Ian Murphy: The future of our supply chains

Ian Murphy, Managing Director, Foodbuy discusses the future of food, beverage and non-food supply chains, both here in the UK and further afield

With the majority of hospitality and foodservice businesses in the midst of planning their return, but still (at the time of writing this article) unable to completely open their doors to consumers and customers, Covid-19 continues to impact our supply chains.

Businesses are having to be more agile than ever before, adapting and evolving to ensure they succeed in this “new normal”. But whilst operators are busy adapting their businesses ready for the return, so are suppliers, growers, manufacturers, wholesalers and distributors.

Some are producing reduced ranges and focussing on key in-demand products, others are operating with skeleton teams meaning reduced deliveries, the list goes on. But as the UK’s leading food procurement organisation, we wanted to share some of our thoughts on how supply chains are shaping up, both now and in the future.

Food and Grocery

• Greater transparency – We expect clients and consumers to be more conscious of where their food is coming from. This doesn’t necessarily mean that your meat needs to come from a local farm or butcher, but openness and transparency of your supply chain – from farm to fork – will be vital
• Supporting British – For the UK to become self-sufficient for its food, price remains a big obstacle. As a nation, we import because it’s cheaper, but also because it gives us access to products that aren’t grown in the UK all-year round. Price is likely to become an even more important consideration moving forward
• Menu flexibility – A year ago, pre-Covid, if you asked most businesses their biggest concern, the answer would have been Brexit. Fast forward a year and Brexit planning has put us in a really good position to combat any Covid related shortages or issues. Ensure your procurement partner holds multiple supply origins, and then be agile and prepared to make last minute switches based on demand and supply

Retail, Food-to-Go, Bakery and Alcohol

• Consolidation and prioritisation – We’re seeing many manufacturers temporarily consolidating ranges by reducing – or in some cases, pausing – production of slower moving products. This is allowing them to focus on producing high-volume, fast-moving lines which is helping them with stockholding of raw ingredients, but also creating production efficiencies. Focus your orders on high-volume, fast-moving lines as this helps suppliers to be more efficient in their production methods
• Availability of raw items – Retail suppliers will undoubtably be impacted by the availability of fresh produce, should there be supply shortages, and they themselves may face some tough decisions around where they source their produce from to keep costs at a minimum. Inform suppliers in advance if you’re going to be increasing the volume of orders you are placing. This helps them to plan more effectively and meet demand

Supplies, Equipment and Services

• Supply and demand – Personal Protective Equipment (PPE) is seeing record levels of demand due to the Covid pandemic, especially for products like: Hand sanitiser, gloves and masks – with demand outstripping supply on a global level. Some countries have placed restrictions on product leaving their borders, and with a significant proportion of airlines grounded, airfreight cost and availability remains volatile with lead times almost impossible to predict. Remember that over ordering puts unnecessary pressure on the supply chain and can leave other key businesses without product
• Diversification – We’re seeing lots of businesses diversify in order to survive. As an example, some alcohol suppliers (for instance, Brewdog) have moved production of alcohol to hand sanitiser. This is great news, and a great move by these suppliers, just make sure the products are meeting the necessary health and safety accreditations you need
• Takeaway and pre-packaged – To help respect social distancing, we’re expecting to see a significant increase in takeaway and pre-packaged food sales. Balancing the demands of offering great takeaway and food-to-go options, with that of disposables and consumables sustainability, will be key to the success of businesses in this area. Also think about how you can give your consumers greater confidence that your meals have gone through safe and secure supply chains

Logistics and Distribution

• Reduced volumes – Whilst supermarkets are struggling to restock shelves quick enough, foodservice distributors have had to manage unprecedented reductions in volume which is putting a huge strain on warehouse operations. Many have been working tirelessly to ensure surplus stock does not go to waste by offering click and collect and home delivery services for the general public
• Forecasting – As businesses begin to remobilise, distributors will need visibility of how and when volumes are likely to increase. Planning will be key to ensuring your business is able to remobilise successfully – give your partners as much notice as possible so they can plan ahead and bring back staff from Furlough
• Seasonal demand – Fresh produce suppliers have been able to support our clients well, but as growing seasons change, the lack of UK pickers may begin to see some challenges for growers. Expect to see a greater reliance placed on a UK picking workforce

We’re here for you

These are unprecedented times, but as a leading food procurement organisation, we are doing all we can to ensure our clients continue to receive first class procurement services. If you would like to learn more about how we can assist in any way during these difficult times, feel free to contact us.