Alliance targets UK food service
Alliance Group has launched a pilot programme in UK targeting high-end restaurants and hotels in a bid to generate more revenue. Tony Benny reports.
Food service is growing globally while traditional retail outlets in many markets are stagnating and marketers often talk of the need for producers to shift their focus to this growth sector. Now Alliance has established a four-person team in the UK tasked with making direct connections to top chefs and building new distribution channels.
"Historically a lot of New Zealand lamb has gone into wholesale in some form and can go through three or four sets of hands before it gets to the end customer and often the end customer doesn't know where their lamb's coming from," says Alliance director of food service Graham Bougen, who heads the team in UK.
"We believe we can add more value by selling direct to customers to ensure they're getting the right cuts in the right form and the right quality and by doing that, returning greater profits to New Zealand farmers."
The move is part of the strategy overseen by Alliance CEO David Surveyor since his appointment two years ago.
"We're looking very much at the cost of our business but the other side is how do we generate more revenue and market value," says Alliance general manager of sales Murray Brown.
"That's the simple strategy but now we have to execute and we're going into a second phase and focusing on the market. Food service is one of many opportunities that we're looking at."
The pilot in UK has been running a couple of months and Alliance intend to extend it to Europe and possibly Asia too. As well as Bougen, the team includes two sales staff and a marketing manager.
The food service industry is quite relationship-based, says Bougen. Typically a company will have two main contacts, an executive chef and a head of purchasing, and it's them the UK pilot team are trying to build relationships with.
"The approach we're taking is to really understand their business well so we can look to add value beyond just giving them a piece of meat at a price. That's understanding what support we can give them in terms of innovation of product, traceability back to the farm, technical standards and marketing support."
Consistency of quality and supply are basics that must be achieved as a right "to play in the game" and then it's about differentiating New Zealand product from the competition, ensuring its quality is recognised.
Bougen says New Zealand lamb has come a long way in the past 20 years but UK chefs need to be told about that.
"There are a probably a number of chefs who've used New Zealand lamb but they haven't been aware of it and it's just helping them understand the differences to UK lamb.
"All the feedback to date from all the customers has been really fantastic so it is quite promising."
As well as making connections with key personnel in restaurants and hotels, new distribution channels are being developed and new products are being trialled.
"Chefs, like everybody, they're time-poor," says Brown. "They want to have a product they can cook straight away instead of having to do more and more preparation."
The pilot has been set up partly to prove the business case and also to identify any fishhooks, to ensure there's nothing that hasn't been thought of that undermines its success.
"There're a lot of new processes to get established. Once we're comfortable that everything's working in New Zealand and over here, then we'll start to roll out to other geographies as well," Bougen says.
Already food service options and contacts are being explored in Europe. Brown says the project could start a change in the way Alliance does business, although there's no thought of withdrawing from traditional markets.
"Next year could be quite a game changer for us in terms of the way we design our sales teams in-market, the way we design some of the specialised product forms, because they sometimes need slightly different packaging, and distribution logistics in some of the markets."
Before taking this role, Bougen who grew up on a King Country sheep and beef farm and was a structural engineer before becoming a management consultant, assisted with the development of Alliance's overall strategy.
"This project is hugely important, it's one of the most important things for the future of the business," he says.
"Food service globally is in growth while retail is holding or stagnating so it's really important that we're able to sell to directly to those end customers to ensure we can maximise value for those customers and for our farmers."