Big interview: Caterfood MD Phil Atyeo on running a different kind of buying group

It’s hard to argue with the affable Phil Atyeo, MD of Caterfood Buying Group, when he says the wholesale sector has not seen anything like Caterfood before. On one level it does give the appearance of a traditional buying group, with eight different wholesaler members. However, unlike with other groups that businesses collaborate with, pooling their buying power in order to leverage better terms and service from suppliers, all eight of Caterfood’s members are owned by international foodservice operator Bidcorp, which also happens to own UK wholesale giant Bidfood.

Caterfood came into being in 2019 as Bidcorp kicked off a shopping spree of independent foodservice wholesalers with the purchase of East Sussex-based Elite Fine Foods. Since then it has snapped up four more wholesalers. However, its routes can be traced back to 2012 when Bidcorp, then trading as 3663 First for Foodservice, bought Boston-based South Lincs Foodservice.

That deal came hot on the heels of the acquisition of two Scottish wholesalers – Forteith Foodservice and Inverness Farmers. Successful businesses at the time, the deals did not go to plan for Bidcorp, Atyeo explains, as they essentially became outposts of 3663. They “ended up losing every independent business they had”, he explains.

Therefore, when the South Lincs deal happened, the plan switched to “keep it separate, don’t break this one, and don’t try to turn it into something it’s not”, he says, crediting this philosophy to his mentor and former director of specialist business at 3663, Bob Rogers.

“It’s a big lesson that was learned,” says Atyeo. “When South Lincs Foodservice was purchased, Bob fought hard to keep the business separate. That mentality is what inspired the creation of Caterfood Buying Group as an independent unit, not an offshoot of something else.”

Rivals have called Caterfood a buying group in name only but Atyeo, who took up his role as MD at the group’s inception in 2019, is keen to stress its independence from Bidfood.

“We look at Bidfood as a friendly competitor. We are both owned by Bidcorp, but we operate against one another. We put tenders in together hoping that we get them and Bidfood doesn’t,” he says.

Caterfood and Bidfood share practical aspects such as electricity, fuel hedging and vehicle purchasing, but Atyeo says the sharing ends there. “My job is to try and take those benefits without compromising the business. But we have different strategies, different goals and different customers.

“We want to attract the people that want to work with our independent wholesalers. Bidfood or Brakes customers are not for us, so it’s very important that Bidfood doesn’t influence how we operate and how we engage with our customer base, because ultimately that’s what makes customers want to deal with us and not them.”

The tasting panel

Since taking the reins of the business, Atyeo has also encouraged a “collaborative” environment among members.

“Our members are teaching us, rather than us instructing them,” he says. “Part of my job is to understand where the benefits are, what is each business’ strong suit, and to get people to share, engage and act as one team.”

The group facilitates that sharing process by holding monthly meetings with company MDs, where they discuss key developments and decide on changes, including new products.

“We call it the ‘tasting panel’ and we ask members ‘does this work for you?’ and ‘is this the right price point and quality?’ We opt for quality first, and commercial feasibility second.

“We’re not running a bohemian community, don’t get me wrong, but what we want to achieve is a change that, if it affects us all, is in the hands of us all.”

For Caterfood, being one team also means letting every business “operate the way that best works for them”. From the smallest one, Nicol Hughes, turning over about £12m and doing seven days a week delivery in four-tonne vehicles, to the medium and larger ones, including South Lincs, running its own 15-tonne vehicles three times a week.

“At the end of the day, we want Nicol Hughes to be the best Nicol Hughes it can be. We don’t want it to adapt to what South Lincs does, and vice versa. Every business is unique, and we don’t want to standardise them,” he says.

To keep that individual focus, central distribution is not where the group is headed, according to Atyeo.

“We’re never going to be major consolidators with everything coming out of our central distribution.”

Members do their own distribution to customers, as well as their own purchasing. When a smaller member can’t place an order due to MOQ rules set by the supplier, CFBG steps in with lorries distributing from within the group, delivering from one business to another.

“For example, we’ve got some freezer space in Elite that we’re using to put some products into there and ship out to some of the south coast. We are quite agile, and wherever the marketplace takes us is where we end up going.”

That fleet-of-foot mentality has affected the way the business deals with suppliers, with a desire to “be the first to market” for NPD and budding suppliers.

“We want suppliers to come to us and say ‘try this, it’s new’. We’re good at looking at things differently, and we want to strike the right balance of getting great deals but also stocking an excellent, new thing. In the end, we want suppliers to want to work with us.”

Part of the variety the group boasts, Atyeo adds, comes from the independent suppliers coming from every business within the group, resulting in “thousands and thousands” of core lines, and expanding supplier relationships.

“I think a lot of people assume that we’re just riding the coattails of Bidcorp, but actually we’re setting up our own supply chain, our own relationships and our own product range that is unique to us.”

Triple turnover ambition

The group has big ambitions to triple its turnover from its current £350m to reach £1bn in the next five years.

Atyeo sees this target not as fixed but rather as a “direction” for the wider business that can only happen “at the mercy of wholesalers wanting to join”.

The majority of growth, Atyeo says, will come via Bidcorp acquisitions. The group has grown quickly post-Covid, as selling up became a more attractive option for independent wholesalers affected by the financial effects of the pandemic.

Conditions remain tough for many, and there are also lots of second- and third-generation wholesalers rethinking their role within a family business.

“I think lockdown has made people re-evaluate. There is nervousness about the future for some, with people wondering if the next thing will put them out of business like Covid nearly did for many.

“On top of that, I think the mentality of the second, third generation is: ‘I’ve seen how hard my parents have worked, I’m not sure I want to do that.’”

Atyeo doesn’t exclude independent businesses joining without selling up to Bidcorp. “We are in talks with one right now, which is a new adventure for us.

“Hitting the billion mark is possible once the acquisition process and other members are on board. In five years, we may be looking at exactly that number, but that could also take us seven or 10 years – or the time it takes for businesses to come forward and trust their future into our hands.

“We see ourselves as sharing a community, with everybody wanting others to succeed. I think that’s what differentiates us from others in the market.” That and its ownership model of course. It will be fascinating to see how this changes if and when non-Bidcorp wholesalers come to the party.