporting these sales. The type of promotional support, how often it takes place and how much you are expected to contribute will vary by retailer and category. Misunderstandings can be avoided by addressing these questions early in negotiations – you will then have an opportunity to include a marketing plan in your proposal and take account of marketing costs when negotiating your cost price. Commercial deal The buyer’s aim is to agree a deal which meets their margin requirement for products their customers will want to buy. The margin on each unit will be the difference between the retail selling price and product cost price. All grocery retailers with a market share of 8% or more are bound by the OFT ‘Code of Practice on Supermarkets’ Dealings with Suppliers’ (see Who’s who). This Code exists to govern relations between major supermarkets and their suppliers and put these relations on a clearer and more predictable basis. Types of marketing support There are a large number of ways you may want, or be expected, to promote your product: Product sampling – typically the supplier provides products to be given away to customers as samples Price cuts – the retail price of the product is lowered Multi-buys – e.g. ‘buy-one-get-onefree’ (‘BOGOF’s) or ‘three for two’ Extra free – a greater weight/ volume of product for the same price Link saves – e.g. buying a specific sandwich, fizzy drink and crisps for a discounted price Points promotion – offering customers more points on the retailer’s loyalty card Competitions – chance to win ‘something’, details on or in pack Cost price negotiation The ultimate decision on the retail selling price for your product will be made by the buyer. The unit cost price you negotiate with the retailer will be determined by a number of factors including for example: Margin retailer requires Volumes forecast/sold Distribution method (who distributes) You should also check to see if VAT applies on your product and assess how this may impact on the deal and your margin. If the retailer allows it you may also want to work with store staff to ensure your product is always properly presented in store. Be aware that your promotional ideas will have to fit within the retailer’s overall trading strategy (e.g. Hi-low vs EDLP). RETAIL DEPARTMENTS Your cost base In order to agree a deal that will make you money you must know exactly what your costs are, what volumes you can realistically produce and what other commitments you need to make (e.g. promotional and waste support, and any other investments). Business Links and regional food groups should be able to help with this or point you in the right direction. RETAIL PROCESS 1 As a small supplier you are most likely to be asked to offer product samples. The retailer may prefer the supplier themselves to undertake the sampling, or a professional sampling company, which the supplier will be expected to pay for. On-going relationship with the buying team TIPS FOR LOCAL FOOD PRODUCERS How often? The retailer’s buying team is likely to have targets for the number, frequency and type of promotions across their category. They may for example require you to offer two specific types of promotion per year. This needs to be agreed during negotiations. Remember to cost these. The buyer will normally be your main point of contact. Buyers work under a lot of pressure handling a large number of suppliers (often more than 100) and an even larger number of products. They will need detailed, accurate information from you on a regular basis, for example: Updates on any plans for promotions Reports on what’s going on in the market in terms of supply conditions and what your competitors are doing Analysis of your service levels and delivery arrangements Tip-top financial records Early warnings of any changes to your product How much will you be expected to contribute? Promotions may benefit suppliers through increased sales and/or increased brand recognition and retailers expect suppliers to contribute to them. How much varies by retailer and category. Whilst you will be expected to provide samples free of charge you may or may not be required to meet all the costs associated with price cuts, multi-buys etc. You may be required to pay a fee to the retailer for them to administer the promotion on your behalf, provide point of sale material and so on. You may also be required to pay a rebate (known as an ‘overrider’), based on turnover of your product. You should also establish how you may receive sales data for your products from the retailer. Waste Support If sales forecasts are inaccurate products may not be sold, leading to waste. This is most likely for short shelf-life products. As shelf life comes to an end retailers may markdown prices to tempt purchase, but ultimately they may have to throw the product away. There are a number of ways in which retailers may expect suppliers to support this waste: Payment by suppliers to make up any difference on mark-downs or product wasted Payment to suppliers on a sale or return basis Suppliers altering case size to better meet sales demand 1 Always try and develop a good working relationship with the buyer. This is likely to include supporting verbal agreement with written (e-mail) confirmation, quick responses to questions/queries and keeping the buyer up-to-date with the information above. Remember, your buyer may move into another trading area at some stage. This is a fact of life - buyers have careers too. Other members of the buying team are likely to stay in place so there will be some continuity. However it is a very good idea to get to know the new buyer as soon as possible and build a relationship with them. 2 14 More frequent, small volume deliveries Again, check this during negotiations as waste support may impact on your margins. TIPS FOR LOCAL FOOD PRODUCERS 15 Technical/Quality assurance The technical team’s core function is to ensure the retailer sells safe, quality products.The 1990 Food Safety Act has placed the onus on the retailer for the goods it sells, so demonstrating ‘due diligence’ has become essential.This is particularly the case for retailer’s own-label but also affects branded suppliers. 1 Supply chain The supply chain (or logistics) team is responsible for efficient movement of product through the supply chain to individual stores.There are two main distribution models used for local/regional products: Supplier delivers... direct to store to a hub to a consolidation centre to a regional distribution centre ...using own transport or a third party haulier. 2 Hygiene and quality control Retailers need to be absolutely sure your premises meet their strict standards, particularly that: Necessary standards of housekeeping and hygiene are maintained The product is protected from foreign bodies at all stages of production Consistency of product quality is maintained through production All staff are committed to product quality and adequate training is in place Systems are in place to trace problems back to raw material sources Good analysis and records of the production process are kept Product safety requirements are met The approach chosen will vary between retailers and is influenced by a combination of factors: Number of stores stocking the product Product volume Location of supplier relative to stores and retailer’s RDCs Ordering system used Commercial assessment – who can deliver the requisite quantity of product, at the right times to the right places at the lowest cost Technical risk of product – e.g. frozen products will have to be temperature controlled Retailer (or nominated third party) collects... from supplier (backhauling) Certification Demonstrating you operate a fully functioning ‘HACCP’ system (see Who’s who) is a necessary, but not usually sufficient indicator of good technical/hygiene practice. These days retailers may require you to have been certified to the ‘BRC food technical standard’ (see Who’s who). Alternatively the retailer may want to audit your premises, which may be conducted either by their technical team or an approved third party. Which ever is required, you will be expected to pay for the audit. RETAIL DEPARTMENTS RETAIL DEPARTMENTS Product specification You will need to provide the retailer with a detailed breakdown of ingredients in your product, nutritional information, process details and other technical data. If you can obtain a copy of their technical manual you can incorporate relevant information into your product specification. Retailers will have policies which may ban the use of particular ingredients (e.g. genetically modified). They will need you to verify certain nutritional values and will want to check product shelf life and any cooking/preparation instructions. Be particularly aware if your product contains ingredients that may cause allergic reactions in some consumers (e.g. those with nut allergies). Finance Retailers want suppliers who can provide accurate, detailed financial information, delivered on time. Prices will usually be agreed with the buyer but the finance team oversees financial controls. Areas the finance department will focus on include: Credit control – does the supplier pass financial checks? Payment terms and invoice details – when you will be paid and on what basis? Day to day invoicing queries Method for paying suppliers – e.g. BACS, cheque etc Monitoring and settling long-term agreements – e.g. clarifying VAT issues (suppliers are expected to know the level of VAT their product attracts) Product recalls/complaints Hopefully this will never happen, but the technical team will need to agree detailed procedures with you for recalling a product immediately in case of emergency. You will also need to agree to the system of dealing with customer complaints and any costs involved. New product development New product development (NPD) often sits within the technical function. The NPD team will be relevant if you are asked to develop new products for the retailer. Also be aware that the NPD team may already be working with an existing supplier to develop new products which are similar to yours (if you’ve spotted a gap in the market others may have too!). EDI Electronic Data Interchange (EDI) is becoming the most common way that invoices and orders are communicated between retailer and supplier. Your retailer may or may not require you to invest in an EDI system. Legal The legal team is there to ensure that the retailer obeys the many laws associated with selling food. As such it may have an input across more than one department. Key areas include: Packaging – does it include all legally required information? Product name/description – are there any issues with it (e.g. if the term ‘organic’ is used, are ingredients certified as organic)? Barcodes – does the product have the necessary barcode? Is it registered? Is it readable? 1 Be clear about the payment terms offered to you and how this will affect your cashflow, particularly if your business is growing quickly and needs cash. The most common reason for delays in payment is incomplete or mis-matching paper work. Ask for guidelines on what’s needed, and a contact in the finance department in case things go wrong. Remember, you will need proof of delivery (POD) to be paid! 2 16 17 TIPS FOR LOCAL FOOD PRODUCERS Merchandising The merchandising team oversees the efficient allocation of shelf space and physical layout of products. The merchandiser works with other departments to decide: Where on the shelf the product will sit How much shelf space to allow the product How it could be promoted/ what displays are needed These decisions, particularly placement on the shelf, may have an impact on sales as shoppers are most likely to notice products more at eye level than above or below. Getting an advantageous position for your product on shelf may involve additional charges. Differences in supplying convenience chains and supermarkets There are many more similarities than differences in getting a product listed in a convenience chain compared with a supermarket chain. Many key considerations have already been highlighted. However, there are some key differences a potential supplier should be aware of. RETAIL DIFFERENCES IN SUPPLYING CONVENIENCE CHAINS & SUPERMARKETS Who you do business with Supermarkets deal directly with suppliers or ask them to supply through an existing larger supplier. Whatever method used, in the main suppliers will invoice the supermarket directly. Convenience stores operating under a ‘symbol group’ fascia (e.g. SPAR) are likely to be supplied by a specific wholesaler. This wholesaler may offer a valuable function in overseeing the process of dealing with the store including: Identifying the range of products and supplying those products Financial administration Store layout, marketing, merchandising and other advice Stores are usually owned independently, where the owner chooses to carry the symbol group fascia and operate under the group’s rules. Some stores may be owned by the wholesaler delivering to them. Typically the wholesaler delivers to store from a regional distribution centre. Individual stores may or may not be allowed to purchase some of their range direct from local suppliers. Stores may however request that a supplier is listed with the wholesaler. In some instances a supplier listed with the wholesaler may be asked to deliver direct to the store, rather than the RDC. The supplier is likely to invoice the wholesaler (not the individual store) whether or not the product is delivered to the wholesaler’s RDC or direct to store. The wholesaler therefore takes on the financial administration and takes the credit risk. They will take a different margin on products delivered direct to store versus those delivered to the RDC. Be aware that the retailer will also require a margin (which is typically negotiated with the wholesaler). Independent convenience stores (i.e. with no affiliations) are free to purchase from any supplier. Typically they purchase from a wholesale cash and carry outlet. There may be an opportunity to sell your products (direct to store) but be aware you will carry the credit risk. Alternatively you may wish to approach the cash and carry outlet to list the product, or suggest the store buys from a wholesaler you already supply. Marketing The marketing team is responsible for promoting products. The marketeer will therefore work with other departments to decide on: A product launch strategy How best to display the product within its space What point of sale (POS) material is required RETAIL DEPARTMENTS The marketing department will oversee the generation of POS material and brief store managers on the appropriate use of such material. 1 The communication between head office and individual stores is usually very good. However, it is worth checking stores to make sure your product appears on shelf the way you expect. By building a relationship with store managers you may be able to understand any problems and gain valuable feedback on how your product is selling. TIPS FOR LOCAL FOOD PRODUCERS Corporate affairs/PR The corporate affairs/public relations team has a role across the business to ensure effective communication and oversee the public relations function. The corporate affairs team will want to ensure that: Any product launch is organised correctly and gets maximum positive publicity Products are sourced ethically and your staff are treated fairly Customer base The convenience store performs a different function from the typical out-of-town supermarket. A convenience store shopper is typically on a ‘top up’ visit (e.g. looking to buy something specific for that day’s meal) as opposed to a core (e.g. weekly) shop. Size Convenience stores are much smaller than a typical out of town supermarket. There is less shelf space, requiring a strong focus on delivering core lines. The imperative is on managing space most effectively and listing profitable lines. A potential supplier must be clear therefore how their product can add to the existing range, demonstrate there is a convenience market for it and which products might be de-listed to make way for it. 1 Local and regional products often have an interesting story behind them giving you a great promotional opportunity. Editorial in local or national newspapers often transfers into increased sales, pleasing both you and the retailer. Try approaching the corporate affairs/PR department of the retailer, or regional food groups, they should be able to help you put together an interesting story and provide addresses for newspapers and the trade press. 18 TIPS FOR LOCAL FOOD PRODUCERS 19 Market overview ‘Foodservice’ is used throughout this section to refer to the sector of the food industry which provides meals for consumption outside of the home. Other terms used for the same sector include ‘away from home’, ‘out of home’ and ‘catering’. The market, when measured as the value of caterers’ sales to customers, is estimated to be £24.3 billion. This translates into approximately £8.6 billion worth of food sales into caterers (Source: Horizons F.S. Ltd). The market can be broadly split into two: the profit sector and the cost sector. Meals within the cost sector are generally provided out of necessity, whereas meals in the profit sector are provided in response to consumers’ demand. The market can be further split into a number of sub sectors: Supplying the foodservice market Route to Market A key issue for suppliers is deciding to whom they should be selling, in a market where the consumer is not normally the key decision-maker. In reality, although customers choose where to eat someone else has fixed the menu. There are many different ‘customers’ to whom suppliers need to sell, including chefs, buyers and distributors. The diagram below illustrates the main options open to suppliers within the foodservice market in terms of customers and routes to market. Supplier Profit sector Restaurants Quick service restaurants Pubs Hotels Leisure Cost sector Health care Staff catering Welfare Education Contract Distributer Delivered Wholesaler Cash & Carry Source: IGD Research Retail FOODSERVICE FOODSERVICE 100% 80% Services/Welfare Staff catering Pubs Foodservice - Operator Source: IGD Research/ACNielsen Share 60% 40% 20% 0% Food Sales Outlets Meals Served Education Leisure Quick service Health care Hotels Restaurants The chart below shows what proportion of food sold to operators flows through the various routes to market: Food Purchases by Distribution Channel These sub sectors’ share of the market place can be expressed as: Source: Horizons F.S. Ltd. 16% Delivered Wholesaler The above chart helps identify which parts of the market are the largest at all levels including number of meals, their value and how many outlets are needed to supply them. 13% 52% Others inc. retail Contract distribution Cash and Carry 19% Source: Horizons F.S. ltd Approximately half of all food sold to foodservice operators is currently delivered wholesale. National operators often select a preferred national wholesaler to deliver to their outlets. Smaller, local operators may also buy from local, specialist delivered wholesalers or cash & carry businesses. 20 21 National chains Operators One of the most important factors to consider when dealing with national chains of operators is that their chain represents a national brand. The brand needs to represent the same quality, values and identity for the customer whether the outlet is in Cornwall or Scotland. Consistency is therefore of paramount importance to the operator. In order to establish and maintain the brand identity across many outlets in a chain, companies tend to adopt a menu which can be fixed for as long as six months. The menu will generally be available across their entire chain, meaning that any food item featured upon it will need to be available nationally. This is likely to make supply by smaller, local food producers more difficult. There are some exceptions to this rule, including chains of four and five star hotels, where the resident chef may be given the freedom to develop a more individual menu. To find out more about any of the large national foodservice operators, company web-sites are often a good starting point. You may find information for suppliers about branded concepts, the extent of their estate (chain), structure of procurement teams, what is needed from suppliers and procedures and processes. There may also be information on preferred routes to market. Independent operators An ‘independent’ foodservice operator is defined here as a food outlet in the profit sector that does not form part of a national chain, where the owner/chef has more control over menu design and purchasing decisions. Routes to market The route to market chosen by the independent operator will affect who you deal with and what is required of you. Independent outlets are likely to purchase their food: Directly from the supplier – normally delivered by the supplier to the outlet From a catering wholesaler – either delivered by the wholesaler or collected from a cash and carry Who to target? Given the huge range of outlets in the profit sector, quality requirements and range vary tremendously. It is advisable therefore to identify outlets where your product will best fit by looking at menus: Do other local/regional products appear? Are similar quality products being sold? If you think there is an opening speak to the manager to find out how they purchase their food. Unlike national chains there is not likely to be a particular process you must follow in selling direct to independent pubs/restaurants, so be prepared to be flexible. 1 FOODSERVICE Do as much research as you can into potential customers before making an initial contact. You must have considered where your product will fit into the portfolio of brands and most importantly, how your product is better, different or cheaper than anything currently bought. What do independent outlets look for? Independents are often less constricted than their national chain equivalents in terms of sources of food supply and long term menu setting. They may therefore be more able to experiment with different dishes and suppliers. Independent outlets often give local food producers their best opportunity to supply the foodservice sector. FOODSERVICE TIPS FOR LOCAL FOOD PRODUCERS Distribution considerations When delivering direct to an outlet, the supplier should appreciate the following: Delivered Wholesalers Delivered wholesalers can provide many services for their suppliers, including: distribution; marketing; sales; promotional opportunities and access to new customers. For this reason, they can often be the best choice for smaller suppliers who could not afford to perform these functions themselves. Just like national operators, some of the larger, national delivered wholesalers provide a nationally consistent range. This means they need to ensure their entire product range is available to all customers across the country. However, products are starting to be sourced more locally in response to customers’ needs. This should give small, local food suppliers a greater opportunity to trade in this sector. It is important to gain a clear understanding of how to trade with each delivered wholesaler, as they have different ways of working. Speak with your regional food group about the opportunities or look at company web-sites for information. Lack of food storage space requires small, regular orders, possibly seven days a week Lack of space means packaging must be kept to a minimum Hours of operation may require delivery at odd times of day (or night) Given high workloads in kitchens the emphasis is on the supplier to ensure all paperwork is signed (payment of invoices may be delayed otherwise) Delivery of the quantity ordered is essential. A short order may mean a dish must be scratched from the menu leading to irate customers and an irate chef! 1 1 Wholesalers produce product/price catalogues for their customers. By getting hold of one you can see where your product might fit within their range, and what prices the wholesaler sells at. Bear in mind of course that the wholesaler will require a margin so the cost price you negotiate will be lower than the one appearing in the catalogue. Freshness and product quality are key attributes for chefs. Independent outlets may therefore be interested in local supplies of fresh produce (fruit, vegetables, meat, dairy products etc). This is particularly likely where the outlet does not have a contract with a third party delivered wholesaler. Outlets may want to trial a dish before adding it to a written menu. If the outlet serves ‘specials’ which don’t appear on a printed menu this may be an ideal, low risk, way for them to trial your products. 2 22 TIPS FOR LOCAL FOOD PRODUCERS TIPS FOR LOCAL FOOD PRODUCERS 23 Key factors in supplying foodservice Product quality/consistency When eating out most of us expect a meal to look and taste the same each time we have it. Foodservice buyers, whether for national chains or individual outlets will therefore focus on criteria that deliver this consistency, for example: specification; size (dimensions); colour; weight; taste, usable yield; shape. Public sector procurement Who is the ‘public customer’? Catering in schools, hospitals, prisons and other publicly run institutions fall within the ‘cost’ sector. Public institutions are therefore the ultimate buyer. Examples include: The NHS, HM prison service, local authorities, health trusts and individual schools (where purchasing is decentralized). Procurement Rules for Public Bodies When procuring food (and other goods) above a relatively low threshold value public sector bodies are required to comply with EC procurement directives and UK Regulations implementing them. These regulations are designed to ensure that procurement is fair, transparent and non-discriminatory. As most contracts are above the threshold level the normal method of procurement is to issue a contract for tender. These rules, and the tendering process, have placed barriers in the way of small food producers in terms of: The focus on unit cost and delivery to a tight budget The large volumes of food required The cost of preparing tenders, with no guarantee of success The stiff competition from much larger firms Price Given the overheads of running a food outlet it is not unusual for the price of the dish to the customer to be three or more times the cost of the ingredients on the plate. A chef will have a ‘plate cost’ and associated ‘plate price’ at the forefront of his/her mind when negotiating a cost price with a supplier or selecting products from a wholesaler’s list. Bear in mind that all components of a meal (plate) are costed. Where menu prices are set for the duration of a printed menu, a chef will want to agree a set cost price for the same duration. Known Volumes If your product is sold in a market where consumers have relatively little choice (e.g. trains, airlines, hospitality caterers or the cost sector) you are more likely to have known levels of sales compared to your product appearing on a menu with many other items and relying on consumer choice. However, trains/airlines etc tend to require large volumes on a cyclical basis. Servicing this may be difficult so think carefully before entering this market. How is this changing? Central Government is keen to integrate sustainable development objectives into public procurement. This means focusing less on initial purchase costs and more on ‘value for money’ including product quality. It is thought that public buyers can set requirements for the following without breaking EC rules: FOODSERVICE Relationship/Commitment The menu is key to the sourcing requirements of many foodservice outlets. As the menu will typically stay the same for several weeks or months the chef will look for supply partners he feels confident can meet this commitment. Letting down a chef, either through short deliveries, non-deliveries, or poor quality products may result in termination of any agreement with little chance of regaining a foothold. FOODSERVICE Delivery frequencies Freshness Specific varieties/taste Production standards (e.g. farm assured) How smaller suppliers can benefit Differences in supplying foodservice and retailers General Foodservice outlets typically work to menus for several months which are set several months in advance Packaging requirements vary: products sold through a cash and carry need innovative packaging to encourage purchase; where products are delivered wholesale innovative images/graphics are often less important. In all cases, however, packaging must be robust and clearly labelled In foodservice pack sizes may vary greatly (from individual portions to large ‘catering’ packs) Brands tend to be less important in foodservice than retail Distributing to the food service sector can be more complicated and expensive In the foodservice chain, changes may occur to the size/format of your product which are beyond your control A focus on ‘value for money’, not just cost, should enable some key attributes of local supply (e.g. freshness) to be exploited. Likewise, potentially lower distribution costs may assist in a more competitive tender. However the challenge to Government is to work with public sector buyers to encourage a focus on these wider objectives. 1 If you are keen to explore a public contract the best way may be to speak to procurement departments in local authorities; collaborate with other likeminded suppliers; and seek advice from regional food groups on opportunities within your region. By monitoring contract tenders you will be able to identify any which may be structured to encourage smaller suppliers, by for example: requiring large contract bidders to include smaller producers in their bids promoting the use of a larger number of smaller lots during the tendering process tendering more frequently but for smaller quantities Independent outlets Often lack food storage space – requiring smaller deliveries more regularly Have no central distribution – everything is delivered to the back door Lack economies of scale May focus on a specific cuisine 24 May want to sell foods that customers cannot buy in supermarkets 25 TIPS FOR LOCAL FOOD PRODUCERS Who’s who Name Also known as Role Name Also known as Role Account Manager National account manager Business account manager Key account manager Category manager Administration co-ordinator Buyer’s assistant The main supplier contact responsible for dealing with a buyer. Advanced shipping notification ASN What’s what Electronic delivery note sent by the supplier in advance of the arrival of goods at the customer’s premises. Usually a large supplier acting on behalf of a retailer to organise the supply of products in a specific category. Smaller suppliers may be expected to trade directly with the agent rather than the retailer. In its simplest form, the collection of goods from local suppliers using vehicles returning from store deliveries. Operated by all UK food retailers to reduce costs and aid efficiency. Agent Broker Consolidator Category captain Hub Administrator Working within the commercial team, responsible for the administration related to buying. Senior buyer with overall responsibility for a product category or categories (e.g. beers, wines and spirits; grocery; produce etc). Responsible for product purchasing across a range or category. Backhauling Bar code Product code EAN Business unit director Trading director Category manager Senior manager The code, represented by numbers and bars, used on packaging to enable a product, or outer case, to be ‘scanned’. Bar codes operate to internationally agreed standards. Further information available from e-centre: www.e-centre.org.uk BRC food technical standard BRC = British Retail Consortium A standard covering all areas of product safety and legality. Suppliers are audited and certified to the standard by an approved certification body. http://www.brc.org.uk/Certification.asp REFERENCES WHAT’S WHAT REFERENCES WHO’S WHO Buyer Buying controller Category buying manager Category manager Trading manager Buying manager Product group manager Trading team Category team Customer Shopper Business-to-business B2B Flow of information from one business to another. This can cover a range of activities, such as marketing and conducting market research. As above, but the flow of information is between a business and the end consumer. Business-to-consumer B2C Buy one get one free BOGOF A type of special offer, where purchase of one product means another is thrown in free. The number of individual products in an outer case. A group of products that satisfy a consumer need (e.g fresh produce). Strategic management of product groups, through trade partnerships, which aims to maximize sales and profits by satisfying consumer needs. Case size Outer case Commercial team The team responsible for all buying decisions. The person who visits the retail store to purchase products. The shopper may not be the same person as the consumer. Retailers often use the term ‘customer’ when referring to the consumer. Responsible for invoicing and payment. Main initial contact for small/local manager suppliers, who manages local/regional sourcing activities for the company. Focus on identifying and listing local product. Responsibilities vary by company. Responsible for understanding consumer needs, brand development, promotional planning and analysis. Responsible for range and product layouts. Responsible for movement of products through supply chain. Responsible for quality assurance; new product development. Category Category management Consumer Code of practice OFT code Code existing to govern relations between major supermarkets and their suppliers and put these relations on a clearer and more predictable basis. http://www.dti.gov.uk/ccp/topics2/pdf2/codeofpractice.pdf Consolidation centre Primary consolidation centre Regional small scale stocking points used by some retailers to consolidate loads from large numbers of smaller suppliers. Retailers deliver full lorry loads from consolidation centres to RDCs. Finance department Local sourcing manager Financial administration Regionality manager Local procurement manager Local choice manager Local procurement team Consumer loyalty Consumer purchase decision tree Loyalty Purchase decision hierarchy Consumer’s allegiance to a product, brand, store or image. Order of priority in which consumers make their purchase decisions. Can be influenced by a large variety of factors (e.g. price, brand, quality etc). Cost Price Product cost Unit cost Price at which the supplier sells a product to the customer. Price may or may not include VAT or other taxes (e.g. duty), all of which must be stated. Wholesalers who deliver to the customers’ premises (as opposed to ‘cash-and-carry’ where the customer picks up from the wholesaler). Local sourcing team Delivered Wholesaler Demographic data Information which breaks down the population structure in terms of age, income, household size etc. Store delivery Direct to store Delivery method straight from supplier to retail store, bypassing regional distribution centres. The physical movement of product from one place to another. Marketing controller Category marketing controller Customer planner Space manager Logistics Distribution Technologist Technical controller Direct delivery Distribution Logistics Merchandiser Supply chain team Efficient consumer response ECR An approach to supply chain management in which the supply chain is streamlined to react to consumers’ actions while using resources efficiently. The exchange of documents in a structured form between computers via telephone lines. Used most commonly for purchasing and distribution - orders,confirmations, shipping papers and invoices. Electronic data interchange EDI Technical manager Electronic point of sale EPoS Data recorded at point of sale (check out) from bar-code information. Used to track and forecast consumer purchase trends and monitor stock levels and control. 26 27 Name Also known as Role Name Point of sale Also known as PoS Role The most literal meaning is the physical location where the product is displayed for sale (e.g. shelf or checkout). PoS is also used in reference to marketing material displayed with the product. Individual line within a product range or category. Each variation of a product (e.g. different size) is a separate SKU. The support customers may expect suppliers to give listed products. This may come in many forms. Some form of special offer that provides additional benefit to buying one or more products. Promotions follow a variety of models (e.g. BOGOF). Everyday low cost EDLC A trading strategy which reflects all discounts and/or promotional funding in the ongoing cost of products to the retailer. Partner of EDLC - trading strategy which reflects all discounts and/or promotional funding in the ongoing retail selling price. Everyday low price EDLP Product Stock keeping unit SKU Facing The physical (linear) space that one product occupies on a shelf or fixture. FGP Bay Gondola Module Shelf Establishing a price for goods excluding transport costs; i.e. ex-factory. The physical space from which a product is sold in a retail store. It can include shelving, peg boards, chiller cabinets, freezers etc. Product support Marketing support Factory gate pricing Fixture Promotion Proof of delivery POD Often a form requiring customer signature when product changes hands. Choice/number of products available in a given store or depot. The process of changing the level of distribution of a product or range. Can cover the introduction of new lines, deletion of existing lines, change in number of stores stocking the product. Footfall Forecast Frequency of purchase Consumer traffic into a store, or a specific area of a store. Calculation of future sales of a product. Used to help planning. A measure of how often a product is purchased by consumers, over a given time period. Margin Difference between cost price and selling price. Expressed as a cash figure, or a percentage. Range Range change Distribution Gross margin (retailer) Range cycle A period of time during which a product or range can be introduced or deleted to a store or depot. HACCP Hazard Analysis and Critical Control Point System applied to monitor and control microbiological, physical and chemical factors affecting food safety and acceptability. Number of cases high per pallet. Trading strategy driven by product offers and discounts. Regional food Locality food Term used to describe foods that have a specific association with/reputation for good quality when produced in a region. Regional distribution centre REFERENCES WHAT’S WHAT HI Hi-Low Incremental Incremental sales RDC Central distribution centre Depot Warehouses designed to hold stock ready for onward distribution to retailers. Most retailers have a network of RDCs. Small suppliers may or may not be required to deliver into an RDC. Represent quality, small and medium sized food and drink producers in their region. Their aim is to assist business development (see key contacts). REFERENCES WHAT’S WHAT Regional food group The additional sales of a product occurring directly as a result of a specific activity (e.g. sales promotion). A manufacturing/delivery process where a minimum of goods are kept in stock. Items are planned to arrive precisely at the time they are required for use or dispatch. Key performance indicators KPI Key performance measures Legal Usually referring to the ‘legal department’ responsible for ensuring products and actions meet legal requirements. Local food There is considerable debate as to identifying a definition of local food. IGD consumer research has found that 63% of consumers see local food as from the county they live in or within 30 miles of where they live. Local sourcing Regional ranging A process of matching consumer needs on a local/regional basis with selected products likely to be demanded. Market share Percentage of business in terms of value or volume, held by a product, brand or company. Used to indicate relative strengths or weaknesses within a market place. Merchandising The allocation of shelf space and physical layout of products within a category or fixture. NPD New product instructions Operator Foodservice operator Companies who own/manage foodservice outlets (e.g. restaurants and pubs etc). The term is often used to refer to national chains but also includes independent operators. Term used when a product is unavailable at a given point in supply chain (e.g. at point of sale or RDC). Outer case Case The packaging unit in which products are delivered from supplier to retailer. Outer case code TUC Barcode on outer case used to electronically track product through the supply chain. Payment made by a supplier to their customer based on a percentage of product sales over a set time period. A product showing the retailer’s brand name. Retailers will demand very strict specifications for local/regional products carrying their name. A flat, open structure (usually constructed of wood) used to hold and transport merchandise through the supply chain. Year-on-year Planogram Stocking plan The medium of communicating a range layout to retail store or distributor. Wholesale selling price Waste as percentage of sales Unique selling proposition Process involved in development and launch of new lines, either branded or own-label. Sub-category Shelf edge label Service level Sensory Serial shipping container code Seasonal Measures deemed essential in monitoring business performance (e.g. service level, sales, profit etc). Sales based ordering Retail selling price Route to market RFG Just-in-time JIT RSP The price at which a retailer sells a product to the consumer. The supply chain that a product follows to get to the final consumer. Major routes include retail and foodservice. Routes to retailers and foodservice operators can differ greatly. Automated store ordering SBO A system of building a product order by using EPoS data to generate an order for future stock requirements. Reference to a specific time of year when a product is available or when there is a specific focus on a product. Organoleptic SSCC Eating qualities of a food e.g. taste, texture, mouth feel. The unique identification of a logistic unit using an 18-digit data structure. Product availability Extent to which demand is met by product availability. Usually expressed as a percentage of product availability versus requirements. SEL A descriptor that identifies the adjacent product on shelf. The shelf edge label contains information covering selling price, barcode, product description etc. A sector within a product category (e.g. if the category is desserts, a sub-category may be chilled desserts). New product development Supply chain Logistics The chain through which a product travels from raw materials to consumption. TI Trading objective Number of cases per pallet layer. Usually a commercially based goal, often centred around sales, profit or market share. UDEX Out of stocks Stock outs Universal Descriptor Exchange Allows suppliers and their customers to have a ‘common currency’ of product descriptions. It is used by several large supermarkets and foodservice companies. www.udex.com USP The real point of difference of a product, in comparison to others. It could be a wide variety of things including taste, packaging, origin and so on. A form (or series of forms) all new suppliers complete including company information, product information/specifications etc. A common method of assessing levels of waste. A maximum level will be set during negotiations. Vendor creation form VCF Overrider Rebate Discount Own-brand Own-label Retailer label Retailer brand Waste support The support customers expect from suppliers to mitigate the effects of product waste. WSP YOY The price at which a wholesaler will sell products to their customers. A direct comparison of results with the same time in previous years. Pallet GKN blue Euro pallet 28 29 Useful contacts Recommended first points of contact for small producers are the regional food groups and Food from Britain Acknowledgements IGD and Business in the Community would like to thank the Farmers Fund, Defra and SPAR for sponsoring the research and publication of this guide. www.foodfrombritain.com Tel: 020 7233 5111 Regional food groups The regional food groups represent quality, small and medium sized food and drink producers within their region. Their aim is to assist member businesses develop and expand profitable, sustainable markets for their products, utilising regional strengths, whilst raising consumer awareness of the excellent product available from their region. Food from Britain provides contact details for each of the regional food groups. Food from Britain For buyers and consumers looking to source British regional food and drink, Food from Britain’s online guide provides invaluable information on over 2000 producers and their products from around the UK. The guide is available from the website. www.regionalfoodanddrink.co.uk Tel: 020 7233 5111 IGD and Business in the Community are very grateful to the following organisations for their valuable support in the production of this guide and in contributing to the local sourcing workshops: REFERENCES USEFUL CONTACTS Business Link The business link network comprises operators throughout England, delivering business services to small and medium sized enterprises. Business Link offers information and advice on anything from starting a new business to exporting. See link for your nearest one: www.businesslink.org Tel: 0845 600 9006 A.F. Blakemore & Son Ltd Arnotts Asda Stores Ltd Booker Cash & Carry Booths Supermarkets Brakes Budgens Stores Ltd Business Link Compass Group plc Connect Plus Ltd North West Fine Foods North West Food Alliance P&C Morris Ltd Safeway Stores plc Sainsbury’s Supermarkets Ltd Sarum Foods Ltd Scottish Business in the Community Scottish Executive Scottish Food and Drink Simon Howie Butchers Small Business Gateway Perthshire Small Business Service Sodexho Ltd Somerfield Stores Ltd South East Food Group Partnership Stoke Farm Orchards Taste of the West Tastes of Anglia Taypack Potatoes Ltd Tesco Stores Ltd The Carlton Tower Hotel The Co-operative Group (CWS) Ltd The Countryside Agency The Grocer Ulster Farmers’ Union W.M. Morrisons Supermarkets plc Waitrose Ltd Whitbread Restaurants Ltd Women’s Food and Farming Union Regional Development Agencies (RDAs) RDAs were established in 1999 to help further economic growth and prosperity and to improve the quality of life in urban and rural communities. They offer a range of support measures to rural businesses: RDAs in England www.rdauk.org Tel: 020 7654 1507 Welsh Development Agency www.wda.co.uk Tel: 01443 845500 Scottish Enterprise www.scottishfoodanddrink.com Tel: 0141 228 2409 Regional food technology centres These provide small firms with advice on a range of technical issues including equipment, process design, product labelling and HACCP. See link to find your nearest centre: www.defra.gov.uk/Science/LINK/Food/Funding/RTTC_Information_Leaflet.PDF Department of Agriculture and Rural Development Edmund Barton Ltd 3663 First for Foodservice Food and Drink from the South East National Farmers Union (NFU) www.nfu.org.uk Tel: 020 7331 7200 IGD www.igd.com Tel: 01923 857141 Food from Britain Heart of England Fine Foods Leckford Estate National Farmers Union of Scotland (NFUS) www.nfus.org.uk Tel:0131 472 4000 Business in the Community (BiTC) www.bitc.org.uk Tel: 0117 923 8750 Lynher Dairies Cheese Company Ltd M J Baker Foodservice Marks & Spencer plc Mitchells & Butlers plc Mooney Hotel Group Moyallon Foods Myerscough College National Farmers Union National Farmers Union Scotland NI Hotel Association Nick's Warehouse Farmers’ Union of Wales (FUW) www.fuw.org.uk The Countryside Agency www.countryside.gov.uk www.eat-the-view.org.uk Women’s Food and Farming Union (WFU) www.wfu.org.uk Food Standards Agency (FSA) www.food.gov.uk Tel: 020 7276 8000 British Retail Consortium (BRC) www.brc.org.uk Tel: 020 7854 8900 Department for the Environment, Food and Rural Affairs (DEFRA) www.defra.gov.uk Tel: 08459 33 55 77 Food and Drink Federation (FDF) www.fdf.org.uk Tel: 020 7836 2460 30