"“We see ourselves as an insurance policy for our customers"

"Once the result of the referendum was announced, price increases were more or less inevitable because of the fall in the value of sterling," explains Matt Jones, Senior Buyer at Reynolds. “However, like most other foodservice suppliers, at Reynolds we contract our produce for fixed periods. This offers a degree of protection to our customers so, over the summer period, their prices were safe and secure despite the huge swings in currency.”

"Of course, now we have renegotiated many of our contracts with suppliers, the currency swing has had an impact. However, we have been working closely with suppliers to keep the impact to a minimum by scrutinising costs, such as packaging, transportation and product specifications.”

And what isn’t clear of course, is whether the pound will fall further. “No one really knows how Brexit is going to play out, but you can’t rule out the pound devaluing even more,” says Matt. “We see ourselves as an insurance policy for our customers because they need to nail down the margins on their menus. They can’t keep putting them up every week.”

He goes on to say that to stay competitive you need to understand your customer's needs. Ensuring that products are fit for purpose is crucial.

"Call it imperfect, mishapen, Class II or value fruit and veg, we’ve been offering our customers these products as options for years, because they are a great way of saving operators money. Once a pepper is chopped up and put in a salad, or a carrot turned into a soup, it doesn’t matter what it looks like. The truth is that now the retailers have got involved, there are fewer of these products available and the price gap has narrowed. However, we will continue to offer these products where we can.”

And what about prepared products? “During the last recession, we definitely saw a move away from prepared produce to wholehead, because it’s an obvious way of saving cash, at least on the surface. However, much will depend on the operator, because prep is a great way for a multi-site operator to guarantee consistency. For kitchens with limited facilities or skill levels the price premium will still be justified because you might be able to save on staffing costs.”

As for producing more in the UK, higher input costs in the UK, such as labour and utilities, can often make growers less price competitive compared to say Holland or Spain. It’s possible that the gap will narrow between imports and domestic production according to Matt, but no-one can say for sure as much will depend on future government regulations.

Looking forward Reynolds will continue to look at shortening the supply chain where appropriate, continue to drive efficiencies and increase volumes where they can to drive better deals.

For more information:
Andy Weir
Reynolds
Tel: +44 (0)845 6348 260
Email: andy.weir@reynolds-cs.com