Operational review

Bidvest Fresh UK

BIDVEST FOODSERVICE EUROPE

Stephen Oswald Managing director

Bidvest Europe is a market-leading, multi-temperature foodservice and product distributor serving customers in the hospitality, institutional, catering and retail sectors in the United Kingdom, Belgium, the Netherlands, Czech Republic, Slovakia, Poland, the Baltic States, Saudi Arabia, Turkey and the United Arab Emirates. The product and service range includes own-brands, finished products, fresh produce, food ingredients, meat, seafood, equipment and logistics solutions. The business operates as a solution-finder and partners customers in areas such as menu development and the delivery of one-stop ordering efficiencies.

Financial performance

	Net sales increased 33% (10% organic)
	Operating profit up over 100% (43% organic)
	Fish business drove all the organic growth

Non-financial performance

	Provided over GBP2 million of sustainable fish to the London Olympics under demanding conditions
	Grew customer base, increased average spend and increased average drop value
	Expanded seafood sales force by 10%
	Renamed the business Bidvest Fresh, to reflect renewed position in market
	Tightened credit control in a recessionary economy, reducing the cost of bad debts by 33%

Diesel usage		Water usage
Paper usage		Employees

Innovation and new investment

	Acquired Oliver Kay Limited, a fresh produce business that contributed strong sales and profit growth
	“Buy direct” campaign initiated to strengthen the supply chain across as many core product lines as possible and reduce cost while giving greater control over provenance
	Re-emphasising that the business is small, local and specialist
	“Full service” initiative launched to connect the team that engages with customers at all levels

Disappointments and challenges

	Salmon prices increased by over 50% between the first and second halves. This dramatic increase was difficult to pass on and impacted margins
	Start-up fine foods business was slow to gain traction

Changes in the operational environment

	Growing customer demand to fix prices for longer periods. Our response, where possible, is to contract back-to-back with suppliers
	Some disciplined customers shifting to a central distribution model. We created a small sales team to address this specialist market
	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

Risks and responses

	Low margins at recognised customers with national set menus – addressed by closer work on menu development and taking a proactive role to influence core menu lines
	Increased use of DNA testing on delivered products has sharpened the need to verify sources and maintain the traceability of products through the business. This has cost implications
	Growing number of NGOs, personalities and governments provide 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

2014 targets, objectives and factors affecting future results

	Expand sales in low-penetration regions
	Start first e-commerce customer