Friday, March 29, 2024

Alliance looks to food service growth

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Alliance Group hopes that its new food service business will be achieving annual sales above $100 million in the next three years or so.
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A four-strong development team is working up a pilot programme in the United Kingdom that the meat exporter will use as a springboard for wider Europe, and into Asian markets as well, general manager sales Murray Brown said.

“Who knows how it could go – we’re a $1.5 billion business and if we could get the food service up to 10% of total sales over three years that would be $100m to $150m.”

Alliance is supplying advanced cuts to two high-end London restaurants in the pilot scheme and has another 80 to 100 potential customers, including hotels and cruise-line operators as well as restaurants.  

“They mightn’t all get over the line but we’d like to have 30 to 40 buying off us next year, and the first year will be a learning experience,” Brown said.

The initial focus is on Asia and Japan-style cuisine.

“We’ve been trialling with the two restaurants for six to eight weeks, starting with lamb rack cutlets, so it’s still in the very early stages.''

The programme is part of chief executive David Surveyor’s strategy of lifting the farmer co-op group’s market value and performance, one of the issues he identified when he joined Alliance earlier last year.

Food service was growing faster than the traditional retail-supermarket sector supplied by Alliance, because the cost of eating out became lower and many consumers not having the time to prepare meals, Brown said.

Margins on food service sales could be anything from 5-20% higher than for supermarket supply depending on the product, with a likely average in the 10-15% range.

The London team is led by director of food service Graham Bougen, who has done consultancy work for Alliance in the past and who designed the business plan. The team also includes a chef, sales manager, and marketing manager focusing on social media.

A lot of emphasis was being put on helping chefs with menu planning across lamb, beef and venison proteins.

Alliance will be a wholesale supplier and will control the supply chain, with added-value processing contracted out, Brown said.

The group is also developing a New Zealand food service business, but the larger focus is on the UK project.

Surveyor has also pushed health and safety as a priority for Alliance, and said the co-op was investing $3.4m in new processing technology, installing 49 new bandsaws into eight plants.

The saws were designed to stop the blade within 15 milliseconds when the unit sensed a person or glove was near or in contact with the blade.

“This significantly reduces the risk of any potential injury, limited to at worst a small cut,” Surveyor said.

The technology has been put into the plants in Dannevirke, Levin, Nelson, Timaru, Pukeuri, Makarewa, Mataura, and the big Lorneville plant in Invercargill.

Alliance also expects to invest another $2m-plus in a second phase of the programme, with the replacement of 20 larger bandsaws as soon as the technology becomes available. The use of standard bandsaws was one of the highest-risk activities in the industry, Surveyor said.

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