The Big 30’s big buyouts and the foodservice fallout

If there was one area of wholesale you would forgive for not being too bullish right now, it would be foodservice. The past three years have seen suppliers hammered by lockdowns and the closure of hospitality altogether, supply issues and labour shortages, and finally an energy and cost of living crisis that has devastated demand, further compounded by rail strikes.

It has left the sector a prime candidate for consolidation. “In big cities like London, Manchester and Cardiff, the hospitality sectors are thriving but these could be seen as outliers,” suggests one wholesale source. “It’s the towns where people are not going out and are tightening their belt.” Some wholesalers are probably looking into the headwinds and saying yes, we’ve had a good year or a bit of recovery, but the cost of living is only going in one direction.”

This could play into the hands of bigger operators. Already this year Bidcorp UK, formerly Bidfood, has snapped up two small regional wholesalers, Harvest Fine Foods and Thomas Ridley Foodservice. Both were members of the Caterforce buying group and will be run as standalone businesses within Bidcorp’s new Caterfood buying group.

The positive spin is that “it’s still obviously a viable market if the big players are willing to invest. These businesses are not going to the wall,” says the source.

But Fairway Foodservice CEO Coral Rose insists there is still plenty of opportunity for independent foodservice wholesalers. “We have to be enormously proud of the way independent wholesalers have fared in the last couple of years and the good news is all our members are performing ahead of where they were in 2019,” she explains, clarifying that is volume and not just turnover.

Foodservice wholesalers report cost price inflation last year of c20%, versus 10%-15% for grocery wholesalers.

Rose says dealing with cost price increases remains vital, but she wants to work collaboratively with suppliers, “especially the core foodservice suppliers who also suffered during covid, to understand what their challenges are”. She is also now looking at where cost and commodities prices are falling and challenging suppliers over this.

2023 could well be another tumultuous year.