3663 - named because it spells ’food’ on a phone (unless you’re using a Blackberry, in which case it spells ’rffr’) - has fast become one of the UK’s foodservice giants since its rebirth out of the ailing Booker in 1999.
It could also be called 4843 (’huge’), having become the nation’s second-biggest wholesaler behind Brake Brothers. Now accounting for around 15% of foodservice supplies, bakery buyer Richard Woolley says his spend alone stretches "well into tens of millions".
Such is the scale and reach of 3663’s business, from supplying the smallest sandwich shop up to multinational chains like Pret A Manger, that one national newspaper last year set out to expose its role in the mass-market dumbing-down of catering. The fact that it ended up admitting that, actually, 3663 was probably doing more than most to source locally and service niche requirements, was some indication of how the face of large-scale catering supply is changing.
In fact, over the past 12 months, 3663 has put its weight behind its new premium brand, Whites, launched to meet the gourmet/provenance brief. "The proposition has been about provenance, with clean ingredient declarations," says Woolley. "That has been a superb success." And he is continually on the look-out for "products with that wow factor".
This means more openings for new suppliers. Of the 100 bakery suppliers on his books, the smallest might only turn over between £50,000-100,000 with 3663. "Just because we’re big-scale, it doesn’t mean that we just operate with big-scale suppliers," says Woolley. "I’m basically looking for a USP that sets us apart from the competition."
As the foodservice market evolves, so does Woolley’s business; traditionally split into frozen, ambient and chilled, bakery is morphing away from a focus on temperature to one with a sharper eye on the overall category. As such, Woolley, who has primarily been buyer for frozen bakery - one of the most profitable parts of the frozen category in 3663 - has recently taken on ambient breads and pastry products.
His role, then, is to spot innovation, negotiate a good deal and set a price that’s attractive to customers. A big part of the negotiation process is towards achieving a "category margin".
"There is no point in the supplier not making any money and - more importantly - we need to make money," he says. "So hopefully, we come to a point where both parties are in a win-win situation."
== Category focus ==
The category margin for bakery is not set in stone, and some national accounts have the authority to set special prices. Products are listed in quarterly trade brochures, supplemented by specifically targeted brochures. There is a cost for a placement, he admits, "but this is to cover our costs and it’s down to a category focus". This means developing a marketing strategy hand-in-hand with the supplier.
"What we would do is work with our quality assurance team and with marketing to say, ’This is going to be a big launch’. If we know a supplier will be planning a major campaign in British Baker, or they have employed a third-party sales recruitment company to get feet on the street, we would look to dovetail into that type of activity."
Given the economic picture, predicting the future of the marketplace is becoming tricky. "It’s a fragmented picture out there," he comments. "We have seen some above-industry-average growth in frozen over the last few years. Some end-users are having a great time at the moment and it’s not all at the budget end of the market. But there’s no defined picture as yet. There’s a lot of talk in the press about people trading down, but we’re just not seeing that."
The biggest successes are still coming from the top end of the market, even if the mid-market has suffered as a result, he adds. "Some breads from European manufacturers have surpassed all our expectations - very premium breads, very rustic and very authentic," he says. "They just seem to have hit at the right time. One of those suppliers is Bakehouse, another is Délifrance."
On the flip side, he believes a big part of his job is managing the fall-out when exciting new product development (NPD) doesn’t quite translate into sales. "As with all NPD, it doesn’t always fulfil your ambitions. It’s then about how you manage that. Was it a poor product? By the nature of us having listed it, we wouldn’t think it was. Was the supplier not marketing the product within our business? If so, we could come up with some remedial action plans to help drive sales."
And it’s that driving of the category forward which spurs him on, he says - in other words, "finishing the year at a higher point than you started, so you’re seeing some of the products that you believe in making their mark."
=== Getting to grips with 3663’s distribution system ===
3663 has various methods of getting products to customers. A new supplier would probably not be able to distribute to 30 depots. In this case, a third-party consolidator is used to handle limited amounts of stock. 3663’s depots can then pull that stock off in very low quantities.
"This is an ideal way for smaller suppliers to get distribution within our network and our depots don’t have to fulfil a minimum order of, say, one mixed pallet," says Woolley.
Regional distribution centres are used for middle-ground suppliers starting to build up volume, so they may go direct to the hubs rather than the third-party consolidators. If it’s a big supplier, they will supply direct to depots. 3663 has a fleet of over 1,000 trucks, which then supply products direct to customers.
=== At a glance ===
CV: A degree in history and politics - "the politics can come in very handy!" - was followed by a stint at The Co-operative and various food industry positions in buying and area manager roles, including launching bakery into a major oil company’s forecourts
Suppliers’ notes: "I don’t expect to be a supplier’s only contact. What we want to foster is an inverted triangle, rather than me being at the top of the triangle. That means suppliers talking to our supply chain, talking to marketing, our depots, telesales managers, national accounts managers... a whole variety of people within our organisation. That’s what pays dividends for suppliers. Size is not a prerequisite here - it’s about targeting the resources you have."
Shopping list: "We’ve had successful rustic and authentic products on the bread side, and it’s now about how we take it on from there. How do we develop something rustic, but with a twist?"
Biggest bugbear: "It seems very banal, but we send out Excel spreadsheets that suit our systems and some suppliers, for whatever reason, change all the formats around. No matter how much you say to them ’DO NOT CHANGE THE FORMAT’, they do, which just creates more work."
Pastimes: "I got my pilot’s licence and now I can hire a plane and go away with a group of friends for a weekend. That sounds a bit flash, but it’s not if you see some of the planes I fly in."