F&B

Bidfood – Potential future supply challenges

Many of you will have seen a number of well-publicised articles in the news recently highlighting the issues that well-known fast food chains have been facing in sourcing a number of key product lines, for example McDonalds, Nandos and KFC.

These same challenges are affecting the wider hospitality sector and those foodservice wholesalers that supply it, as well as food retailers right across the UK. They are driven by a number of underlying issues including:

  • Covid-19, and the pressure on supply that the subsequent lockdowns and reopening mobilisations have caused.
  • Significant variations in demand, which are often much higher than expected and above the capacity of some of our supply partners
  • Brexit, and some related delays with imported products coming into the country
  • Industry-wide shortages of HGV drivers and hauliers, warehouse, production and also hospitality staff, some of which have been exacerbated by Brexit and return of some EU nationals
  • The ‘pingdemic’, social distancing, and Covid-19 workplace protocols which have all impacted on production at many manufacturing and food processing sites, and right across the supply chain
  • Avian and swine flu which have affected the availability of some key meat and poultry lines
  • Extreme weather conditions which have delayed the planting and drilling of some crops, impacting quality and supply – such as the current issues we are experiencing with potato products
  • Soaring costs of shipping and freight, as well as the closure key ports in China which have affected the cost and availability of many globally imported lines.
  • Instances where availability challenges with some products have a knock-on effect on other, similar lines.

We can’t foresee exactly how long these challenges will continue to affect availability of some key food and drink categories, however we anticipate that there will be some impact for several months.

I am therefore writing to update you on where we see availability challenges arising, the steps that we are taking at Bidfood and our advice on the measures you can take yourself to mitigate these issues.

 

Which products are affected?
At Bidfood we offer an extensive range of products, sourced from a wide base of suppliers, which gives us a lot of flexibility when it comes to averting supply issues. As a result, whilst we are seeing supply issues on specific products and brands, from a category perspective we are experiencing good availability. The main categories where we are seeing supply challenges on specific lines include:

 

Ambient

  • Soft drinks – including water
  • Sauces – both table sauces and sachets
  • Crisps and snacks
  • Sugar
  • Some tinned fruit – especially on imported lines
  • Confectionery products

 

Frozen

  • Bakery items
  • Chips
  • Frozen fruit
  • Frozen fish
  • Frozen desserts

 

Chilled

  • Chicken
  • Bacon
  • Dairy products – including milk and yoghurts

 

Non-food

  • Plastic takeaway and packaging products.

 

What is Bidfood doing?

Whilst there are availability challenges on specific products, we are pleased to say that our availability at a category level is generally good. Our team have been working incredibly hard to mitigate shortages by leveraging our strong relationships with suppliers and working closely with them to:

  • Understand where in-bound supply issues will arise and manage our supply partners where issues do occur to develop solutions
  • Closely monitor any risks and mitigate these with stock build where possible, and alternative contingency supplies etc.
  • Share detailed forecasts with suppliers to ensure they are equally well prepared for any sales uplifts and variations in demand
  • Identify appropriate alternative products and other sources of supply
  • Develop alternative routes to market, including further backhaul solutions or leveraging our existing 3PL partnerships
  • Communicating actively with our sales teams about known issues, our plans to address them, expected resolution dates and proposed alternative product solutions.

 

What are we doing to mitigate issues from our own outbound delivery perspective?

  • We have undergone an extensive recruitment drive to close gaps where we have any staff shortages
  • We’ve invested in smaller vehicles, and have extended our HGV fleet
  • We have proactively provided sales information to customers for their key products in order to help with forecasting (for example current and pre-lockdown levels), and are actively encouraging customers to forward order as far as possible
  • Our account teams are working with customers to identify appropriate alternatives.

 

What steps can you take to navigate any availability challenges?

  • Be agile with your menu planning
  • Use generic rather than specific menu descriptions where possible
  • Work with your Account Manager to understand which products are subject to known availability issues and to discuss proposed solutions
  • For any significant known changes in demand profile, work with your Account Manager to provide as much advance forecast information and wherever possible place a forward order
  • Consider having alternative dishes or ingredients in mind as a ‘Plan B’ for example:
    • Alternative protein sources like beef instead of chicken
    • Frozen equivalents of fresh products
    • Own brand products in place of branded products
  • Review known out of stock products and develop plans to switch to alternatives on day to day basis
  • Wherever possible keep to standard, consistent menus built on products with strong availability and limit level of menu changes
  • Understand which alternatives products meet your allergen and nutritional requirements – Bidfood Direct or your sales contacts can provide you with up-to-date allergen and nutritional information on all of our products
  • Make sure you are on top of allergen and nutritional information for the products that you buy, given the imminent launch of Natasha’s Law
  • Consult your Account Manager or Telesales Executive to check availability of the lines you plan to purchase, or to ask about suitable product alternatives.

These are extraordinary times, and challenges facing our industry, our supplier partners and the entire food supply chain are exceptional. We will be monitoring the situation closely and will continue to update you as and when we have any further information.

Thank you so much for your continued support and co-operation at this time.

Jim Gouldie – MBE

Supply Chain and Technical Services Director

26th August 2021