Market review Market review - Autumn & Winter 2020 Summer 2021 - Fresh Direct
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Market review
Autumn & Winter 2020
Market review
Summer 2021
Contents
Exec Summary 4
Economic Overview 5
Covid 19 Where We Are Now 8
Brexit10
Hospitality Industry Market insights 12
Corporate, Social and
Environmental Responsibility 14
Best of British 18 Raj Tugnait
An Update From Our Buyers 20 CEO, Sysco Speciality Group
Category Overview This latest edition of our Market Review combines We will continue to roll out this convenient
Produce 22 insight and knowledge from across Sysco globally to and efficient service over time.
support our customers to deliver a successful comeback.
Fish & Seafood 36 • We have invested in two state of the art fish
As the hospitality sector reopens, we are seeing and seafood facilities to ensure customers can
Dairy 40
volumes grow significantly each week which is benefit from even better quality, fresher fish
Seasonality Calendar 44 encouraging for the industry. However, our customers and seafood, prepared the way you want it,
are facing many new challenges, such as accurately all from our award winning fishmongers.
predicting the right volumes to purchase in the face of
• We continue to invest in training our colleagues
irregular bookings, no-shows, limited covers and the
and attracting the very best experienced
weather. Finding skilled, experienced and dedicated
foodservice professionals to ensure we serve
team members is also currently extremely difficult.
our customers better. We have already seen
We will do everything we can to support our improvements in operational service levels, and
customers during these challenging times. we will continue to drive further enhancements.
• We are investing heavily to ensure product Many customers are advising us that they are
availability through increasing stock levels, struggling to find enough skilled kitchen staff,
working with our suppliers and staying very due to the current industry-wide skills and
close to what our customers tell us they need. availability shortage. Our Fresh Prep and Fresh
• Caring for our colleagues through the pandemic Kitchen businesses are ideally placed to meet
and increasing staffing in the build up to the re these challenges, with a range of products that
opening is holding up our service levels. However, cover pre-prepared fruit and vegetables, sauces,
the shortage in drivers across the U.K. is a ‘watch pickles and condiments to name but a few.
out’. We will continue to retain and recruit but We are committed to leverage the power of
also need to work proactively with our customers Sysco, to drive consistent product quality, value
to smooth delivery spikes through the week. for money and ensure product availability for
• Labour and transport issues will drive inflation all customers. I would like to assure you that my
however, as the leading fresh foodservice provider in team will continue to work hard on your behalf
the UK and globally, we will continue to exploit our to deliver fresh products and great service.
economies of scale and industry knowledge to keep Thank you for your valued custom and support,
prices down, minimising any essential increases. assuring you of our focus day in day out to ensure you
• We are consolidating orders from our four fresh can focus on running your business smoothly. Wishing
businesses into one single order, making it even you and your teams all the best for the restart.
easier for selected customers to deal with us.
3
Exec Summary
At a glance, the key factors affecting
food prices and availability
Brexit Labour Transport
The economy 20.0% 2020 Unemployment
2020 Average Unemployment (%)
We have managed the transition A shortage of seasonal workers High transport costs (air, sea & road) Overview 15.0
process and mitigated the as many returned home to their continue with the misplacement
challenges faced. Most notably native countries impacting harvests. of shipping containers causing The covid-19 macroeconomic impact has been severe.
friction costs and increased Social distancing restrictions price inflation for sea freight. Most countries suffered a larger economic contraction 10.0
legislation impacting the limited numbers in pack-houses Many haulier companies chose in 2020 than during the global financial crisis of
supply chain into the UK. and on farms. A national rise in to avoid the UK post Brexit. 2009. In addition, the global average decline in GDP
wages increased labour costs. in 2020 was 3.5% in comparison with a 0.1% average
5.0
GDP decline in 2009. Europe was hit harder, with an
average GDP decline of 7.2% and the UK harder still
with a 10% decline in year-on-year GDP. In Europe
0.0
only Spain’s economy was hit harder at 11.1%.
DEU FRA ITA UK ESP
The UK unemployment rate in 2020 hit 4.5% of 3.1% 3.8% 8.5% 9.9% 14.1%
the population. However, the UK figure appears
more promising in comparison to Spain whose 4.0%
unemployment rate was at 15.5%. This is largely
2020 GDP Growth Rate
attributable to the financial stimulus package in the
2020 Real GDP Growth (IMF esitmate)
form of the government furlough scheme equivalent 0.0
to 9% of the UK’s GDP, which subsidised employee
wages and reduced the decline in unemployment.
-4.0
Packaging Ambiguity Hospitality -8.0
The price of plastic and Unknowns with growing seasons The return of UK foodservice and
cardboard have spiked over the and forecasted stock levels have hospitality venues is hugely exciting
-12.0
last year and the UK currently proved challenging in our efforts with many operators opening their DEU FRA ITA UK ESP
faces a shortage of packaging to best serve our customers, doors for the first time in over a year. -5.4% -9.0% -9.2% -10.0% -11.1%
materials, exacerbated due to the maintain supply with our growers
Sources: IMF World Economic Outlook, Fred, Time,
popularity of home delivery. and navigate lockdown measures. Government websites. Global news and journals.
4 5
Labour
Hospitality in 2020 2020 Foodservice sales UK Recent Labour challenges are well documented, For example, recent NFU figures suggest labour
(YoY% change) with social distancing, self-isolation requirements equates to 6.4p per 600g pack of strawberries, up from
UK foodservice sales year on year initially declined 33%
1 and travel disruption all impacting recruitment 2.9p the prior year. This considerable increase in labour
in March 2020 to 89% in April and 85% in May during 0
0 for our UK and overseas suppliers. costs is widespread and affects many categories.
the height of the first wave and lockdown 1.
The National Farmer’s Union (NFU) report suggests An added challenge for our UK growers and suppliers
• Significant decline in hospitality industry
-20 labour issues are attributable to five categories; is the seasonal worker visa, introduced post-Brexit
• Permanent site closures -21 -21 which costs British growers and suppliers £244 per
• Shift in service, away from dine in to takeaway -28 • Worker availability and recruitment
worker. On top of this self-isolation periods for foreign
• Growth of delivery businesses and digital sales -33 • Training
-40 nationals were implemented at a cost of over £1,000
• Accommodation
per worker for a two-week hotel quarantine period.
-47 • Field transport
-55 • Operations The UK minimum living wage increased from
-60
1st April rising 2.2% to £8.91 per hour, with the
£150BN
GVA to UK
£2BN
unsettled rent
threshold reducing from age 25 to 23 years old.
-73
-80
-85
£200M
Lost sales
c£3BN
of CBILS -100
-89
per week debt
2020
Source: Prestige Purchasing, Supply Matters White Paper, 2021 Source: UK office for National Statistics
Exchange Rate
The exchange rate has fluctuated over the past year, despite the pound
reaching a 5-year low against the dollar in March 2020. We continually
monitor the exchange rate closely, taking all necessary actions to minimise
the impact of any fluctuations.
UK Living Wage
£ per hour
£6.08 £6.19 £6.31 £6.50 £6.70 £7.29 £7.50 £7.83 £8.21 £8.72 £8.91
S21 S21
1.145 1.39 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Year
6 7
Covid-19
Where are we now?
The Covid-19 global pandemic had a significant and
sustained impact on the hospitality and foodservice
industries. The UK was placed under an unprecedented
national lockdown in an attempt to reduce the spread
of the virus which saw for the first time in most of
our living memories strict restrictions placed on our
everyday freedom, from March 2020.
Positive signs are emerging as the UK bounces back
from a challenging year with a successful vaccination
program allowing the phased and gradual easing
of restrictions and social distancing measures to be
introduced. The Eat Out to Help Out scheme offered
a glimmer of hope in an otherwise challenging year;
with the pent-up demand for eating out evident.
Subsequent lockdowns in November and December
coincided with national spikes in infection rates. We are
only recently beginning to see what a life post-covid
could look like.
The reopening of outdoor and indoor dining as well
as an easing of social restrictions allows for many
businesses to return for the first time in over a year,
a truly landmark occasion that we have been looking
forward to.
Despite this Covid-19 continues to have a major impact
on all our suppliers and growers, irrespective of where
product is being sourced from. Social distancing
restrictions have impacted numbers of employees
allowed in greenhouses, packhouses and in transport
to and from farms and fields. As a result, there is
less product being picked and processed, putting an
inflated demand on the product that is available. Crop
management has also been challenged due to fewer
people being safely available to work.
For our overseas suppliers, additional lockdowns
and delays in vaccine rollouts continue to provide
challenges across several countries.
For our British growers, a shortage on seasonal labour
as travel restrictions remain will increasingly impact
harvesting during the summer season.
8 9
Brexit
Over the past four years we have kept Brexit high A combination of Brexit and Covid-19 continue to
on our agenda, ensuring that we maintain product impact the supply of fresh produce into the UK. An
supply for our customers, mitigating issues and increase in administration and the costs associated
driving initiatives to deliver a robust product supply with friction charges is driving incremental costs
chain. Throughout the Brexit transition process and to goods imported from the EU, equating to 1.6%
since 1st January 2021 as Britain officially left the cost increase currently. In addition, because of an
EU, we have focussed on securing our future supply increased risk to border delays, groupage services
chain, reconfiguring our logistics solutions and continue to be difficult to secure, with several transport
establishing new procedures. As well as a dedicated companies no longer offering their services to and
in-house project management team, focussed solely from the UK. Freight companies offering this service
on delivering a smooth transition for our customers have increased their cost to serve. We are working
and the business, we have engaged with freight and with our supply partners to ensure any increased
logistics experts, Maritime Cargo Services to allow costs are minimised and product supply is secure.
us to effectively forecast and manage a seamless
As the hospitality industry returns, we expect
transition. Our expertise in this field ensures we remain
import volumes to build significantly and as a
best placed to mitigate any impact which may arise,
result there is the potential for delays at UK ports.
we will continue to monitor and advise any changes,
Our commitment to reduce the impact to our
with the assurance and continuity of supply that you
customers wherever possible remains our primary
should expect from your trusted foodservice provider.
objective. We have developed robust plans and
Additional Compliance Requirements have a solid supply chain, we will continue to work
Following Brexit, additional compliance requirements closely with our growers, suppliers and hauliers
have been gradually rolled out. From October, to to ensure we continue to minimise disruption
fully comply with these new requirements, we, like to supply and stay ahead of developments.
all importers of fresh produce and other plant-based
products must register on DEFRA’s PEACH system. As
a result, we expect to see some low-level disruption
to our usual supply chain cycles due to the availability
of certification authorities in supplying countries. We
are focussed on this development and have mitigation
plans in place to minimise any impact to deliveries.
10 11
Hospitality The future of foodservice: Restaurant Looking ahead: Succeeding in 2021 Next-generation customer experience
industry dynamics & opportunities and beyond • Customer expectations of dining experience are
Industry
continually evolving as they demand more
(Bain & Company, Market Insight, 2021) (Bain & Company, Market Insight, 2021)
• Branded operators must continually review the
This primary research commissioned by Sysco, The hospitality landscape has fundamentally
in-house restaurant customer experience to
highlighted some excellent innovative solutions to changed with innovation, technology and changing
Market Insights pivot business models, adapting their operations consumer dynamics driving future success. Here
meet discerning customers’ expectations.
• Personalisation and menu recommendations
during a challenging year. The restaurants who thrived are some themes that could support hospitality
have become a key feature.
showcased some new and exciting innovative solutions. operators to respond to changing consumer
Over the past year we
demands and bounce back post lockdown.
have worked closely with The 5 areas of growth and best practice in 2020 New places and spaces
• A ‘work from home’ urban exodus will drive
customers, suppliers and • Adapted the menu
Menu variety
• Fresh and health-conscious menu choices. changes in formats and restaurant footprints
research professionals to • Enhanced convenience
• Retail vacancy rates continue to increase allowing
understand the impacts of the • Embraced change • A focus on local and ethically sourced
with reduced packaging. for potential growth opportunity in cities.
pandemic on our industry. • Built digital relationships
• Became part of the solution • Breakfast returns, as does ‘happy Pre-covid consumer trends are back on the agenda
We have been keen to understand hour’ and ‘late night’ dining. • Premiumisation of menus could be an opportunity
Successful hospitality venues cut the size of their core
both the issues and opportunities • New items and new flavours will be in to match an average rise in disposable income.
menu, going back to basics, with a refocus on ‘hero’
presented to customers and demand again. • British / local products with enhanced focus on
products. An increase in drive-thru options and rapid
take learnings that we can home delivery improved safety and provided consumers provenance will be more common on menus.
Home delivery solutions
share with our customers. with frictionless convenience. • A health revolution with the rise in vegetarian and
• Delivery businesses have thrived during
lockdown, many consolidating and taking vegan choices, gut health and mindfulness are key
The rise of online, app-based solutions with enhanced
market share and building new capabilities. development areas for menus, with an increase
offers and a safer digital experience allowed hospitality
focus on both physical and mental health.
to remain relevant despite physical locations being • The partnership between branded operators and
restricted. And finally, we saw local communities’ benefit delivery businesses will be key, particularly with • ‘No prep required’ labour solutions to improve kitchen
from the kindness of proactive support from hospitality regard to the consumers relationship with the brand. efficiency, reduce wastage and increase profitability.
venues, offering food parcels to the most vulnerable and
A ‘green comeback’ from lockdown is forecasted,
giving back in a time when business was tough.
with the importance of meeting environmental
commitments and positively impacting our planet.
12 13
Corporate, Social
& Environmental
Responsibility People
We will care for people by giving back, doing
We are fueled by purpose and are committed to doing
good and changing lives in our communities;
the right thing for our people, our customers, and
creating a diverse, equitable and inclusive work
the planet. Our corporate, social and environmental environment; and empowering our colleagues,
responsibility is focused on three key areas; People, customers and the next generation to make
Products and Planet. healthy choices about lifestyles and diet.
Health & Wellness
Throughout the pandemic our colleagues have
had access to ‘Lifeworks’, our online employee
package providing support on a wide variety of
issues from how to deal with changing restrictions
to advice, mental health support and financial
help. Our ‘Lockdown Learning’ programme has
Plastic
Ethical
standards
also provided a fantastic opportunity for our
colleagues to stay engaged with the business and
improve their knowledge with daily information
reduction and human
rights sessions from market trends to category insight.
Charitable Giving & Community
Carbon
British & We are proud to be part of Sysco’s commitment to
footprint
reduction
provenance supporting communities and have contributed to the
amazing achievement of donating and delivering 50
million meals to those in need over the past year.
During the first lockdown we worked with our sister
business Brakes delivering food packages to vulnerable
Food waste Responsible individuals who were shielded. Our Fresh Direct
reduction sourcing
site in Corby played a huge role in supporting this
achievement. At the peak, the team in Corby were
picking and packing an amazing 1,200 boxes per hour.
Charitable Our partnership with FareShare was industry
Health &
giving and
wellness recognised in 2020 and shortlisted in the Ethical
community
Fair Supply Chain category at the Supply Chain
treatment
for all Excellence Awards. During the pandemic, we
donated more than 200 tonnes of fresh food
to foodbanks such as FareShare and the Felix
Project who converted the donations in to care
packages and meals for those that need it most.
14 15
Product Ethical Standards
We work closely with the Marine Stewardship Council
Planet
We will supply products responsibly by improving (MSC), the Marine Conservation Society UK, Global We will protect the planet by advancing sustainable
animal welfare in the foodservice industry; minimizing Aquaculture Alliance and GlobalGAP. We have a large agriculture practices, reducing our carbon footprint
negative environmental, social or ethical impacts when and growing range of MSC and ASC (Aquaculture and diverting waste from landfill, to protect and
sourcing products; and ensuring that human rights Stewardship Council) accredited fish and seafood, preserve the environment for future generations.
are respected in our operations, as well as the global which will never include MSC rated 5 ’fish to avoid’ and
Carbon Footprint Reduction
supply chain. we will never under any circumstances sell fish on the
We are continuously investing in our vehicle
IUCN’s ‘Red’ list.
Responsible Sourcing fleet, ensuring that our new vehicles meet the
Our supply chain is operated in a safe, responsible and • Winner of MSC Foodservice Wholesaler of the Year latest European emission standards, which
respectful way and we ask that our suppliers share that award for the 3rd year running. reduces harmful pollutants produced.
commitment. By working closely with each supplier, we
• The largest range of sustainable fish & seafood Alongside this we are committed to driving
ensure a more sustainable future in foodservice. Where
available in foodservice down food miles by helping customers to
appropriate, we request our suppliers to be LEAF
consolidate their deliveries across the ranges we
Marque or equivalent accredited and a SEDEX member. British Sourcing
supply. This improves operational efficiencies
Many of our supplier partners are accredited and we
We are committed to supporting and promoting for both parties and drives down food miles.
continue to encourage a greater percentage to support
British products, we have over 100 British growers
our requirements. Plastic Reduction
and suppliers providing the freshest seasonal local
A key priority for us is to remove any packaging
products. As part of our ‘Best of British’ initiative we
that does not offer product protection, shelf-life
will promote in season products all year round.
benefit or support containment of the product. We
are committed to reducing, re-using and recycling
the packaging we use in our business. We actively
encourage our suppliers and customers to do the
same, so it flows down the supply chain and allows
more businesses to make greener choices.
•A
longside our berry supplier, Berry Gardens we have
replaced the use of plastic from our punnets which
are made from Prevented Ocean Plastic. By using this
recycled alternative, we have saved the equivalent
of over 100,000 plastic bottles from our oceans.
•A
ll our lemons, limes & easy peelers come in
home-compostable nets which break down in
a matter of months, removing over 2,000,000
plastic nets per year from our supply chain.
•R
eturnable carrot trays remove over 11
tonnes of cardboard per year and take
3 trucks off the road per week.
•R
emoving plastic liners from our bulk apple
boxes, removing 8 tonnes of plastic per year.
•R
eplacing our fresh fish packaging with recyclable
vacuum pack trays keeping the products fresh and
ending the use of non-recyclable packaging.
16 17
Best of British
Throughout the Spring and lowering our carbon footprint. ethical issues but shape consumer
Summer, we are putting added Reducing the journey from ‘farm choice, who seek out restaurants
emphasis on UK sourcing, to fork’ has health and nutrition that not only offer great food, but
showcasing our British growers benefits as well as enhancing also satisfy consumers consciences.
and suppliers. Our Best of British product quality, allowing our
According to a recent
initiative covers over 100 British customers access to the freshest
Paymentsense report (2020), 66%
farms, fisheries, dairy suppliers, and best products available.
of the population now believe that
bakeries, foragers and local
We take our supplier accreditation ethical considerations matter when
suppliers to showcase British
seriously and request that our choosing where to eat. Just under
heritage, innovation, seasonality,
British produce suppliers are a quarter of us actively seek out
provenance and the environment.
Red Tractor approved and LEAF restaurants that are environmentally
“Choosing British food means accredited. friendly or follow sustainable
enjoying the diverse and delicious practices. This is particularly true
British Provenance is a ‘hot topic’.
food that our varied countryside for diners in London where ethical
There is increasing awareness
and seasonal climate produces… considerations are higher at 39%.
among UK restaurant consumers
Buying British, you play a part
about ethical issues, driven by We believe supporting local
in protecting the environment
programmes such as David producers and promoting British
and enhancing the countryside”
Attenborough’s Blue Planet 2 which is key now more than ever, as
(Source: Love British Food, 2021)
took an unflinching look at the businesses return and begin to
Buying British benefits the effect our use of plastics is having thrive post-Brexit and as covid
environment significantly, reducing on marine life. These programmes restrictions ease.
the road miles of our food and not only increase awareness of
Some of our British growers and suppliers
1. A H Worth 24. De Groot 47. Larry’s Fish Cakes 70. Severn & Wye
2. AB Produce 25. E Park & Sons 48. Leggates 71. Shetland Market
3. Abbey View Produce 26. Extons 49. Len Wrights 72. Shipton Mill
4. J Bennett 27. Firth Fyne Fish LTD 50. Loch Fyne Oysters 73. Speldhurst Sausages
5. Berry Gardens 28. Flatfish LTD 51. Loch Fyne Seafarms 74. Stokes Sauces
52. London Fine Foods Group 75. Stonegate Farmers
6. BFP Eastern LTD 29. Fowey Shellfish Company
7. Bluebell Hill Apiaries 30. Gold Circle Mushrooms 53. Love Handmade Cakes 76. Sun Salads
8. The Blue Sea Food Company 31. A Gomez LTD 54. Miavaig Bay Mussels LTD 77. Tayto
9. Britannia Shellfish LTD 32. Gressingham Foods 55. Midland Fish Company 78. Trafalgar Fisheries
10. Bruce Shellfish 33. H Taylor & Sons 56. Mostell Seafood 79. Tims Dairy
11. Bryans Salads 34. Hammond Produce 57. Naylor Produce 80. Valley Produce
12. BV Dairy 35. Harrogate Water 58. Peloton Produce 81. Weald Smokery
13. Cheesemakers of Canterbury 36. Hartleys Farm Foods 59. Poskitts 82. Wellpak
14. Clarence Court 37. Hodmedods 60. Proper Cornish 83. Westlands
15. Clock House Farm 38. Houghton Springs 61. Lower Reule Farm 84. Whitstable Oyster Trading
16. Colchester Oyster Fishery 39. Jack Fish Company LTD 62. Radnoor Hills Co.
17. Collins LTD 40. Jaines & Son LTD 63. Red Star Growers 85. Wilkins & Sons
18. Conwy Mussels 41. Jonas Seafood 64. Ruby’s Bakery 86. Willowbrook
19. Cornish Shellfish Co. 42. JS Bailey 65. Scottish Salmon Company 87. Wright Brothers
20. Cornish Sea Salt 43. Kames Fish Farming LTD 66. Scrabster Seafood LTD 88. Yew Tree Dairy
21. Dawnfresh Seafood LTD 44. Kent Crisps 67. Seafood 60 North 89. The Yorkshire Lobster
22. Dawndew Salad LTD 45. Kingsdown Water 68. Scrabster Market Company
23. Dorset Shellfish Company 46. Kirwin Brothers 69. Seafood Ecosse 90. Yorvale
18 19Labour The improvements we have made
A combination of Brexit and Covid-19 has reduced
the pool of European seasonal workers within the Network improvements
UK. Additionally, our suppliers across the group have The periods of lockdown have provided an ideal
placed many colleagues on furlough, making contact opportunity to upgrade our depots, creating multi-
and regular communication an added challenge. purpose facilities, strategically positioned throughout
the UK. For example, a £2million investment in our
Bicester HQ, now home to a state-of-the-art M&J
Seafood fishmonger facility puts us firmly ahead in
the foodservice industry with the finest equipment
An update and the largest range of bespoke packaging options
to suit our customers’ diverse needs. Other sites we
from our
have upgraded include Corby, Dagenham & Wigan.
Significant changes to the group procurement
buying team
team’s ways of working have been implemented
with a new category-focussed buying approach.
Richard Walker,
Procurement Director Supplier visits
Without physically being able to visit our suppliers, our
fishermen, our growers & farmers, and their markets,
warehouses and manufacturing facilities to inspect
product quality we have had to rethink our buying
The past year presented us all with challenges Transport
approach. Embracing, like many virtual meeting,
that we did not expect or plan for. Uncertainty A considerable challenge due to Brexit has been the technology and additional quality control procedures.
tested our industry greatly and the businesses reluctance of haulage firms to supply the UK, with many
Our technical teams and quality control checks have
within Sysco Speciality Group were no exception. deciding the increased bureaucracy and possibility
ensured we continue to provide the best quality
However, it also presented a fantastic opportunity of delays is not worth the risk. Another significant
products consistently for our customers and put safety
for reflection, review and a rare chance to rethink challenge faced is the global displacement of shipping
and quality standards at the top of our agenda.
our ways of working, the ranges we offer, and containers. Prices of shipping a container from China
ultimately our proposition to our customers. to the UK spiked at $10,000 recently and currently sit
at $6,000, which is significantly higher than usual. This
Here are some of the challenges we have faced. puts a disproportionally high cost on products such as
garlic and ginger, which are shipped from China, as the
Ambiguity cost of the container must be factored into the price
In an ideal world volume prediction would allow of the product. It is likely to be many more months
for accurate forecasts to be given to our suppliers before these displacement issues are resolved.
and therefore longer-term deals could be signed
guaranteeing supply and securing the best deals Packaging
with a level of certainty. This year however was Raw material costs have been subject to inflationary
anything but and proved particularly difficult to pressures with high-density polyethylene (HDPE)
predict as the UK Hospitality industry experienced used in milk containers, up 75% year-on-year and
waves of lockdowns and limited spikes in trade. low-density polyethylene (LDPE) used in cling film,
carrier bags, condiment bottles etc. up 90% year-
Our biggest challenge was keeping a fine balance
on-year. Cardboard prices have also reached record
between maintaining stock levels and minimising
highs amid e-commerce demand and home-delivery
wastage, which led us to explore alternative
peaking during global lockdown restrictions.
options, from charitable giving, buying and
storing longer life products, increasing our frozen A combination of retendering and reviewing
range, growing our retail customers and entering our packaging solutions across the whole
flexible pricing deals with our suppliers. supply chain aims to protect our businesses
from these inflationary pressures.
20 21Category overview
Key factors affecting
product supply and pricing
Alliums Onions – UK, The Netherlands, Spain
The UK season ended early this year due to retail
Garlic – China & Spain demand and fusarium (fungi) which impacted stock
Due to a severe winter, China lost 30% of its garlic levels in storage. Onions will be imported until the UK
harvest, to mitigate the issue we have forecasted season is expected to start in mid-September, which is
increased stock levels with our UK supplier to maintain slightly later than in previous years.
availability.
Hot weather during the summer leading to extremely
Freight charges remain high and continue to impact wet weather can cause growth of fusarium fungi
the cost of garlic disproportionally. However, shipping and damage onion roots. If this happens, new plant
costs are slowly beginning to reduce, and we expect growth is affected, and onion bulbs may be small and
this to continue in the coming months. immature. In addition, onions infected with fusarium Avocado
Leeks – UK, Egypt & Spain quickly rot in storage, leading to challenges in overall Chile, Columbia, Mexico, Mozambique, Transport & Shipping
supply. We will continue to monitor this situation Peru & South Africa Transport and shipping have been impacted by port
The UK season begins in September and continues
closely with our suppliers. Avocado trees bear fruit every other year. This year’s delays from all areas as a result of post Brexit changes.
until the end of April. During the summer season we
import leeks. Our spring onions are British over the summer season. forecast is expected to be particularly fruitful for supply We have seen increases in the time taken to ship
Land rent has negatively impacted British farming of from Peru and South Africa both seeing good availability. avocados for example, between April to May, 156
Leeks have been severely affected due to the
spring onions and prices are inflated to reflect this. Working closely with our supply partners Greencell, containers were delayed from between 1 to 17 days.
Spanish growing season over the winter being
uncharacteristically cold, causing issues with the crop we have good market insight into the category; As with many produce categories, the past 12
and reducing supply. ‘High rainfall was experienced from the end of January months have seen labour shortages due to national
through February and into March, giving South Africa lockdown measures. This has added impact on the
British land rent price rises increased during 2020
a very wet ‘late’ Summer. This climatic ‘change’ created avocado yield as crops have not been attended to as
and caused one of the UK’s biggest growers to close
a mesic or moist environment with temperatures being much as normal and therefore produced less fruit.
their operation. Demand for leeks was also low as
foodservice remained mostly closed. Both factors generally lower than usual. These conditions had an Sea freight is essential for importing avocados
caused availability issues. To mitigate, we have secured impact on the fruit’s maturity escalation, resulting due to some of the best growing climates being
alternative supply options albeit at inflated prices. in harvesting being far later. South Africa therefore South & Central America. Sea freight costs remain
experienced a generally ‘later’ start than would be volatile impacting price on this category.
otherwise expected – the benefit being more fruit Despite this we work closely with our Constellation
in May onwards to harvest as the fruit has reached group partners across Europe using our combined
maturity and started later in the supply season. buying power to keep prices competitive. Long-
These wetter and mesic conditions have benefitted term supplier partnerships allow for consistent
the orchards hugely, the trees are strong and healthy supply and we continue to work with the second
with low stress levels, the phenomenon from this being largest avocado grower globally to maintain
that the ‘mean’ fruit size this year is far larger than good quality supply for our customers.
usual – peaking at a size 16 whereas in other years
this would be a count 20 peak, a good deal smaller.
The seasons harvest is forecast to be larger than
that of 2020, estimations being 15% larger at 16.5
million 4kg cartons equivalent, the indications are
that the large volumes of the season shall begin to
‘tail-off’ in late July however supply is estimated to
continue (at lower levels) through to September.’
22 23Brassica Cabbage & Spring greens
UK & Spain
Cauliflower - UK
Banana & Pineapple
Our cauliflowers continue to Costa Rica & Panama
May to June sees the changeover Savoy cabbage has not weathered be UK sourced. Supply will be
from produce imported from We continue our long-standing relationship with
well over the winter and this has supplemented when necessary, to
Spanish to British supply. Chiquita, one of the few recognised brands in the
shortened the season. We will ensure we meet demand. The outer
produce market, who work exclusively with Sysco
An increased national minimum import from Europe to maintain leaves effectively protect the flower
Speciality Group in the foodservice sector.
wage cost will continue to affect the supply during this short window, allowing for year-round UK growth.
Brassica category over the summer which will drive inflation in the All of our bananas and pineapples are ‘Class Extra’,
period as will a shortage of labour, category. a premium option which is a class above class 1. In a
Broccoli – UK & Spain recent independent survey, consumers said they prefer
due to a reduction in seasonal Kale is imported until June, when
Like Savoy cabbage, a cold and dry the taste of Chiquita bananas Class Extra by more than
workers caused by Brexit and the the British harvesting season
winter has impacted the growth and 2 to 1 compared to the next leading brand.
pandemic restricting the movement begins. This category also faces
quality of this years’ crop, which In addition to offering excellent quality, Chiquita
of workers. inflation with labour challenges
cannot withstand frost or prolonged control their own supply chain going all the way
Brassicas are a labour-intensive crop having significant impact and low
cold weather as well as other crops back to the farm, as well as running their own fleet of
to harvest, and farmers are moving yield causing a shortage in supply.
in the category. ships into Europe. This not only improves consistency
to other crops to mitigate the added
costs of labour. Therefore, these of supply but also allows for an enhanced focus on
changing market conditions have corporate social and environmental responsibility,
caused a reduction in UK supply. allowing them to proactively support the communities
Despite this the majority of our and environments in which they operate, rivalling the
brassica are grown in the UK during Fairtrade label.
the summer season and we continue
to increase our British range where
possible.
Sysco Speciality Group have gained Extra Class Bananas
a competitive advantage through
the consolidation of growers and
longer-term supply agreements
being completed early. Lincolnshire Less peel blemishes
remains our main grower location Smaller tolerance on grading
and we continue to explore all
alternatives to provide availability,
quality and consistency.
Less latex scarring
24 25Berries
Thirty years ago, the British strawberry
season typically lasted about six weeks. Our
berry supplier Berry Gardens use glasshouse
grown berries to extend the season, with
British berries now available up to forty-two
weeks of the year.
Strawberries - UK
We proudly work with the finest growers and
Strawberries are labour
industry experts to continually innovate and
intensive and as other
lead the way in sustainable technology within
categories, are not immune to
foodservice.
the labour challenges the UK
This summer the launch of a new sustainable growers are facing this year
punnet in the Sysco Speciality Group supply
chain, made using Prevented Ocean Plastic™
will remove the equivalent of 250,000 plastic
bottles from our oceans.
Prevented Ocean Plastic™, supplied by
Bantam Materials, to Sharpak, Aylesham and
certified by OceanCycle, refers to plastic
bottles that are collected from the shoreline
before being responsibly converted into
high quality raw material. Found within a
50km (30mi) distance of an ocean coastline
or major waterway, any plastic waste left
uncollected would end up as ocean pollution.
Further environmentally friendly innovation
to make the berry punnets fully recyclable
are being trialled and we will be the first
foodservice supplier to use this new
technology. Blackberries &
This year we are also pleased to offer Raspberries - UK
premium Driscoll varieties, widely regarded These categories are both
as the finest berries available and known for sourced in the UK for the
their high quality and flavour profile. summer season.
New sustainable
punnet, removes the
equivalent of 250,000
plastic bottles from
our oceans.
26 27Citrus Melon Grapes Exotic Produce Asparagus & Tenderstem Broccoli
UK, Kenya, Mexico, Peru & Spain
Beans – UK, Kenya & Morocco
Orange – Egypt, Morocco & Spain Spain Italy, Morocco & Spain Our beans are grown in the UK
The exotics category consists of Both asparagus and tenderstem over the summer season, reducing
We have seen a rise in growers Due to pandemic restrictions and It has been a strong season for asparagus, beans, mango, root broccoli pricing have benefited transport costs.
moving away from smaller fruits limited hospitality venues open, grapes with harvest producing high ginger, chili pepper and tenderstem from the British focus. We source Chili Pepper – Thailand & The
and easy peelers to premium the melon market is in decline. yields and new generation cultivars broccoli. these products directly from the Netherlands
varieties of oranges to help An increase in retail sales have coming into full production.
This category has been affected by grower to give us more control of
boost their business following not made up for the loss in total During summer, our grapes will Exotic chillies are still under
the reduction in air freight capacity both the supply chain and price.
a challenging year. Growers are sales as we have seen with other be sourced from Mediterranean pressure with significant increases
since the outbreak of the Covid-19
actively trying to help the industry categories. countries, however there are still of over 30% due to less frequent
pandemic, which has led large
recover over the summer. Additional sourcing from South challenges in these countries. flights from South East Asia.
category-wide price increases.
Lemon & Lime – Brazil, Guatemala, American growers has helped to Social distancing during harvests Root Ginger – China
The price of these products is further
Mexico, South Africa & Spain off-set a spike in costs caused by is slowing down production, and China remains the biggest producer
compounded by the challenges
Southern Hemisphere countries melon supply moving to Spain. additional Brexit paperwork and of root ginger in the world, with
surrounding labour movements and
growing lemons are still badly friction charges are impacting supply and price negatively
shortages in the producing countries
affected by Covid-19, the effects are prices. affected by Covid-19. A reduction
caused by Covid-19.
evident through the supply chain, We are exploring opportunities in air freight causes higher prices
To guarantee continued availability
with increased freight costs being with Moroccan growers, who are to transport produce from Asia to
of imported products we have used
one of the biggest challenges. investing in growing premium black the UK and adds a disproportional
air freight at significantly higher
Our lemons & limes are packaged varieties of grape, specifically for increase to the price of the affected
costs than usual which is having a
in recyclable home-compostable the UK and German market. categories.
significant cost impact on the unit
netting a first for foodservice in price of these products.
the UK, removing 2 million non-
To mitigate transport costs a
recyclable nets per year from our
stronger emphasis on British supply
supply chain.
has been implemented.
28 29Lettuce
Produce that has moved to UK supply for the summer is subject
to a slight price increase due to social distancing challenges and
reduction in availability of labour.
Lettuce and leaf are picked, packed, palletised and delivered
within 4 days to maintain optimum freshness. This means the
category is volatile due to its short shelf life and is more labour
intensive than some categories.
Prices remain flat for baby leaf as the summer season begins,
despite post-Brexit challenges.
Celery
Reduction in herbicide usage, whilst a positive environmental
achievement, does mean a price increase to compensate for
the harvest quantity and availability of the crop. Covid-19 social
distancing restrictions in supplier packhouses continue to impact
celery pricing.
Mushrooms In 2020, as part of our commitment
to ensure we enable the recycling of
Ireland, The Netherlands, Poland & UK product packaging wherever possible, we
transitioned from black plastic rigid trays
Portobello mushrooms continue to
that are not commercially recyclable to
be sourced from the UK. The UK is
blue plastic containers that are widely
heavily reliant on Polish, Dutch and Irish
recyclable, bringing down our carbon
mushroom imports in order to meet
footprint.
demand. The majority of our mushrooms
are currently sourced from Poland and In addition, this year we have worked
The Netherlands with flat mushrooms closely with our supply partners to
predominantly from Ireland. introduce rPET punnets, which are made
from a minimum 80% recycled plastic.
Mushroom pricing has been heavily
rPET punnets use up to 50% less energy
affected by post-Brexit friction costs, and
to produce than standard PET.
transport challenges. We are working
closely with our European suppliers to
mitigate these risks, supporting them to
create their own logistics group to give
greater control of the supply chain.
30 31Potato & Root Vegetables Carrots & Parsnips – UK
Our British growers cover the length and breadth of
Potatoes - UK the UK from Suffolk to Scotland. This season there
Our potatoes are sourced from the UK. Typically, early are two main challenges in the root category;
season potatoes are grown in Cornwall, Norfolk and •U
nfavorable growing conditions over the
Suffolk and Heritage potatoes from Northumberland. winter put large carrots under pressure
We are seeing a consistent downward trend in British to produce a plentiful crop.
potato production as seen in the graph below. •A
n overcommitment to retail supply
Prices however remain stable due to long-term contracts increased pressure on growers
partnerships with growers and good stock levels to fulfil supply programmes.
at supplier facilities. Potatoes are less affected by These have prevented crops having sufficient
labour costs compared with other categories. The time to grow and stock levels to replenish and as
new season starts towards the end of summer and a result UK stock levels have been exhausted.
good availability is expected until this point.
UK Potato planting Year-on-Year
145
140 x
135
x x x x
Thousand Hectacres
130 x
x x
x
125 x
x x x
x x 121.7 x
120
x x
x
x
115 115.6
x
110
106.7 x
105
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
x Area Kha Linear (Area Kha)
Source: Agriculture and Horticulture Development Board, 2021.
32 33Protected salad crops Top Fruit Aubergine, Cucumber, Pepper, Tomato Apples Morocco, The Netherlands, Spain & UK Following a bumper crop in 2018, apple harvest volumes This category has been significantly impacted by labour have declined year-on-year. 2021 volume is expected challenges, with social distancing in packhouses adding to be over 20% down since 2018. The forecast for 2021 cost pressures. Being a labour-intensive category, looks poor with very late frosts and French farmers less workers tending to crops has impacted yield. reporting icicles on apple blossom. Most of our tomatoes will again be Dutch this season. To compound the reduced volumes harvested, Covid-19 Dutch tomatoes are competitively priced against has impacted harvests with local lockdowns and travel UK producers who do not currently grow enough restrictions reducing the supply of seasonal workers. tomatoes to satisfy British consumer demand. As well as increased sea freight charges and social Both cucumber and pepper availability are reducing distancing regulations causing additional complications. as growers prioritise tomatoes. To mitigate supply Apples can maintain their quality for up to a year if concerns, we have increased our British sourcing stored at 2 degrees centigrade, depending on the of peppers, with 50% of our volume coming quality of the fruit, which this season is forecasted to be from the UK during the growing season. Our challenged as a result of growing conditions. courgettes are also now partially British sourced. We have continued to consolidate our supplier base and are working on a wide variety of supply models including split supply to manage risk. 34 35
Fish & seafood
Sustainable fishing practices Post-Brexit & COVID-19 than in typical years due to a
Our speciality seafood business, Related Challenges significant reduction in demand.
M&J Seafood, has been serving Our UK suppliers have seen As the foodservice and hospitality
the hospitality industry for over increased challenges as additional industries reopen there is the
40 years. Sustainable fishing legislation is enforced post-Brexit, potential for a surge in demand
practices has been a key focus causing uncertainty. It has been which may impact pricing.
for the business from the start, well documented that agreement The fish & seafood category is
here are a few examples of our on fishing areas and share of the particularly volatile and as such
commitment to sustainability; quota have been a contentious we will continue our monthly
Winners of the Marine issue between the UK government pricing files and communication
Stewardship Council (MSC) and the EU. In addition, the UK to our customers, so a fair
foodservice wholesaler of the and Norway have failed to reach a market price can be applied.
year, 3 years in a row - 2018, deal over the allocation of fishing
Packaging innovation
2019 & 2020. Showcasing our waters in the North Sea, causing
We have been investing in our M&J
commitments to protecting fish uncertainty on fishing rights for
seafood sites during lockdown,
stocks for future generations. the area. However, this is not
ensuring our award-winning
likely to impact our supply.
For 15 years we have produced fishmongers have state of the art
a ‘red-list’ in line with Marine CGA category inflation data,
facilities to continue to fillet fresh
Conservation Society (MCS) November 2020 reports overall
fish to our customers bespoke
guidance, to protect endangered fish pricing to be down 6.3% year-
requirements. We have also invested
species, and we back this on-year. This is in part due to the
in new packaging facilities, enabling
up with our commitment to closure in hospitality and a general
us to offer bespoke filleted fresh
never sell 5* rated fish. reduction in fish consumption in
fish in environmentally friendly,
the UK as a direct result of the
We stock the largest range of non-drip packaging solutions.
pandemic. There are however
sustainable fish and seafood Please speak to your account
significant factors to watch out for
in the foodservice industry. manager to find out more details.
with seasonal quotas not being
met and less fish being spawned Salmon – UK, Iceland, Faroe Islands Scallops – UK & USA Whitefish – UK, Iceland, Norway &
& Norway Both chilled and frozen scallops Greenland
In 2020, supply exceeded demand face price inflation due to an Cod and Haddock are bought
globally, leaving additional increase of 8% trade tariffs and from multiple sources across the
availability of salmon in the market. additional customs clearance costs globe and are therefore subject
Salmon is farmed and the typical introduced post-Brexit. Market to different market moves. Annual
life cycle is 18 months. Over the demand as hospitality reopens quotas, which are set in late
past year salmon farmers have in the UK mean inventories are September to early October to
been cautious to add new stock currently low. Working directly ensure the sustainability of stock
during a period of uncertainty and with the supplier and fixed pricing levels for the future, have not been
as such salmon prices are expected agreements allows M&J Seafood to met this year. However, we do not
to fluctuate as supply and demand mitigate supply issues and ensures envisage this having an impact on
begin to even out towards the end greater control of the supply chain. our supply. Longer term contracts
of the year. continue to be explored reducing
concerns of stock availability.
36 37Best of British
We have a strong British sourced
range for the summer season
with some excellent varieties all
sourced from the UK; Monkfish,
Mackerel, Clams, Crab, Dover
Sole and Plaice are just some of
the excellent options available.
Our skippers are providing our
expert fishmongers with the
finest freshest fish allowing for
provenance stories
on your menus.
1. J Bennett
2. BFP Eastern LTD
3. The Blue Sea Food Company
4. Britannia Shellfish LTD
5. Bruce Shellfish
6. Colchester Oyster Fishery
7. Collins LTD
8. Conwy Mussels
9. Cornish Shellfish Co.
10. Dawnfresh Seafoods LTD
11. Dorset Shellfish Company
12. Firth Fyne Fish LTD
13. Flatfish LTD
14. Fowey Shellfish Company
15. Houghton Springs Fish Farm
16. Jack Fish Company LTD
17. Jaines & Son LTD
Tuna – Sri Lanka, India, Oman, Sea bass & Sea bream – UK, Greece 18. Jonas Seafood
Chile & Spain & Turkey 19. Kames Fish Farming LTD
We buy our tuna from multiple Availability for 300-600g sea 20. Kirwin Brothers
markets varying throughout the year bass and sea bream fillets is under 21. Larry’s Fish Cakes
depending on availability and price. pressure. These sizes are the
22. Loch Fyne Oysters
Our two most popular categories most popular within foodservice. 23. Loch Fyne Seafarms LTD
are Yellowfin and Bigeye which are Due to recent reduced demand
24. London Fine Foods Group
both found mainly in the tropics. and less fishing, fish have been 25. Miavaig Bay Mussels LTD
Subsequently tuna is susceptible to feeding for longer and the size 26. Midland Fish Company
monsoon climates between June of fish being caught currently are 27. Mostell Seafood
to October. This seasonal weather larger. Therefore, larger sizes are 28. Scottish Salmon Company
cycle typically affects availability and more readily available with pricing 29. Scrabster Seafood LTD
leads to seasonal prices increases. remaining stable. 30. Seafood 60 North
In addition, 30% of the Yellowfin
31. Seafood Ecosse
market is caught around India, which
32. Severn & Wye
is an ongoing concern due to the
33. Shetland Market
current impact of Covid-19. The
34. Trafalgar Fisheries
reduction of available air freight due
35. Whitstable Oyster Trading Co.
to fewer flights as a result of the
36. Wild Harbour Fish Company
pandemic is also having a significant
37. Wright Brothers
impact on the cost of this product.
38. The Yorkshire Lobster Company
38 39Dairy
Crème fraiche, Yoghurt, Milk, The delivered cost of milk is also UK farmers are also seeing a
Clotted cream, Buttermilk, increasing due to the severe cost two-fold negative squeeze in
Cream & Sour cream are all increase in plastic. As part of a their bottom lines. Firstly, there
sourced from the UK mitigating business wide packaging review, we is a squeeze on returns from
supply risk post-Brexit and are exploring alternative solutions cream exports to the EU due to
supporting our local farmers. for a safe, fresh milk container. increased complexity, and secondly,
The Sysco Speciality Group milk & As the foodservice and hospitality some farmers are having to use
cream supply deal is based on the industries return there is increased winter feed stocks due to poor
industry standardised Farmgate competition for milk as cheese weather conditions, which is
costing model. Since the middle processors increase their demand, increasingly costly as feed costs
of 2020 the UK has experienced particularly for Cheddar, Mozzarella have also risen over the last year.
consistent growth in farmgate costs and Monterey Jack. This is causing
and therefore; delivered cost of rises in the farmgate cost of liquid
milk. There is a further farmgate milk for Cheese processors and
cost increase in June 2021 from causing further competition between
our supplier, Yew Tree Dairy which processors for liquid milk supply,
continues this upward trend. further encouraging farmgate
costs upwards as demand spirals.
Cheese
Butter – UK Eggs All eggs supplied by Fresh Direct,
Protected Designation of Origin
The restrictions placed on the Liquid & Shell eggs - UK including liquid egg, are now
(PDO) classification has been
hospitality industry during free range. With all egg products
awarded to Halloumi, with strict This winter the UK was impacted by
lockdown created a surplus of supplied across the group being
ruling around profile, flavour, one of the largest waves of avian
butter from the summer of 2020, British Lion standard, showcasing
proportion of ingredients and influenza, resulting in a ‘chicken
however overstocked positions our commitment to animal welfare
origin of milk used, which has lockdown’ and a subsequent rise
have reversed, and demand is and quality products.
the potential to cause huge in prices across the category. All
rising, creating an increase in price domestic birds in the UK were put In addition, all our eggs are UK
ramifications in supply and
as the foodservice industry re- into lockdown from early December sourced, allowing for freshness
availability. Whilst additional legal
opens. Erratic price fluctuation is to late March, including free range and quality to be prioritised
protection will benefit Cypriot
expected to continue until the stock birds – which were housed for whilst road miles are kept to a
farmers and processors, the price
position stabilises. the whole of this period. Despite minimum, positively impacting the
of the product would be impacted
this, through long-term supplier environmental sustainability of our
by premiumisation and the supply
partnerships we have maintained supply chain.
may decrease. To mitigate this, we
are continuing to explore alternative our pricing. Fresh Direct also dual We have reduced road miles on
supply options. sources shell egg to help protect liquid egg products by around
against geographically specific 100,000 miles per year with moving
Mozzarella, Cheddar, Monterrey
outbreaks of Avian Influenza, to UK supply on liquid egg.
Jack – UK & Ireland
ensuring supply security. To supplement our range, we offer
Goats Cheese – Spain
Clarence Court products, from quail
Brie, Camembert – France
to Burford Brown eggs, a premium
Parmigiano, Grana – Italy offer in the category.
Halloumi – Cyprus
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