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Graham Whiley ir Margreet Westerhuis, „Eksporto galimybės maisto pramonės įmonėms Jungtinėje Karalystėje“
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Graham Whiley ir Margreet Westerhuis, „Eksporto galimybės maisto pramonės įmonėms Jungtinėje Karalystėje“



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  • 1. Lithuania Food Export Seminar Embassy of the Republic of  Lithuania to the UK• 8.30 – 9.00 Registration• 9.00 – 9.20 Welcome and project introduction• 9.20 – 10.00 UK food market overview• 10.00 – 10.40 How the sectors and subsectors work and purchase • 10.40 – 11.30 Basic project entry requirements• 11.30 – 12.00 Break (coffee)• 12.00 – 13.20 Category analysis and product positioning• 13.20 – 14.00 Summary: practical examples, Q & A
  • 2. Embassy of the Republic of  Lithuania to the UKProject Introduction
  • 3. Embassy of the Republic of  Lithuania to the UKUK Food Market Overview
  • 4. UK food market overview Embassy of the Republic of  Lithuania to the UKRetail ‐ Supermarkets (Multiples) ‐ Independent retailers & Symbol groups ‐ Speciality food outlets ‐ On‐line retailersFood Service ‐ Delivered Wholesalers ‐ Chain end users ‐ Independent end usersFood ingredients ‐ Food Manufacturers ‐ Further Processors (e.g. blenders, slicers) ‐ Category brokers and importers
  • 5. Retail: Multiple market share Embassy of the Republic of  Lithuania to the UK Stores % share• Tesco 2900+ 30.2• Asda* 550+ 17.9• Sainsbury’s 1000+ 16.7• Morrisons 500+ 12.2• Co‐op 3000+ 6.4• Waitrose 300+ 4.5• Aldi UK 500+ 3.5• Lidl UK 600+ 2.5• Iceland 900+ 2.1*Netto UK purchased by Asda in 2011• Sources: Kantar Worldpanel total sales 12 weeks ending 27/3/12
  • 6. Embassy of the Republic of  Lithuania to the UKUK Retail Market Split Multiples: Tesco, Sainsbury Etc 95% 5% Independents & Symbol Stores
  • 7. Retail : Independents Embassy of the Republic of  Lithuania to the UK• Department stores: Selfridges, Harrods, Harvey Nic• Symbol groups : Spar, Musgrave (Budgens & Londis), Mace, Premier, Cost cutters• Small Independent chains: Booths, Whole Foods Market, Neals Yard • Health Food Stores: Holland & Barrett• Deli’s: La Fromagerie, • Farm shops: Windsor, Laverstoke, • Garage forecourts• Cash & Carry: Booker, Makro, Costco• Garden Centres: Wyevale, Dobbies, • Farmers markets• On‐line / home delivery retailers: Ocado, Amazon, Goodness Direct
  • 8. Retail trends & market drivers Embassy of the Republic of  Lithuania to the UK• Trends Organic, Fair Trade Food miles / local / Fresh / Seasonal Provenance (stories behind the products) Free From: Gluten free but also wheat, dairy, refined sugar Cafes and food stations in stores Store recipes endorsed by celebrity chefs New forms of packaging; pouches, recyclability, less is more No artificial colourings, flavours and preservatives Cup cakes, raw food, superfoods Ready meals & scratch cooking• Key Market drivers Private / own label (KVI’s) Price comparisons with other retailers, money back off shopping incentives Promotions: BOGOF, Multi buys, Meal deals Efficient retail operations: merchandising, fulfilment planning
  • 9. Tesco – Fresh Produce Embassy of the Republic of  Lithuania to the UK
  • 10. Whole Foods Market – fresh produce Embassy of the Republic of  Lithuania to the UK
  • 11. Whole Foods Market Embassy of the Republic of  Lithuania to the UK
  • 12. Partridges ‐ charcuterie Embassy of the Republic of  Lithuania to the UK
  • 13. Embassy of the Republic of Whole Foods Market Lithuania to the UK
  • 14. Embassy of the Republic of Tesco Baby Lithuania to the UK
  • 15. Embassy of the Republic of Whole Foods Market Lithuania to the UK
  • 16. The Food Service  Sector Embassy of the Republic of  Lithuania to the UKThe Foodservice sector is:• About 30% of UK food market by value and 10% by volume• Extremely diverse• Cosmopolitan• Not developing uniformly• Sophisticated and professional• About 260,000 outlets
  • 17. Food Service Embassy of the Republic of  Lithuania to the UKThe Foodservice sector is made up of large subsectors:Cost Sector – food purchased to feed at lowest cost e.g. Hospitals Schools & Universities Ministry of Defence PrisonsProfit Sector – service provided to consumers at a profit e.g. Hotels Pubs Restaurants Travel and Leisure
  • 18. Food Service Embassy of the Republic of  Lithuania to the UKThe Profit Sector is yet more diversified:• Independents about 40%• Chains about 60%Chains then breakdown between• Disciplined (e.g. Mcdonald’s, TRG, Tragus, JD Wetherspoon) 20%• Undisciplined (e.g. Best Western, consortia) 40%
  • 19. Embassy of the Republic of  Lithuania to the UK UK Foodservice Market Disciplined Chains e.g. Mcdonalds Central distributionTRG, Tragus, JD Wetherspoon 20%Disciplined and Undisciplined chains Wholesale Distributione.g. Greene King, Best Western 40% Independents 40% Wholesale Distribution
  • 20. Foodservice trends & market drivers Embassy of the Republic of  Lithuania to the UK• Trends QSR’s performing strongly Branded casual dining continue solidly Budget Hotels growing well Ethnic diversity commonplace e.g. Mexican, Thai, Italian, Indian Authenticity and Experience Pubs with little food rapidly declining Workplace and school feeding under pressure Deskilling in the kitchen Emphasis on retail skills in front of house operations Cost Sector under pressure from government austerity Cost Sector increasingly outsourced to Profit Sector Increased use of promotions (2 for 1) and digital marketing Follow USA trends e.g. ‘fast casual’• Key Market drivers Macro economic conditions mean spend stagnating Sophisticated operators at Chain and Wholesale buying points Only 2 national delivered Wholesalers Food price inflation and government taxation policies have greater impact in foodservice Concerns growing about obesity and alcohol abuse
  • 21. Ingredients Embassy of the Republic of  Lithuania to the UKThere is a significant market supplying product manufacturers in the UK.The UK Food processing industry is comprehensive.Ingredients can be for further processing (e.g. a functional ingredient) or acomponent in a finished product (e.g. cooked meat in ready meal).Sales can be direct to producers or via specialist wholesalers/brokers The key aspects are that your ingredient must have a unique attribute: Functionality – process or product Health claim – e.g. sucrolose Price Availability
  • 22. Embassy of the Republic of  Lithuania to the UKHow the Sectors Work
  • 23. How Retailers purchase Embassy of the Republic of  Lithuania to the UK• Multiples – Direct producer relationships – Category buyers, stock controllers and logistic teams – Buyers change very regularly from category to category – Very difficult to get face to face meetings and price changes through – Expected financial product support (promotions, adverts, tastings) – Brand bank listings – Retail ready packaging increasingly a key requirement by all multiples – Starting to specify case sizes: 2 per shelf – Forms, forms and more forms! – Fines for OOS, late delivery, slow ROS – Minimum deliveries: pallets, layers. Some require one product per pallet – Delivery into Central / Regional Distribution Centres – Only direct delivery into store of local / regional lines – Consolidation hubs – Fresh Produce retailer specific plastic re‐usable crates – Chep pallet requirement
  • 24. How Retailers purchase Embassy of the Republic of  Lithuania to the UK• Independents – Fewer staff so buyers often responsible for whole departments – Purchase through delivered wholesalers (saves time & resources) – Or purchase from Cash & Carry outlets – Local / regional products may be purchased direct from manufacturer – New product forms, invoicing and delivery all done through wholesaler – Suppliers may be asked to get their product listed by the preferred wholesaler – May have direct producer relationships with key suppliers – Promotions usually through the trade promotion & price books – Catalogues usually are updated every 2 months (6 per annum) – Crates & packaging often at the suppliers discretion (often not used in store) – Manual re‐ordering procedures (stock replenishment) – Minimum case orders although some wholesalers will sell in singles
  • 25. How Food Service purchases Embassy of the Republic of  Lithuania to the UKCost SectorOften by public tender WholesalersBuying Groups (consortia)Profit SectorDisciplined Chains directly from manufacturerUndisciplined Chains from wholesalersIndependents from wholesalers and Cash & CarriesSpecialist wholesalers (e.g. ethnic, meat, fish,)Buying Groups (consortia)
  • 26. How Food Service purchases Embassy of the Republic of  Lithuania to the UKCost SectorCentralised purchasing in some form.Price is kingBrands irrelevantProfit SectorChains have centralised purchasing Independents can only be reached by wholesalers Brands relevant only if ‘Front of House’Consumers do not welcome Retail brands at restaurant pricesDedicated recipes or products commonConcept food solutions including equipment can be interesting
  • 27. Embassy of the Republic of  Lithuania to the UKMarketing
  • 28. Cost of Retail Marketing Embassy of the Republic of  Lithuania to the UKMultiple trade Listings fees (can be up to £500 per product, although there may be scope for negotiation) Compulsory promotional programme (starting cost £3000 per annum) Advertising spend in their in‐house magazines (once again starts at £1,500) All product images must be on brand bank ‐ £80 per itemIndependent trade New listing advert costs for trade catalogues (10 main trade wholesalers, each one will charge £200 – 500 depending on size of the range) Advertising a promotion in the trade catalogues will cost another £200 ‐ £500 per wholesaler (plus the loss in margin!) If you don’t have in‐house design option will need to pay £50 for ad design costs per wholesaler Each wholesalers will want samples £50 Retailers will often request for sampling events in‐store. Wholefoods for example will charge £100 for a 2 hour sampling session plus the cost of products. You will get a very useful sampling report as part of this cost. Some stores will ask for free fills for the stocking of a new store (1‐2 cases)
  • 29. Embassy of the Republic of Types of promotions Lithuania to the UK• BOGOF ; Buy One Get One Free• 3 for 2 multi‐buys• 2 for £X• % off (normally a minimum of 10%)• Buy one get X half price• Line promos – Natural remedies or baby food• Vouchers ‐ redemption
  • 30. Embassy of the Republic of Waitrose – half price Lithuania to the UK
  • 31. Embassy of the Republic of Tesco – Line promo Lithuania to the UK
  • 32. Embassy of the Republic of Waitrose – Buy 2 for £5 Lithuania to the UK
  • 33. Embassy of the Republic of Tesco – Line promo Lithuania to the UK
  • 34. Embassy of the Republic of Promo communication Lithuania to the UK• Shelf talkers• Banners• Flyers (bag stuffing)• Till receipts• Shop window displays• Product tastings in store• Staff training & involvement (tastings)• Newspaper ads and inserts• Store magazine• A‐frame boards outside the store• Merchandising outside of the store if there is space (on wheels)
  • 35. Embassy of the Republic of Outside store Lithuania to the UK
  • 36. Embassy of the Republic of Shop window Lithuania to the UK
  • 37. Consumer Product Marketing Embassy of the Republic of  Lithuania to the UK• Industry Awards Entry cost for Great Taste Awards & industry awards. Roughly £100 per product per competition. • Competitions Run competitions & offer your product in hampers as prizes (£100)• Sample mail outs Especially to the Grocery teams of those retailers your have listings in they will act as your brand ambassadors (£50 per store)• Attend Trade Shows Natural product show (April) for organic / natural products International Food Exhibition, London (£4000) for a stand BBC Good Food Birmingham• Consumer advertising; Food magazines ( starting from £500 up to £8,000 for an article in Jamie Oliver magazine)• Social Media Sample mail out for foodies to review• PR
  • 38. Foodservice Marketing Embassy of the Republic of  Lithuania to the UKUnbranded products straight forward:• Wholesaler catalogue advertising• Wholesaler support in the field for demonstrations• Promotional support for launch e.g. price discount or value offers• Wholesaler Depot telesales team incentives• Samples• Wholesaler exhibition support
  • 39. Foodservice Marketing Embassy of the Republic of  Lithuania to the UK‘Front of House’ brands materially more difficult and expensive:• Wholesaler catalogue advertising• Menu cards or table talkers• Trade magazine advertising• PR• Trade exhibition presence • Wholesaler support in the field for demonstrations• Promotional support for launch e.g. price discount or value offers• Wholesaler Depot telesales team incentives• Wholesaler Field sales teams incentives• Samples
  • 40. Embassy of the Republic of  Lithuania to the UKBusiness Relationships
  • 41. Retail relationships Embassy of the Republic of  Lithuania to the UKDirect retail relationships• Commercial meetings; Supply issues Annual promo calendar Sales trends / category Sales targets & rebates Gap Analysis / NPD• Store Marketing In‐store tastings; free stock & person Magazine/ leaflets features, Supplier story boards, Shelf edge labels Window displays• Training; DM meetings Product Fayres Supplier visits
  • 42. Embassy of the Republic of WFM Supplier Board Lithuania to the UK
  • 43. Retail relationships Embassy of the Republic of  Lithuania to the UKWholesaler relationships• Commercial meetings; Supply issues Annual promo calendar Sales trends / category / retailer Placement of products in the catalogue Sales targets & rebates New products listings / delists• Marketing Sampling to their top customers Leaflets in with invoices Catalogue front / back cover advertising Product displays at trade / consumer showsNote: Most independent wholesalers do not have telesales teams
  • 44. Foodservice relationships Embassy of the Republic of  Lithuania to the UKThe manufacturer must sell to the Chain end users and the WholesalerThe wholesaler must sell to the independentThe manufacturer must develop simultaneous relationships with Chains and Wholesalers.With Wholesalers relationships are with: Category Buyer Field Sales Managers (independents) Business Development Managers (Chains) Depot Telesales team (Both) Technical and Marketing teamsWith Chains relationships are with: Category Buyer Executive Chef Technical and Marketing teams
  • 45. Supply  Chain Links Embassy of the Republic of  Lithuania to the UKThe UK Food industry has well established efficient logistics systems to get products to consumers. There are differences by sub sector.
  • 46. Supply  Chain Links Embassy of the Republic of  Lithuania to the UKRetailMultiple RetailManufacturer delivers in multiple pallet/container quantities to up to 6RDC’s. Retailer buys at RDC and delivers to shopsIndependent/Speciality RetailManufacturer delivers in pallet quantities to wholesaler/cash & carry depots. Wholesaler buys at depot and delivers to shopsSupply will usually require:• Stock in the UK for deliveries of less than 1 container• Automated link to customer’s ordering system
  • 47. Supply  Chain Links Embassy of the Republic of  Lithuania to the UKFoodserviceCentral DistributionManufacturer delivers in multiple pallet/container quantities to up to 2RDC’s. Logistics company buys at RDC and delivers to restaurantsChains and IndependentsManufacturer delivers in pallet quantities to wholesaler depots (up to35) or to a consolidation centre (1). Wholesaler buys at depot (or delivery from consolidation centre) and delivers to restaurantsSupply will usually require:• Stock in the UK for deliveries of less than 1 container• Payment of consolidation costs by manufacturer• Underwriting of stock at wholesaler until sold
  • 48. Embassy of the Republic of  Lithuania to the UKMargin Expectations
  • 49. Embassy of the Republic of Pricing;  Multiples margin aspirations Lithuania to the UK• It is now illegal to speak to buyers about the setting of recommended retail prices. • Most supermarkets price according to ‘price match’ programmes (• Very difficult to get price increases through – often only possible to have these discussion once a year (in fact sometimes negotiation can last for 8 months!)• Grocery margin expectation is between 35 – 45% (category depending)
  • 50. Embassy of the Republic of Trade margins;  Wholesaler margin aspirations Lithuania to the UK• Wholesalers print Bi‐monthly price catalogues• In these product trade prices are listed as well as recommended retail prices• A wholesaler is given 25% off trade for grocery and 33% for Natural Remedies• Wholesaler may then give their customers discounts and over‐ riders based on agreed target sales volumes (can be up to 20%) & will negotiate similar discount with manufacturer
  • 51. Embassy of the Republic of Pricing; Independent retailer margin aspirations Lithuania to the UK• Nat Rem 50% +, • Ambient 35 – 45%, • Chilled 30 – 35%, • Frozen 35 ‐ 40%, • Food service 50% +• KVI’s pricing; competitor analysis• Value added products; juices, guacamole 85% GM
  • 52. Supply  Chain Margin Expectations Embassy of the Republic of  Lithuania to the UKMultiple RetailRetail Selling Price £2.00Retail Margin (30% to 45%) £0.75Manufacturer Selling Price at RDC £1.25Note: there can be listing fees and overriding discounts and promotional pricing separate to standard pricing.
  • 53. Supply  Chain Margin Expectations Embassy of the Republic of  Lithuania to the UKIndependent/ Speciality RetailManufacturer Selling Price £1.25Wholesaler/cash & carry Margin (25% ‐ 35%) £0.54Wholesaler Price £1.79Retailer Margin (30%) £0.77Retail Selling Price £2.56Note: there can be listing fees and overriding discounts and promotional pricing separate to standard pricing.
  • 54. Supply  Chain Margin Expectations Embassy of the Republic of  Lithuania to the UKFoodservice Independent Chain Central Distribution £ £ £Manufacturer Selling Price 1.00 1.00 1.00Wholesaler/Margin 0.54 0.33Logistics Company cost 0.15Restaurant Buying Price 1.54 1.33 1.15
  • 55. Supply  Chain Margin Expectations Embassy of the Republic of  Lithuania to the UKUK Stock holding logistics costs vary depending on stock rotation but are in the region of:Ambient 7%Frozen 12%(this covers receipt, storage, picking and delivery to RDC/Wholesaler)UK Consolidation costs can be very high 5% ‐ 8%
  • 56. Embassy of the Republic of  Lithuania to the UKBasic Project Entry Requirements
  • 57. There are minimum operating standards Embassy of the Republic of  Lithuania to the UKAll products need to be correctly labelled. This includes ingredients and nutritional informationAll products need 2 barcodes: 1 for the outer and 1 for the retail pack. In Foodservice the outer will need a bar code. For some retailers high volume lines may need a code on the pallet.All products must name the producer or have a UK contact addressAll products must have BBE or Sell by Date on both the outer and inner pack.All products must enter the UK supply chain on UK Chep pallets. This can be done at source or converted in UKProduct packaging must be tamper proofAccurate declarations on weight and protein, fat contentLabels on outers and inner cartons must be in EnglishThere are detailed requirements on product descriptions that must be accurate (e.g. Ham, added water, natural, organic meat content)
  • 58. There are minimum operating standards Embassy of the Republic of  Lithuania to the UKAll major buyers in Retail and Foodservice will insist that:Your factory has BRC/EFSIS approvalYou accept and pay for factory visits and technical auditsYou provide detailed product specifications – even if you consider thiscommercially sensitiveYou sell in GBP sterlingYou adhere to their demanding timetables on supply of samples, pricing, technical questions and attending taste panel dates at shortnotice
  • 59. There are minimum operating standards Embassy of the Republic of  Lithuania to the UKThe UK consumer has specific tastes and concerns both in Retail and Foodservice.Each category has specific issues and your category audit must incorporate these.Here are some examples likely to be unacceptable:• Mechanically Recovered Meat• Cross species meat products• Excess added water• Excess salt (legal limits for schools)• Excess fat• Artificial colourings• Artificial flavourings• Excessive added sugar• Most Offal products• Products to be deep fat fried• Previously frozen product sold as chilled
  • 60. Brand v Own Label  Embassy of the Republic of  Lithuania to the UKThe UK market has a proportion of own label in both Retail (30%) and Foodservice.It may be preferable to develop have control of your own brand but as a new entrant there are risks:• Launch costs will be higher • The retailer might copy your idea and produce an own label• All stocks of product and packaging are your risk• The burden of communicating to the consumer is all yoursThe biggest risks with own label are:• The product is not yours – they own the recipe• Costs are more transparent• Margins are lower• The customer will become very resource demanding
  • 61. Embassy of the Republic of  Lithuania to the UKCategory Analysis and Product Positioning
  • 62. Category analysis  Embassy of the Republic of  Lithuania to the UK“You do not get a second chance to make a first impression!”Market research / Gap analysis: why is it important? • Product differentiation• Resource allocation: time & £• Clarity regarding business strategy & directionWhat should you look for ‐ competition ‐ flavour profiles ‐ price points (lowest to highest) ‐ size ‐ packaging type ‐ USP’sDon’t reinvent the wheel – learn from others
  • 63. e.g. Product Packaging analysis Embassy of the Republic of  Lithuania to the UK• Packaging that stands out on shelf (Why?)• Strong brand to encourage customer loyalty; instant recognition (font, colour, image etc)• Communication of USP’s (does not mean every logo under the sun should be displayed)• Language on pack to reflect target customer• Packaging to suit & protect the product• Packaging; loose, re‐use, recycled or recyclable• Shelf space requirements (units & case size to fit fixtures)• Legal compliance of packaging – meeting EU & local EHO
  • 64. Product Positioning Embassy of the Republic of  Lithuania to the UKUsing detailed category analysis results decide on your brand positioning:Value low margins V high volumeMid rangeLuxury / Premium high margins V low volumes‘Product based pricing’ versus ‘Market based pricing’
  • 65. So you want to come to the UK? Embassy of the Republic of  Lithuania to the UK1. Retail, foodservice, industrial2. Category audit3. Will I adapt products to the UK market?4. Do I understand: 1. Logistics 2. Customer base 3. The consumer5. Do I have financial and technical capacity?6. What UK resources will I have?7. Can I rely on agents/ importers/ distributers?
  • 66. Embassy of the Republic of  Lithuania to the UKReal Life Examples
  • 67. Retail Summary Embassy of the Republic of  Lithuania to the UK• An example of a grocery product concept to launch in the independent retail sector (through a wholesaler) – Product sample tastings in‐house and in focus groups – Category analysis: taste/flavour, size, price, packaging options, USP’s – Packaging design concepts – Drafting of concise but impactful product presenters – Website design to assist with USP communication – Buyer meeting with wholesaler (timings) – Buyer meetings with key retailers (push & pull approach) – Form filling: new line forms, packaging details (weights, size, recyclability) – Launch plan: promotions, tasting events, trade / consumer shows, PR, awards – Staff training in key retailers – Get feedback – Revise strategy if there are major issues highlighted (learn from your mistakes) – Work on line extensions & NPD Above takes an average of 9 months.
  • 68. Real Life Example ‐ Ingredient Embassy of the Republic of  Lithuania to the UKJanuary 2006 US snack ingredient technology shared in JV with Danish producerProduces a pork snack not currently available in EUNew technology utilises existing snack manufacturing equipment2006 UK Launch to snack producers2007 Launch into Spain 2009 Launch into Eastern Europe and Nordic countriesNow a multi £m product with limited price sensitivity
  • 69. Real Life Example ‐ Foodservice Embassy of the Republic of  Lithuania to the UKJune 2010 UK Launch pre cooked frozen pasta1. Product review to establish key features and benefits2. Category audit to identify competitive position, pricing and range3. Build of sales materials4. Appointments with large end users to demonstrate product and establish key competitive advantages5. Listings gained with end users forcing wholesalers to stock6. UK logistics platform in place7. Product launched late 2010 8. Subsequent associated product launches of frozen pre cooked rice
  • 70. Real Life Example ‐ Foodservice Embassy of the Republic of  Lithuania to the UKKey aspects to pre cooked frozen pasta:Product had little direct competition – mainly ambientClear differentiators –no waste, less labour, higher quality consistency, easier menu variation,higher food safetyMain Objections –Price, storage
  • 71. Embassy of the Republic of  Lithuania to the UKQuestions