Who's who IN TEMPERATURE-CONTROLLED LOGISTICS - Global Cold Chain News
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Who’s who
IN TEMPERATURE-CONTROLLED LOGISTICS
A guide to major players in the UK temperature-controlled industry including own
account operators, logistics providers, body and trailer builders, van converters
and truck refrigeration equipment suppliers
Prepared by
Who’s who in temperature-controlled logistics
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/2
Who’s who in temperature-controlled logistics Contents 4 Executive summary 5-6 Size and shape of industry 7-10 Logistics providers 11-14 Top 25 Logistics providers 15-19 Own account operators 20-22 Coldstore operators 23-24 Investment and consolidation 26-29 Courier services 30-32 Brexit 33-36 Van converters 37 Trailer and body builders 38 Refrigeration manufacturers 39 About the publisher /3
Who’s who in temperature-controlled logistics
Executive Summary
This report sets out the size and scale of the British
temperature-controlled transport, logistics and storage market,
listing the top logistics providers, own account operators, cold
store operators and other specialist suppliers to the industry
for vehicles, plant and equipment.
The report is prepared by Cold Chain News and its website, Global Cold Chain News,
the UK’s leading business-to-business magazine and website for the sector, and
draws on extensive research carried out by the magazine, with contributions from
companies in the sector as well as other published sources of information including
government sources such as the DVLA, Department for Transport, Companies
House, and VOSA.
The information has been collected between January
and December 2018.
/4Who’s who in temperature-controlled logistics Size and Shape of the industry The United Kingdom is one of the top markets for Europe's cold chain industry in terms of storage space, which is 24 million cubic metres in 2018. The massive food and drinks segment continues to dominate the cold chain industry, but in recent times, there has been an exponential growth in the pharmaceutical sector, with the emergence of various significantly sized refrigerated pharmaceutical transport logistics companies. For example, Gefco Group opened its life sciences and healthcare dedicated temperature-controlled warehouse in the United Kingdom in January 2017. The new 1,400 square metre warehouse facility is expected to expand its presence in the UK healthcare sector. Food accounts for 17% of goods lifted in the UK by weight1 and it is the principal commodity for temperature-controlled transport in Britain. The large supermarkets contract much of their logistics to third party suppliers but also handle large volumes using their own vehicles. Logistics accounts for a major share of the costs incurred in the supply and retail of food products. Many food products are perishable and require continuous cooling for preservation. The energy consumed to maintain the right temperature has significant cost implications, leading to outsourcing of logistics by companies seeking more efficient storage and transport. Greater automation of warehousing and handling is contributing to the growth of the overall storage and transport space. The top five logistics providers in the UK alone operate over half a million square metres of cold storage. Total refrigerated storage capacity in the EU is some 60 million cubic metres. The principal method of transport in Britain is a refrigerated 13.5 metre trailer, the largest allowed under current regulations. These refrigerated trailers account for some 15% of the total trailer fleet on the roads2. Urban deliveries to smaller retail outlets and food outlets usually entails smaller vehicles – typically 18 and 7.5 tonners, with home delivery, also temperature controlled, mainly handled by 3.5 tonne vans. New legislation governing the storage and transport of chilled and frozen foods has meant a big increase in the demand for refrigerated vehicles. This demand is not only for more vehicles, but also for a greater range of types and sizes to suit a host of new applications. As a result, there are now more bodybuilders becoming involved in the construction of refrigerated vehicles, and those traditionally involved are facing new challenges posed by unfamiliar types of vehicle. Refrigeration is provided mainly by diesel engine powered fridges although there is growing demand for diesel-free alternatives, especially for urban deliveries. /5
Who’s who in temperature-controlled logistics
There is also growing use of all-electric refrigeration systems taking power from
a truck engine powered alternator. The truck engine meets far more stringent
emissions regulations than does the fridge diesel engine so such vehicles have an
environmental benefit. Chiiled prepared food, rather than frozen prepared food,
accounts for a large proportion of UK food sales so multi-compartment vehicles,
capable of carrying frozen and chilled, and also ambient temperature goods are
prevalent in the UK unlike the continent which has a much higher proportion of
frozen food sales and where single-temperature vehicles are the norm.
The ability and demand to capture and analyse huge amounts of data as goods
travel through supply chains will continue. Big data allows predictive analytics,
now essential in developing supply chain strategies, to improve the effectiveness
and efficiency of processes. It is how supply chain networks will meet the need to
become more resilient and reliable in the coming year, in order to better manage
more volatile demand as well as pressures on margins.
The green movement will continue to challenge the road transport industry.
The UK government is committed to reducing carbon emissions and the pressure
on business to deliver will only intensify. While low-carbon initiatives have been,
for many transport providers, nothing but a box-ticking exercise this ‘business as
usual’ approach is changing. Reducing carbon reduces cost, which stands to reason:
you use less resource and less energy. Innovation and the use of new technologies
will become more commonplace as temperature-controlled transport operators
strive to deliver low-carbon solutions.
Brexit threatens a huge upheaval in existing
distribution patterns and potentially threatens
enormous upheaval in key segments, like the food
industry, as well as the logistics industry.
With around 30% of food imports coming from the European Union and almost
a fifth of food and drink exports heading to Ireland, closed borders are expected
to have a negative effect. Additionally, Brexit is expected to create labour shortages,
(there are already shortages of truck drivers and warehouse staff in the UK),
and create new challenges around border controls.
1
Department for Transport
2
Department for Transport
/6Who’s who in temperature-controlled logistics Logistics Providers This report uses the Cold Chain News Top 25 listing for 2018 which shows a steady growth in turnover of the top companies. There is no change in the top eight positions, all retained by the same companies in the same order in the previous three years. But there have been some spectacular rises in turnover as a result of acquisitions: NFT’s turnover was up 27% to £202.2m, partially as a result of its purchase of NR Evans. However, EBITDA was down from £7.5m to £6.5m, which the company said reflected continued investment in the business to increase its capacity to facilitate future growth. Loss before interest and tax for the year was reported at £4.3 million compared to a loss of £13.4 million the year before. Heath Zarin, chairman of NFT and managing director of EmergeVest (NFT’s owner), said: “We are pleased with the progress made during financial year 2017, which positions us well to achieve our strategic objectives. We have gained further momentum in financial year 2018 and look forward to exciting announcements in the near-term.” The company said it made significant progress on its multi-year strategic plan; achieving record revenue; completing the acquisition of NR Evans Holdings in July 2016; increasing activity levels at the new multi-temperature logistics facility at the Port of Tilbury; and winning significant new business. Culina and Turners – both in the top five ranking – reported turnover up 14% with Yearsley close behind with an 11% increase. Fowler Welch was up 13% to £163m. Fowler Welch gained volumes from its Dairy Crest operation at Nuneaton, which commenced in June 2016, while the operations at Teynham and Heywood also saw new volumes come on line, Philip Meeson, executive chairman, said in a statement. Reed Boardall, one of the few single site operators, saw turnover down 6% to £60.2m and profit slump 80% to £840,646 (2016: £4.2m) in the financial year to end March 2017. The company blamed the fall on an “exceptionally busy” Christmas. In the previous financial year ending March 2016 turnover fell slightly to £64.3m from £65.9m due to a contract loss mid 2015. Among those companies with turnover under £50m, Chiltern Cold Storage produced the best performance with a 28% increase in turnover to £28m. Other good performances were from McCulla Ireland with turnover up 20% to £23m and Buffaload up 13% to £19m. /7
Who’s who in temperature-controlled logistics A relative newcomer, but fast growing is NewCold, a frozen warehousing and distribution service provider. In 2015 NewCold made its first foray into the UK, opening an ambitious, highly automated, 40m-high cold storage plant on a green field site in Wakefield, Yorkshire. The coldstore is combined with an expanding in-house transport operation, consisting of 48 trailers and 36 tractors, including double-deck trailers to minimise food miles and emissions. It reported a 33% increase in turnover to £16m. New Cold operates frozen cold stores in the UK, France, Germany and Poland. The temperature-controlled market in the UK remains in good health with talk of expansion, investment, and acquisition. However, concerns remain about continuing price pressures with increases in turnover not being matched by profit increases. And there is still the huge uncertainty that Brexit will have on the industry which as yet is nowhere near quantifiable. Other trends to watch out for are more joint ventures such as Culina’s partnership with Irish chilled and frozen distribution firm Morgan McLernon and Oakland’s partnership with Spanish company Carbó to open European trade corridors for producers. It seems a certainty that consolidation among the larger players, long a feature of the road transport sector, will intensify. UK temperature-controlled operators remain bullish about the market despite growing evidence that the UK economy is under performing. Key economic indicators for the UK economy show that it slowed to a virtual standstill in the first three months of 2018, the weakest period of activity in more than five years. UK truck sales, which are an accurate barometer, providing early warning of economic performance, have fallen for the third consecutive quarter.3 Government figures show retail sales, including food, in the three months to March 2018 down by 0.5%. Data from the OECD shows inward investment into Britain slumped by $181bn over the last year; outward investment has boomed by $120bn, one of the biggest one-year turnarounds by any country ever recorded. Yet the road transport sector is remarkably optimistic about business growth. The majority of UK fleets predict business will grow next year in spite of challenges including Brexit, new environmental legislation and driver shortages, says research published by Asset Alliance Group.4 The Top 25 survey of temperature-controlled operators sees a similar optimism with operators bullish about growth despite ongoing concerns about Brexit and the potential effects on the supply chain. The managing director of Armoric Freight International is just one logistics professional who believes that Brexit is a huge unknown for the supply chain sector. Marc Payne said: “Brexit remains a challenge for the future, but until we know the final outcome of negotiations with the European Union it is difficult to predict what effects the outcome may have on our business.” /8
Who’s who in temperature-controlled logistics NV Transport managing director Steven Zwinkels also has concerns about the future. “Border control will be the next big issue to deal with as to what procedures need to be followed with goods coming into ports and how that affects the supply chain.” Overall, though, most temperature-controlled operators feel positive about business performance. Oakland International’s managing director Shaun Foley said: “The market has been tough with a lot of uncertainty over Brexit creating nervousness amongst our overseas clients but this appears to have settled down.” Turners of Soham predicts continued growth. Stephen Blackmore, from Turners’ transport department, said: “The business focus remains the same as in previous years, with growth through the acquisitions and from within our existing customer base.” Some companies saw their plans come to fruition this year. For Yearsley Logistics this means the completion of its £65m investment in Peterborough, SuperHub South. Other companies with big plans for 2018 include Virginia Transport, NewCold and Dale Brothers. Virginia Transport’s managing director Ray Cole said the company was opening a new 4,645sq metre warehouse in Kells, County Meath. NewCold Advanced Cold Logistics UK managing director Jon Miles said: “2018 saw us grow our transport operation further. Our warehouse was extended to accommodate an additional 88,000 pallet spaces, making Wakefield the largest single site temperature-controlled warehouse in the UK.” Fleet expansion is also on the horizon for some companies. Dale Brothers was looking at investing in 20 new refrigerated trailers to update some of its fleet and add extra for new business it has taken on board. Cold Move was also set on expansion. Managing director James Woodward, said: “2018 saw us expand our coldstore operations with the development of a new coldstore at our Maes y Clawdd site in Oswestry. This will give us a further 2,700 pallet spaces on site.” Meanwhile, other companies are revelling in their 2017 successes. NFT Distribution’s chief executive Ross Eggleton, says that its flagship Tilbury warehouse has proven successful. “The momentum of interest we are experiencing is testament to the scale of operations and large volume of fresh produce we're capable of handling,” said Eggleton. Fowler Welch managing director Nick Hay points to a £2m upgrade of the company’s Spalding chilled warehouse to increase capacity as one of the highlights of 2017. /9
Who’s who in temperature-controlled logistics
Grocontinental joint managing director Linda Grocott, said that a key highlight of 2017
was the “successful implementation and integration of the Arla business in year one of our
partnership”, following the construction of a new 32,000 chilled pallet dedicated maturation
site. Agro Merchants Group bought Grocontinental in December 2017. Agro said at the
time that the purchase “reinforces Agro’s position as the leading cold storage and logistics
provider in the United Kingdom and Ireland, deepens its commodity expertise, and
substantially enhances its value-added service offerings for customers”. Grocontinental
is the third significant investment by Agro in the UK and Ireland, following the 2014 purchase
of Castlecool and the 2015 acquisition of the Sawyers Group.
A complicating factor is the ongoing saga that is Brexit. The UK’s logistics industry expected
continued success in 2018 despite the uncertainties posed by Brexit and continued
economic instability, according to the Freight Transport Association Logistics Report 2018.
It polled the opinions of around 500 freight and logistics businesses operating in the UK
and internationally. Elizabeth de Jong, director of UK policy, Freight Transport Association,
said: “Respondents to this year’s FTA Logistics Report were generally positive about their
2017 trading performance, and the prospects for their respective sectors. However, with
inflationary pressures at home and abroad and the uncertainty of trading relationships
post-Brexit, it is clear that many operators are far from confident about their future
business prospects.”
"Leaving the EU Customs Union and single market has big
consequences for supply chains and the continuity of the
UK's European trade," said James Hookham, deputy chief
executive, Freight Transport Association.
3
Society of Motor Vehicle Manufacturers and Traders
4
www.assetalliancegroup.co.uk/news
/ 10TOP
Who’s who in temperature-controlled logistics
TEMPERATURE-CONTROLLED LOGISTICS PROVIDERS
Turnover Turnover Tractor Trailer Temp- Industry expertise and customer base
Rank Company 2017 % 2016 fleet fleet control
£ millions change £ millions pallet store
sq metres
1 437 +5 417 914 1,395 128,700 Gist, owned by the Linde Group, operates
in the UK, Europe, Asia, South America and
South Africa providing transport and logistics
for industrial, food, beverage companies
Gist including perishable and chilled products.
Basingstoke, Hampshire Gist has 20 UK depots. Customers include
www.gistworld.com/services Marks and Spencer, (Gist handles all M&S
Martin Gwynn, chief executive food storage and distribution) Eat, Starbucks,
Young’s Seafood
2 431 +14 379 1,000 3,000 102,193 Culina Group has 50 UK depots and provides
chilled and ambient temperature logistics for
food and drink suppliers. Services include
Culina Logistics
warehousing, distribution, and contract
Market Drayton, Shropshire
packing. Culina entered the food and drink
www.culina.co.uk
logistics market in 1994 from a single site
Thomas van Mourik,
operation then rapidly expanded in the UK. In
chief executive
2007 it took over Bristol-based Baylis Logistics
to create a business with sales of £125m.
And in 2009 it took over Wincanton’s chilled
consolidation activities at the Trafford Park
and Gloucester multi-user sites. It bought the
logistics business of Cert Octavian in 2012. In
2016 Culina bought Great Bear Distribution to
create a £400m turnover business employing
5,000 people
3 313 +14 275 1,400 2,000 90,000
Turners boosted its presence in the
temperature-controlled sector in 2012 when
pallets
it bought Browns Chilled Distribution, a
£35m turnover chilled transport business
with 120 trucks based in Spalding. Turners
has 32 depots and its temperature-
Turners (Soham) controlled division is BRC accredited
Newmarket, Suffolk with a core fleet of 300 vehicles. Turners
www.turners-distribution.com handles frozen and chilled and provides a
Paul Day, managing director consolidation service for all temperatures
from its Newmarket centre
4 212 +11 191 200 300 146,700
Yearsley specialises in frozen foods with
300 vehicles, 12 coldstores and three hubs
delivering over 12,000 pallets per day.
Yearsley Logistics has BRC and ISO 14001
Yearsley Logistics accreditation and is one of the first companies
Heywood, Lancashire in the UK to be working towards ISO26000. It
www.yearsley.co.uk is a member of the BFFF, FSDF and the RHA
Tim Moran, managing director
5 202 +27 158 637 831 70,000 NFT Distribution, a management buyout from
Northern Foods in 2006, was bought in 2014
by Hong Kong-based private equity investor
EmergeVest. The deal valued the company at
£60m. The transaction included integrated debt
NFT Distribution funding of up to £42m provided by Investec
Growth & Acquisition Finance. NFT Distribution
Alfreton , Derbyshire
www.nft.co.uk
has 15 depots and provides primary and
David Frankish, chief executive secondary distribution channels, of chilled, frozen
and ambient foodstuffs picking around 3.3 million
cases per week and delivering around 130,000
pallets of food and drink to UK grocers each week
/ 11Rank Company Turnover % Turnover Tractor Trailer Temp- Industry expertise and customer base
2017 2016 fleet fleet control
change
£ millions £ millions pallet store
sq metres
163 +13 144 450 710 46,452 Fowler Welch operates from 9 depots. It
6 is owned by airline business Dart Group
and provides ambient and temperature-
controlled food distribution in the UK. Kent-
Fowler Welch based Coolchain was bought by Dart in 1994
Spalding, Lincolnshire and merged with Fowler Welch. Fowler Welch
www.fowlerwelch.co.uk customers include Natures Way, Dairy Crest,
Nick Hay, managing director Direct Produce Supplies
7 139 +7 130 290 355 159,000 UK-based Nagel Langdons has 8 depots and
cubic provides chilled and frozen food distribution, part
metres or truck load, storage and picking. It is part of the
Nagel Langdons family-owned, Germany-based Nagel-Group that
Bridgewater, Somerset provides food logistics in Europe
www.nagel-group.com
Arran Osman, managing director
8 60 -6 64 180 300 60,000 Reed Boardall operates from a 22 hectare site in
Boroughbridge, Yorkshire providing temperature-
controlled food distribution in the UK. The family-
owned business stores and delivers frozen food
from manufacturers in Britain, Europe and further
Keith Boardall afield to UK supermarkets. The 80-vehicle fleet
Boroughbridge, Yorkshire, moves an average of 12,000 pallets a day storing
www.reedboardall.com around £100m worth of products
Keith Boardall, chief executive
9 FreshLinc 45 -39 74 374 660 FreshLinc serves retailers, food manufacturers,
Spalding, Lincolnshire growers and importers handling temperature-
www.freshlinc.com controlled fresh, chilled and horticultural
Robin Hancox, managing director products in the UK and continent. It also
transports flowers, plants and fresh produce from
Holland, Belgium and Spain. In 2003 it opened
a purpose-built distribution centre on a 13-acre
site in Wardentree Park, Spalding, Lincolnshire
with additional operating centres opened in
Normanton in 2006 and in Evesham in 2009
10 37 +6 35 61 120 168,000 Grocontinental provides in-bound and out-
pallets bound UK and European transport and multi-
Grocontinental temperature warehousing for the food industry
Whitchurch, Shropshire
www.grocontinental.co.uk
David Grocott and Linda Grocott,
joint managing directors
11 28 +28 22 44 52 31,500 Chiltern provides temperature-controlled
storage, distribution, packing, freezing
www.chiltern.co and tempering and case picking in the
UK and Europe. Customers include food
Chiltern Cold manufacturers, retailers, foodservice
Storage distributors, produce markets, independent
Peterborough, Cambridgeshire supermarkets and exporters
www.chiltern.co
Paul Jackson, managing director
12
Moores 26 +6 25 160 225 Moores Refrigeration Controlled Transport
Refrigeration operates five depots and is BRC accredited.
Controlled Transport The company, which is family-owned, set up
Eye, Suffolk in 1969
www.mrct.co.uk
Adrian Moore, managing director
/ 12Rank Company Turnover % Turnover Tractor Trailer Temp- Industry expertise and customer base
2017 2016 fleet fleet control
change
£ millions £ millions pallet store
sq metres
13 McCulla (Ireland) 23 +20 19 90 145 26,000 McCulla transports chilled, ambient and
Lisburn, Northern Ireland frozen goods in Ireland, the United Kingdom
www.mcculla.co.uk and Europe. The 8,000sq metre chilled and
Ashley McCulla, managing frozen warehouse uses the Accellos One
director programme for picking and all vehicles
have tracking and temperature monitoring
systems
14 21 +9 19 110 320 1,424 Virginia International Logistics is a family-
owned business with bases in Co Cavan
and Dublin in Ireland, and Tamworth in the
UK. It offers groupage, part and full-load
Virginia Transport services to food manufacturers, electronics,
and pharmaceutical companies. It provides
Co Cavan, Ireland
temperature monitoring and tracking of all
www.virginialogistics.ie
loads with split fridges, multi-temp units and
Ray Cole, managing director
double deck fridge trailers
15 20 +7 19 22,500 Oakland provides storage, picking, contract
packing, co-packing and logistics primarily
in Britain and Ireland. It offers customers
Oakland reduced transport costs, using prime routes
International to market. All volume clients catered for, with
Redditch, Worcestershire the opportunity to supply every major UK
www.oakland-international.com and Irish retailer via Oakland International’s
Dean Attwell, chief executive case and pallet consolidation platforms
16 19 +13 17 166 192 Buffaload has a double-deck and single-
deck temperature-controlled fleet handling
frozen and chill goods. Supporting this is
Buffaload Express, a temperature controlled
Buffaload Logistics and ambient courier service operating in
Ellington, Cambridgeshire the UK and Europe handling smaller cargo
www.buffaload.co.uk requirements – from miscellaneous loads,
Julie Feltwell, managing director including single pallets and specialist items,
to deep frozen goods and parcels
17
Matthews 18 0 18 150 170 Norfolk-based Matthews International
International Transport started in 1971 delivering with
Transport its own refrigerated trailers smoked fish
Great Yarmouth, Norfolk to Italy and Greece, and also collecting
www.matthewstransport.co.uk unaccompanied trailers from the
Russell Matthews, Netherlands arriving in the UK
managing director
18 Peter Green Chilled 16 +3 16 50 60 11,600 Peter Green Chilled provides chilled, frozen
(Mann Group) and ambient logistics services in the UK and
Shepton Mallet, Somerset Europe. Multi-temperature vehicles deliver to
www.petergreenchilled.co.uk the UK and Ireland, while European services
Tom Binks, managing director provide daily deliveries to cover Belgium,
Netherlands and and France. Benelux is
an on wheels service with France served
through consolidation hubs in Chevilly, Paris
and Carvin, Lille. All European countries are
served through an accredited European
partner network
/ 13Rank Company Turnover % Turnover Tractor Trailer Temp- Industry expertise and customer base
2017 2016 fleet fleet control
change
£ millions £ millions pallet store
sq metres
19 Rick Bestwick 16 +15 14 82,367 Rick Bestwick is part of Magnavale Group,
Chesterfield, Derbyshire a grouping of family-run operations. Rick
www.rickbestwick.com Bestwick provides frozen, deep chilled,
Kevin Hancock, managing chilled and ambient storage and distribution
director
20 16 +33 12 50 75 143,000 NewCold is a Netherlands-based business
pallets primarily providing distribution and storage
of frozen foods for manufacturers. Westport
NewCold Capital Partners , a US private equity firm, is
Wakefield, Yorkshire its main shareholder funding new projects
www.newcold.com and supporting long term services. NewCold
Jon Miles, UK director has opened new sites in the US and Australia
as well the UK
21
Dale Brothers 10 +4 10 68 90 Dale Brothers provides temperature-
Telford, Shropshire controlled transport handling pallet to full
www.dalebrothers.co.uk load services. Dale transports raw food
Jeff Dale, managing director materials and finished products for delivery
to retailers
22
H E Payne Transport 10 -1 10 70 120 H E Payne Transport operates one tonne
Wyboston, Bedfordshire panic vans and 44 tonne refrigerated
www.hepayne.co.uk vehicles transporting ambient, chilled and
Richard Payne, managing frozen goods. It provides single pallet and full
director load services and ambient warehousing
23
NV Transport 10 +31 8 40 50 NV Transport and its partner companies, NV
Chichester, West Sussex Produce and Madestein UK deliver foods
www.nvtransport.co.uk and provide groupage transport for retailers
Steven Zwinkels, including Lidl. NV Transport also collects and
managing director delivers ambient and temperature-controlled
products daily to and from Jersey
24
Armoric Freight 9 +7 8 16 22 52 Armoric Freight started as a forwarding
International pallets company with strong links with the Brittany
Plymouth area of France which it has maintained while
www.armoric.co.uk expanding its services to western Europe.
Marc Payne, managing director It now operates in France, the Netherlands,
Belgium, Germany, Spain, Italy and Portugal,
providing temperature-controlled deliveries.
All movements are driver-accompanied
25
Kingbrook 9 0 9 10 10 Kingbrook provides transport and forwarding
Dover, Kent to mainland Europe with driver-accompanied
www.kingbrook.co.uk services for temperature-controlled and
Kevin King, managing director ambient cargo. It also has ambient, frozen
and chilled warehousing
Cold Chain News Top 25 temperature-controlled logistics annual ranking sponsored by
/ 14Who’s who in temperature-controlled logistics Own Account Operators The UK temperature-controlled own account sector is dominated by supermarkets which themselves dominate the entire temperature-controlled industry. Supermarkets are the principal driver of the cold chain market in the UK with their substantial own account operations and substantial use of third party logistics providers. This is reinforced by the concentration of buying power with 71% market share in the hands of four supermarket chains, Tesco 30%, Asda 17%, Sainsbury’s 17%, and Morrisons 12.5%.5 The UK grocery sector is one of the most sophisticated in the world, with the four leading supermarket chains competing fiercely for customers with an ever growing popularity of the discount chains, Aldi and Lidl especially. Semi-prepared foods, often chilled, are estimated to account for around half of household food expenditure. This trend continues to be a major driving force in the UK food industry. In numbers, there are 86,332 grocery stores in the UK selling £178bn annually. Of that number, there are 5,530 large supermarkets selling £88.5bn worth of goods. The grocery sector continues to record the strongest growth in retailing in the UK driven by modern grocery retailers. Convenience stores, discounters and online grocery retailing are the formats which are seeing the strongest expansion, with major chains opening smaller stores in city and town centres while limiting the expansion of large format outlets in out-of-town locations. By 2021, the total value of the UK grocery market will grow 9.9% to £196.9 billion.6 Online grocery shopping will remain the biggest growing channel with an increase of 68% over the next 5 years. It is still a small part of overall sales (5%) and very expensive to service, particularly the need for multi-compartment vans to handle home deliveries of frozen, chilled and ambient produce. By 2021 discounters will be worth £24.9 billion and convenience stores will remain the third fastest growing sector with sales increasing from £37.5bn in 2016 to £41.9bn by 2021. The value of the UK online grocery market has seen tremendous growth in recent years and in April 2016 was valued at £9.3bn. Online grocery sales are predicted to reach £17.6bn by 2021 as the internet becomes more widely used and relied upon by UK shoppers. Online grocery shopping is now offered by UK supermarket chains Tesco, Sainsbury, Asda, Waitrose and most recently by Morrisons through a link with Ocado which originally exclusively sold Waitrose products. / 15
Who’s who in temperature-controlled logistics Aldi and Lidl, the German owned discount chains do not offer an online service. Outside of these suppliers, the market is mainly populated by a wide range of niche, specialised retailers, many of which offer products that are not always available in major supermarkets. Online sales are being driven by three trends: access to the internet, geographic location and convenience. Some 29% of adults now do all or most of their grocery shopping online – confirming the UK’s leadership in online grocery retailing in Europe, but still, less than 5% of the total food retailers’ sector sales are online. The highest number of users of internet shopping is located in Scotland, followed by East Anglia and the Midlands, all rural areas. London also has a large number of internet shoppers but lower rates of car ownership in London might account for this. Online grocery shopping is rapidly growing; the boom in sales of tablets and smart phones has meant more access to online shopping. New players will provide more choice to shoppers. In 2016, Aldi launched “Special buys” and “wine online”. AmazonFresh has also launched in the UK. The UK convenience sector (similar to 7/11 stores in the United States) is thriving as shoppers respond positively to the greater choice of high quality local stores helping them shop a little at a time but often. All the major food retailers are increasing their convenience store openings. Franchises are also investing in their stores meaning that it is anticipated that the convenience sector will represent almost a quarter of the grocery market by 2021. Sales through larger format stores such as hypermarkets and superstores are expected to decline 3% over the next five years as consumers choose to shop in alternative places. The value of the UK online grocery market has seen tremendous growth in recentyears and in April 2016 was valued at £9.3bn. Online grocery sales are predicted to reach £17.6bn by 2021 as the internet becomes more widely used and relied upon by UK shoppers. Food and grocery expenditures account for 50.2 pence in every £1.00 of retail spending (excluding restaurants). Twenty one pence in every £1.00 spent on food and grocery is spent in convenience stores. The UK has one of the most advanced private label markets in the world (valued at around $100 billion). The UK's major supermarket chains dominate the private label market and on average 47% of products in its stores are private label, including wide ranges of prepared foods sold as chilled. Originally, private label goods were a copy of a branded product, but today they are often innovative. They give UK retailers the opportunity to diversify their product ranges and develop new revenue streams. / 16
Who’s who in temperature-controlled logistics
The extreme of UK private label grocery shopping can be seen by visiting a Marks
and Spencer (M&S) food hall where 85% of what M&S sells is own-label goods.
Most M&S customers buy the majority of their food from other mainstream grocery
retailers. They use M&S for special occasions, for convenience food such as ready-
meals and as a top-up to their regular shop by buying a few luxury items. M&S
consistently offers innovative, high quality and rigorously checked food.
Food prices have decreased in recent years due to the success of the discounters
and competition. However, since the UK vote to leave Europe in June 2016, sterling
has weakened significantly. Given that the UK imports around 40% of all food
consumed domestically, food prices are expected to increase in the near future as a
result of the weaker pound. In the last few years the UK has witnessed a remarkable
shift in how and where consumers choose to buy their food, with the discounters
and online shopping being the winners.
5
Kantoor Wordlpanel
6
USFA Foreign Agricultiural Service report 2016
/ 17Who’s who in temperature-controlled logistics
Temperature Controlled own account operators by turnover
Company Turnover (M) Turnover (M) Turnover (M) Turnover (M)
2017 2016 2015 2014
Dairy Crest 395,700 925,500 1,247 1,332
Tesco 49,900 54,433 62,284 63,557
Lidl UK 41,526 38,277 34,162 30,722
PRM Group 27,490 9,059 8,900
J Sainsbury 26,224 23,506 23,775 23,949
Asda Stores 21,408 22,066 23,157
W M Morrison 16,317 16,122 16,816 17,680
10,555 10,311 10,310
Marks & Spencer 10,622
Quayside Frozen Foods 9,500 8,700
Aldi Stores 8,744 7,705 6,900
Waitrose 6,505 6,339 6,387 5,996
Brake Bros 3,701 5,998 3,295 3,094
Booker 3,701 3,767 3,894 3,810
Iceland Foods 2,770 2,658 2,682 2,699
Arla Foods 2,347 2,575
Müller UK & Ireland Group 1,984 1,337 4E
Farmfoods 669 694 812
E H Booth & Co 263 277 279 282
JJ Foodservice 179 182 182.6
Creed Foodservice 62.8 58.7 58.9 55.7
Braces Bakery 27.4 29.5 32.8 34.4
Consort Frozen Foods 24 21.7 23
Bidcorp (UK) 20.5 19.6 12.7 n/a
Total Foodservice Solutions 18.9 17.7 17.2 16.7
/ 18Who’s who in temperature-controlled logistics
Temperature controlled own account operators by fleet size
Company fleet size 2018 Vehicles Trailers
Asda Stores 2,934 4,581
Tesco 2,343 4,061
Muller UK & Ireland Group 1,922 1,155
Brake Bros 1,737 173
Booker 813 0
W M Morrison Supermarkets 810 1,900
1,025
Aldi Stores 794
Arla Foods 695 687
Co-op 631 592
Farmfoods 179 260
Braces Bakery 72 16
Creed Foodservice 71 4
PRM Group 40 40
E H Booth & Co 24 14
Ilfracombe Wholesale Grocers 22 0
NOTES
1.Turnover as per Companies House
2. Vehicle numbers as per VOSA Operating Licence
/ 19Who’s who in temperature-controlled logistics Coldstore Operators Cold store operators are already weighing up the implications of a disorderly Brexit on their industry as the clock ticks towards the March 2019 deadline. Oakland International chief executive Dean Attwell is open about the effects on customers and on his own company. “We are seeing increasing levels of nervousness amongst some of our European clients who are currently considering increasing their stockholding levels as part of a risk management strategy to safeguard against possible delays at borders,” says Attwell. “We are also currently increasing our frozen capacity at both -18 and -25 categories to account for increased demand for our frozen storage clients.” Andrew Baldwin, managing director of Reed Boardall’s cold storage division, warns that European companies will struggle to find logistics partners as demand grows. “I believe that in the short to mid-term, available storage will become premium although defined border policies may see a longer term decline in hauliers who see existing routes as no longer viable.“ It is fair to say that the open border policy we currently enjoy will almost certainly be restricted once the UK has left Europe. As a result, European manufacturers wishing to compete in the UK frozen food market will need to secure a robust logistics and storage solution that will allow today’s high demand, quick turnaround order profile to continue. As demand increases, finding these suitable logistics partners on which you can rely for consistent, responsive service, will become more difficult.” Does Reed Boardall anticipate that delivery times (ie storage) will increase as a consequence of a possible disorganised Brexit? “It is inevitable that inbound delivery times will be impacted, longer stocks will need to be held in 3PLs to bridge this gap, however, this should not have a knock-on effect on delivery scheduling into the end user,” says Baldwin. In terms of finding skilled labour in the UK, recruitment will certainly be even more of a hot topic post Brexit, warns Baldwin. “Initial concerns would be for businesses that are heavily reliant on agency workers and jobs will be far more available. It is, therefore, more important than ever to establish a solid workforce now: location will also be key in retaining staff.” Jon Miles, country director at NewCold, says: “In all likelihood we will see an increase in requirement for temperature-controlled storage in the UK. In which locations will there be most demand? This will very much depend on food producers, and whether they currently already have storage arrangements and distribution arrangements in the UK, plus where final delivery locations will be to get most efficient supply chain. If there is an increase around ports it would seem logical that these will be the key ports on the east coast.” Overall, Miles says that it is difficult to predict any short-term market changes and trends when it comes to cold storage until the exact details of the final negotiations are known. “Our thoughts are that we are likely to see more product stored in the UK, and for longer, due to lead time and supply chain risks on importing from Europe,” Miles says. / 20
Who’s who in temperature-controlled logistics
Company Location Frozen Chilled Ambient Other services
(cubic metres) (cubic metres) (cubic metres)
Chiltern Cold Bourne, Highbridge, Livingston, 9,500 22,000 7,500 Co-packing, stock control,
Peterborough, Whittlesey pharmaceutical storage and
Storage Group
www.chiltern.co logistics, secure and bonded
warehousing, chilled distribution
Cold Move Oswestry (2 sites) 11,000 0 2,000 Storage, secondary distribution,
www.coldmove.net blast freezing, import/export,
rework and co-packing,
order management, pallet
management
Culina Logistics/ Culina: Bristol, Coalville, Haverhill, 0 102,193 724,644 Refrigerated transport, contract
Great Bear Hereford, Lurgan, Market Drayton, packing, pallet pooling, stock
www.culina.co.uk Milton Keynes, Stafford, West Thurrock. management, bonded services
Great Bear: Birkenhead, Birmingham,
Bromborough, Chadderton, Chorley,
Deeside, Desborough, Hoddesdon,
Kegworth, Kettering, Laindon,
Lichfield, Lutterworth, Markham Vale,
Melksham, Northampton, Nottingham,
Port Salford, Rotherham, Sheffield,
Skelmersdale, Stoke-on-Trent, Tattenhall,
Upton, Wolverhampton. IPS: Dudley,
Featherstone, York
Fowler Welch Desborough, Heywood, Hilsea, Newton 0 46,452 46,452 Storage and picking, vendor
www.fowler-welch.co.uk Abbot, Nuneaton, Paddock Wood, managed stock, dedicated
Spalding, Teynham, Washington transport
Gibbs and Ball Dartford 0 1,496 14,120 Picking
www.gibbsandball.co.uk
Gist Barnsley, Basingstoke, Bristol, 15,700 113,000 102,000 Contract logistics, global freight
www.gistworld.com Carlisle, Chesterfield, Coventry, Crewe, management, temperature-
Cumbernauld, Dublin, Enfield, Faversham, controlled distribution, food
Hemel Hempstead, Motherwell, Nuneaton,
service
Spalding, Swords (Ireland)
Grocontinental Whitchurch 79,000 89,000 29,000 Blast freezing, co-packing,
www.grocontinental.co.uk pallets pallets pallets cheese cutting, ingredient
sorting
HSH Coldstores Grimsby (2 sites), Redditch 264,61 0 1,021 Stock management, blast
www.hshcoldstores.co.uk frozen and freezing, handball, order picking,
chilled re-packing and shrink wrap,
refrigerated transport
IBL Cold Stores Knowsley 50,000 20,000 22,000 Frozen and chilled storage, blast
www.intbl.co.uk freeze and tempering, transport
Kestrel 9 Grantham (2 sites) 1,432 360 936 Refrigerated transport, multi-
Temperature temp storage
Controlled Service
www.cooldelivery.com
Langdon Group Barnsley, Bridgwater, Dover, Liverpool, 6,000 9,000 0 Refrigerated transport,
www.nagel-group.com Redditch order picking
McCulla (Ireland) Belfast, Dublin 16,000 10,000 6,000 Refrigerated transport, order
www.mcculla.co.uk assembly, blast freezing,
tempering
/ 21Who’s who in temperature-controlled logistics
Frozen Chilled Ambient Other services
Company Location (cubic metres) (cubic metres) (cubic metres)
Moran Logistics Castle Donington, Leeds, not not not Refrigerated transport, picking and
www.moranlogistics.co.uk Manchester, Oswestry provided provided provided packing
NewCold Wakefield 143,000 0 0 Automated cold warehouse,
www.newcold.com/wakefield pallets storage area and loading docks at
-23C, semi-automated repacking,
automated unloading docks,
refrigerated transport
NFT Distribution Aldridge, Alfreton, Amesbury, 0 70,000 32,000 Food distribution, full load
www.nft.co.uk Bristol, Cardington, Crick, Cross transport, warehousing, UK food
Hands, Daventry, Gaerwen, imports, primary retail distribution,
Hilton, London, Middleton,
secondary retail distribution and
Newport, Penrith, St Albans
logistics
Oakland International Corby, Redditch, St Margarets, 2,500 20,000 3,960 Food tempering, case consolidation,
www.oakland-international.com Dublin contract packaging, distress load,
sample service, chilled parcel
delivery
Peter Green Chilled Evercreech 3,600 8,000 500 Refrigerated transport, case picking,
www.petergreenchilled.co.uk consolidation, blast freezing,
tempering, re-working and re-labelling
Pulleyn Reading 2,000 1,500 0 Refrigerated transport, packing
www.pulleyn.co.uk pallets
(chilled and
ambient)
Reed Boardall Boroughbridge 60,000 0 0 Blast freezing, up-tempering, case
www.reedboardall.com picking, repacking, pallet topping
and de-topping, temperature-
controlled distribution
Rick Bestwick Chesterfield, Liverpool, 65,008 17,359 13,640 Up-tempering, blast freezing,
www.rickbestwick.com Scunthorpe, Warrington export, temperature-controlled
distribution by DFDS
The Ice Co Storage Glasgow, Newcastle, Preston, 244,212 30,697 3,299 Consolidation, blast freezing,
South Kirkby tempering, order picking, handball
& Logistics
www.icecologistics.co.uk and pallet inversion, refrigerated
transport
Thermo Logistics Aberdeen, Glasgow, Leeds 2,200 726 1,300 Long hold storage, pick and pack
www.thermologistics.net sq metres sq metres sq metres orders, stock checking, chilled and
frozen food courier, special events
and sample delivery, same and next
day tri-temp specialist
Transkold Stanmore 2,500 300 0 Refrigerated transport, blast
www.transkold.co.uk pallets pallets freezing, tempering, cross-docking,
lorry parking
Turners (Soham) Bicker, Newmarket 95,000 0 0 Refrigerated transport, product
www.turners-distribution.com frozen and selection, packing, dispatch
chilled
Yearsley Logistics Belle Eau Park, Bellshill, Bristol, 135,000 11,700 19,000 Repacking, consolidation,
www.yearsley.co.uk Coleshill, Gillingham, Grimsby, temperature-controlled distribution,
Hams Hall, Heywood, Holmewood, import and export management
Peterborough, Seaham, Wisbech
/ 22Who’s who in temperature-controlled logistics Investment and Consolidation The trend for consolidation, long a feature of third party transport and distribution providers, is expected to continue within the temperature-controlled logistics sector. Companies expect ‘significant’ levels of mergers and acquisition activity in European road freight over the next five years, according to a survey published in November 2017 by Ti, a UK-based research consultancy. It predicts that the European market which grew by 2.4% in real terms in 2016, will continue to do so but at a real compound rate of 3% through to 2020. This continuing market growth makes it a good time to acquire other fleets and capitalise on increased business opportunities. The forecasts are coming true: the latest is the takeover by US-based Lineage Logistics in November 2018 of Yearsley Group for an undisclosed amount. Greg Lehmkuhl, chief executive, Lineage Logistics said: “Yearsley has demonstrated a strong commitment to developing longstanding, bespoke customer relationships that is consistent with how we do business at Lineage.” Yearsley operates 12 coldstores and over 300 vehicles in the UK. Also included in the transaction is Yearsley Food, a frozen food supplier to retailers, food service providers, manufacturing and export channels. KPMG Corporate Finance team, led by Jonathan Boyers in Manchester, acted as financial advisor and Gateley acted as legal counsel to Yearsley Group. Boyers, head of M&A, KPMG, said: “This is a landmark transaction for the logistics and frozen food sectors, both of which are currently seeing elevated levels of M&A activity, and is a great example of the continuing global interest being shown in high- quality British businesses from overseas investors, despite the uncertainties posed by Brexit.” Lineage has grown through acquisitions and organically. Its acquisition of Yearsley builds on the success of its first international acquisition in 2017 in which it acquired Partner Logistics, a European automated coldstore operator. XPO Logistics, also US based and the second-largest freight brokerage provider globally, has also been active. In the US it has spent $3 billion for Con-way and in Europe $3.5 billion for French trucking outfit Norbert Dentressangle in 2015. Norbert Dentressangle was ranked at number 2 in the 2014 Cold Chain News operator listing when Norbert had 24 temperature-controlled sites with a total storage capacity of 28,400 pallets. Total revenue from Norbert Dentressangle's temperature-controlled logistics business in 2014 was £389m (€535m), representing 22.7% of its total logistics revenue. XPO said in 2017 that it was setting aside as much as $8bn for additional acquisitions. / 23
Who’s who in temperature-controlled logistics
In five years, Agro Merchants Group has become the fifth-largest third-party
cold storage and logistics provider in the world, according to statistics from
the Global Cold Chain Alliance.7 Set up in 2013, Agro provides cold storage and
logistics, picking, packaging, fruit ripening, import/export, customs clearance and
freight forwarding from 61 sites in 11 countries. Its most recent UK purchase was
Grocontinental. Agro says the purchase “reinforces Agro’s position as the leading
cold storage and logistics provider in the United Kingdom and Ireland, deepens its
commodity expertise, and substantially enhances its value-added service offerings
for customers.” David Grocott and Linda Grocott, third generation owners of
Grocontinental, will continue to lead the business as joint managing directors. Agro
previously bought Poland Services Transport – Logistyka to expand its reach in
Europe. Agro's acquisition of Poland Services Transport is part of Agro’s strategy
focused on key European trading hubs. In January 2017 it opened an 18,000-pallet-
space warehouse in Rotterdam-Maasvlakte. In February it bought Frissul and
Frigomato, a cold storage operator in Portugal.
Private equity investor EmergeVest, which recently made its seventh UK logistics
acquisition in the form of CM Downton, is considering further investment in the
UK temperature-controlled sector. The Hong-Kong based company’s current UK
portfolio includes NFT Distribution, NR Evans, supply chain software company
Adjuno, Allport Cargo Services and Palletforce. The acquisitions show that
EmergeVest is building a UK network at speed, encompassing freight forwarding,
pallet, chilled and now ambient.
Heath Zarin, EmergeVest’s chief executive and managing director, told Cold Chain News:
“We believe the UK temperature-controlled sector is
attractive for further investment. We are considering
opportunities in this space, largely through our existing
investment in NFT.”
Zarin declined to comment on exactly what type of temperature-controlled
operator EmergeVest would be interested in targeting. EmergeVest is also intent
on expanding its portfolio of UK companies to include more than just logistics.
“We have completed several acquisitions in the UK logistics sector and maintain
an active pipeline of potential opportunities,” said Zarin. “In addition to logistics,
we are currently interested in business services and technology.” EmergeVest
was established in 2013 and has focused on quality investment opportunities in
targeted industry sectors. It is particularly interested in investments in the supply
chain, logistics and transport sectors, especially in the UK and China. It acquired
NFT Distribution in 2014 and then snapped up NR Evans in August 2016. At
the time of NR Evans’ acquisition Zarin said: “This acquisition will not be our last
and demonstrates EmergeVest's confidence in the UK market as an investment
proposition post Brexit."
7
www.gcca.org
/ 24Who’s who in temperature-controlled logistics Temperature-Controlled Courier Services Courier companies were generally confident about their prospects in 2018 with many intending to grow their customer base and add vehicles to their fleet. However, the driver shortage continues to be a problem for some and ongoing challenges for most courier firms include cost control and uncertainty over Brexit. Overall though, optimism rules when it comes to acquiring new customers, with many courier firms bullish about prospects for 2018. Gavin Hicks, managing director of LogistHicks Couriers, said that the company was experiencing good initial conversations with new prospective customers and was "looking forward to further increase its customer base during 2018.” Directors of several courier firms said that they intended to boost their fleets. John Lee, managing director of Courier Express Refrigerated Transport, told Cold Chain News that the company would “continue to grow our fleet of vehicles on a national basis”. Jeremy Thompson, managing director of Absolutely Chilled, says the company is planning further expansion of its temperature-controlled fleet and partnerships with other logistics companies.“ Our largest growth has been with our temperature- controlled services, leading to our fleet of these vehicles expanding by 50% since the beginning of 2017.” Mark Taylor, managing director from Cool It Distribution, also has his eye on fleet expansion. “The business is getting bigger and better year after year. We are hoping to double the fleet size in 2018 and expand to more work outside of the M25.” Jason Buckley, managing director of LF&E Refrigerated Transport, said that 2018 was going to be “another interesting year for LF&E” as the company plans to double its vehicle fleet. LF&E has also recently moved premises and this is now its headquarters for operational staff. A new Medicines and Healthcare (MHRA) warehouse and distribution hub in Normanton, in West Yorkshire, will enable the company to provide an ever-wider range of services, says Buckley. Expansion is also on the mind of Kuehlspeed managing director Mark Bischler. “Our aim is to grow our UK coverage and presence to be able to provide our customers an even greater range of offerings for all their temperature-controlled logistics requirements,” he says. Mark O'Connor, managing director of Aktrion Chilled Logistics, says the company is planning to expand its business in both its pharmaceutical and food businesses. “Clinical trial work throughout Europe is healthy and the quality of both our warehouse and delivery service is driving our growth.” / 25
Who’s who in temperature-controlled logistics Growth seems to be coming from the chilled ready-meal and pharmaceutical sectors. Stephen Wilson, managing director of S Wilson Refrigerated Transport, says: “With continuous growth in the fresh prepared ready meal/food sector there has been a further increase in business for refrigerated hauliers. Also, we are seeing an increase in demand for deliveries in the pharmaceutical sector.” Simon Herberts from RDS Transport says: “The acquisition of a competitor has meant a 20% increase in turnover, opened new channels of work in different areas of the industry, and led to our most successful year to date." Paul Gould, commercial director at Iceotemp, says that the company expects to grow the pallet distribution area of its operation through new business, “now that weight and volume capacities have been greatly improved.” Cutting costs is the aim of many companies. Kevin Smith, manager at Invicta Couriers, says that investment in telematic temperature monitoring and driver training has reduced administration costs, fuel costs and vehicle damage. The company planned to become BRC (British Retail Consortium) accredited in 2018. Brian Brennan, managing director of PDQ highlights the ongoing battle with rates. “Rates are being challenged on a daily basis, by customers looking for cost efficiencies.” PDQ has got round this problem by setting up its Pharmanet operation, which is a “much more economic option for customers.” Brennan points out that there has been a huge increase in competition from owner drivers and small companies, especially on the food side of the business. “Eastern European companies are our biggest competitors on the pharma side of the business”, Brennan says. The driver shortage is a thorny problem that won’t go away, according to some courier firms. Managing director of Chillway Express, Alfred Jones, says: “The biggest challenge is that there is a national shortage of drivers over the whole sector.” The picture is mixed when it comes to courier firms and Brexit. Angela Cooke, managing director of Angies Transport Services, says: “There are no real challenges for 2018, Brexit is no problem as we work mostly for American companies.” Tony Colato, managing director at Eskimo Express, says: “Our market is performing well considering the current climate of uncertainty over Brexit.” Alan White, managing director at Fresh Logistics, says: “2017 has been an exciting year for us, we have found that the market has become extremely buoyant, with customer partners wanting a long-term relationship to see them through the Brexit time frame. We will try our utmost to ensure no price rises or service failures within the UK and European market.” / 26
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