Supply Matters

A debate about the future of hospitality supply in the post-Covid era by David Read of Prestige Purchasing

This week we have published a White Paper called SUPPLY MATTERS. We want it to signpost a radical new agenda for the supply of food and drink to the Hospitality sector, with the aim of encouraging debate and collaborative action from those involved in the eat-out-of-home market. We feel this is needed because whilst the pandemic has brought our sector to a crisis point, and we must focus therefore on the immediate recovery, there are other risks and opportunities present that require our attention if our sector is to tread a safe path to a more comfortable future.

Hospitality sits at the consumer facing end of a huge and complex value chain. Farmers, Processors, Manufacturers, Wholesalers and Distributors all contribute to the everyday miracle of putting affordable healthy fresh food on every diner’s plate.  In the past year Hospitality has seen around £200m of lost revenues every week, accrued over £2bn of unsettled rent, and over £3bn of CBILS debt. But it’s not just about our operators, the whole value chain has (even without the additional stress of Brexit) paid a very heavy financial price in the past year. Shoring up balance sheets has never been more important – for us all. The whole value chain, from farm to plate requires a quick return to positive cash flow to pay down debt, and to create investment in both assets and jobs. Efficiency and waste elimination is more important now than it has ever been.  

But there are other factors at play. We must react to a potentially greater threat, as our food system is taking a wrecking ball to the planet we all call home. Feeding the world creates up to one third of all greenhouse gas emissions globally, feeds one third of the globe’s grain harvest to animals, and produces two thirds of our global livestock on factory farms. Just 4% of all mammals on the planet still live wild. Change in our food system, of which we are all custodians is overdue, and unavoidable. Our customers are increasingly demanding it, and it is in our own interests to rise to the challenge.

In spite of these great challenges the current landscape really is full of opportunity, and there exists much promise for the future. Many of the tools that we need to transition successfully are at hand or under development.  Science and Technology in food and drink is giving our sector unprecedented numbers of opportunities to innovate.  We simply need to engage and invest - boldly and wisely. Vertical farming, meat substitutes and lab grown meat are just a few of the food tech options now increasingly available to operators, and new software developments in blockchain and cloud computing raise the prospect of more transparent, efficient and joined-up supply chains. 

At Prestige Purchasing, we believe that there are five key themes for change which we have set out in SUPPLY MATTERS – it’s available to download for free from our website www.prestige-purchasing.com/supplymatters.

In summary, these themes are:

One Value Chain - where we need to develop a greater ‘whole-system’ approach to improve resilience and create greater transparency, knowledge and efficiency from farm-to-fork. 

Long-term collaborative relationships - taking a new approach on key supplier selection to more closely align incentives, create longer and more stable relationships, and thereby create increased value over time. 

Smart Supply Chains – by the eliminating the sub-optimal ranging, sourcing and distribution strategies common in our sector, to avoid costly and needless inefficiency. 

Low Waste & Sustainability – improving sourcing to reverse the many undesirable environmental, economic and social outcomes of our food system including the reduction of operational and supply chain waste.

Innovation and New Product Development - embracing the innovation under way in science and technology within food & drink, to enable better outcomes from all of the SUPPLY MATTERS themes. 

We are engaging with key suppliers and operators in the weeks and months ahead, to accelerate the debate on these essential themes for change. Watch out for the interviews that we will be publishing in webcast and podcast formats with CEOs of both suppliers and operators in the weeks ahead. And let us know if you would like to get involved in the conversation - via the prestige-purchasing.com/supply matters web page, or simply by calling me for a chat on 07785 284770. After a year locked away behind laptop screens we urgently need dialogue to create energy and direction for the future.

It’s our strong belief that our supply chains simply cannot afford to return to pre-Covid status quo. Trading our way out of the pandemic looks like a very hard and long road. Instead, we must rely on our ability to innovate and collaborate, finding new and better ways of sustaining the sector we love, and the planet on whom we all depend. 

This is why SUPPLY MATTERS.

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