Guy Farrant has got the job he always dreamed of. His appointment as director of Marks & Spencer's food division last May after a six-month search by chief executive Stuart Rose comes after a 28-year career in the retailer, 22 years of which have been spent in food.
Farrant had been acting director of food for a year before his role was made official, a situation that caused some to question whether he had the full support of Rose. But his appointment was welcomed by staff and Rose has endorsed him in the pages of this publication, stressing that he was benchmarked against others and won out.
On meeting Farrant there is no doubt he is the right man for the job. With M&S's determination to regain its position as the undisputed number one for food quality and innovation in the face of a Waitrose that is motoring ahead and a reinvigorated Sainsbury, Farrant's long experience in all the fresh food categories and obvious enthusiasm for everything to do with food are key to driving forward initiatives M&S believes its customers respond to, such as animal welfare, provenance, fair trade and health-related innovation.
"I have a passion for food," he says, "and a love of procurement areas, such as the farmgate."
His long history at the company means he has been there during the good times and the bad. But Farrant is sanguine about the difficulties over the past few years. "The food business has been pretty resilient, which is a testimony to our position in the marketplace, but we need to grow at a faster rate again. We are back to playing to our strengths - with best in class quality and an innovative agenda," he says.
In his words, this agenda has seen M&S "doing what is difficult". For example, it is ahead of schedule and 98% of the way through a programme begun in November 2005 to remove hydrogenated fats from all products by the end of 2006.
"We were told it was impossible but found a way. And we are not just replacing it with other saturated fat; we have reformulated the recipe."
Artificial colours, flavourings and flavour enhancers have been removed from chilled ready meals and in October M&S launched the additive-free range Cook.
Health plays a big role in Farrant's plans going forward. Take ready meals. Here the idea is for very lightly processed and raw ingredients, not "heavy industrial plants and processes," he says. "We are making ready meals like we would make salads."
The 25-strong Healthily Balanced ready meal range will be catapulted ahead in September when it is hugely expanded to include every cuisine and taste, from Indian and Chinese to vegetarian.
Then there are big plans for autumn for the 300- strong speciality food range. The company is putting together a major range sourced from local businesses and "playing to our food credentials".
Such innovation is helping to grow sales. For the 52 weeks ending 1 April 2006, food recorded strong growth of 7% and like-for-like sales were up 3.6%. Quarter four like-for-likes rose 6.4% against an industry average of 1-2%. Jonathan Pritchard, analyst at Oriel Securities, says: "M&S's market share gains reflect its own product innovation and good advertising, but also the wider flight to quality the UK consumer is making. M&S now believes that it's arrived at the sweet spot where general merchandise and food footfalls drive each other. We suspect the move to 'look behind the label' by promoting fair trade, sustainable fishing and free-range egg ingredients in all recipes has helped sustain positive sales momentum across food into the first quarter of this year."
Oriel predicts that, with good sales growth in clothing, M&S will be reporting accelerating like-for-like sales at its AGM next month.
All good news but the challenge will be keeping up the pace. To ensure it stays ahead of market trends, M&S has developed a food strategy for the next 10 years, based on four brand pillars. 'Fresh, natural, healthy and enjoyable' is epitomised by the new ready meal ranges. 'Reasons to celebrate' takes in the new direct business. 'Gastronomic adventures' promises restaurant quality food at accessible prices. And 'extraordinary' represents common products done extraordinarily well.
"If it doesn't fit a pillar then we won't do it," explains Farrant, "and this includes marketing, the store and promotions. It provides real clarity and helps our top-down direction. Some 80% of strategy is top-down now and 20% is the people in categories doing their job."
So the growth strategy is there, but what about costs? The decision last year to renegotiate terms and pay 98% of the value of suppliers' invoices was, not surprisingly, unpopular. Farrant will only say that two thirds of suppliers have worked with the company for more than 20 years and he believes M&S prices "accurately and fairly" as customers are prepared to pay for quality.
"We are not quick to trade volume for price but suppliers are benefiting from the volumes they have got now. And we have more adventurous prices. We are not afraid of a bold positioning, as long as it is value for our customers."
Revamped and new ranges; a major refurbishment of food halls, including new concepts such as eat-over counters and, in October in Newcastle, the first full service restaurant; the expansion of Simply Food, plus the complete overhaul of every bit of food packaging - it all sounds like a huge investment. But Farrant says it is being done to strict cost controls.
"We have spent a lot of time with product and packaging, but are not spending huge amounts more money; we are just spending smarter. In formats such as Simply Food we have learned to trade space more intensely. In our food halls the new equipment has enabled us to keep the same shelf space while releasing actual space to areas such as clothing."
In the last financial year M&S added 2.3% to total food space. This year will see a 5% increase. But it's not all about stores. The move to take its party food catalogue online using the new Amazon platform next year is a likely precursor to a full online food operation (The Grocer, 10 June, p6). Then there's the whole area of hospitality, with a new head of the food development unit, Richard Flint, being appointed seven months ago to explore opportunities to take the business into areas such as hot food-to-go, the eat-over deli counters, bakery and possibly foodservice.
Farrant believes his great team will help him grow the business at a faster rate and make it more accessible to more people. "With the right space, right location and our world class product, you can expect more of the same - and better."n
Q&A
What got you into the food business in the first place?
I began when I was 16 as a Saturday boy filling the frozen food fixture at the Marks & Spencer store in Eastbourne. I found that I enjoyed the interaction with customers and the integrity of how things were done. At 18 I started working in the M&S store in Tunbridge Wells. This was a training store, so I took up the opportunity. I left stores aged 22 and became a trainee buyer in fresh produce, for Brussels sprouts. My first executive was none other than Stuart Rose.
Who have been your mentors?
Over the years I have worked with great people who have changed the role of food in this country, people like former M&S deputy chairman Clinton Silver and former M&S managing director Lord Rayner.
Who do you admire today in the food business?
UK food retailing is of the highest standard in the world and I admire Tesco. It consistently does a good job. Also Waitrose. And Whole Foods Market, although I would put money on my quality over their's any day - but they have good theatre.
What are you most excited about going forward?
I am very excited about the nutritional ready meals and we will be developing a lot more. I am passionate about the speciality range; it is fantastic quality. And I think the Cook range is on trend and addresses the need for good quality raw materials. Plus I have a soft spot for produce.
What do you secretly crave when you are at your desk?
I can't stop eating the almond stuffed olives in our speciality range. I eat a lot of fruit but also love our ready meal moussaka.
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