Bidcorp's growth strategy

Growth    
Succession planning   Third party “group purchasing organisations” (GPO)

Bidcorp’s ability to operate sustainably depends largely on the experience and skills of its management team and their succession plans. Any senior management departures or unavailability (due to death, injury, illness or other reasons) or technically skilled worker shortages could adversely affect Bidcorp’s operational performance.

What it may mean to us

  • Loss of key members of management
  • Loss of customer and supplier relationships due to loss of a team member
  • Group sustainability

How we respond

With a robust and significant global footprint, international opportunities are provided to those eager for career progression. Skillsets existing across the group could be used in other group businesses should the requirement arise. Experienced management skills within the group are demonstrated through continued annual growth. Each management team is encouraged to grow and mentor high-potentials within their team to ensure a strong succession plan exists.

 

Some customers purchase via third party GPOs in order to reduce prices paid on foodservice orders, which then in turn results in the GPOs placing pricing pressure on us. Some GPO memberships have recently included smaller, independent restaurants.

What it may mean to us

  • Dampened customer orders
  • Margin erosion
  • Increased competition reducing pricing

How we respond

We offer innovative, real-time engagement with our customers through our bespoke industry leading ecommerce solutions. We are small enough to be agile and meet the most demanding requirements; but global enough to source even the most hard to and products. Fundamental to our success is the strength of the real personal human connection we strive to develop with our customers which generates loyalty and appreciation for the personalised service excellence which sets us apart.

Intense competition

Foodservice distribution is highly competitive, with low barriers to entry. Pressure on key customers is increasing due to challenges in the macro-economic environment. Changing consumer tastes, preferences and loyalties have heightened the risk of consumers shifting their preferences to competitor products. Customers switch suppliers easily for lower priced, differentiated products or perceived better customer service.

What it may mean to us

  • Loss of customers due to competitive pressures
  • Increased competition reducing market share
  • Margin erosion
 

How we respond

The cost of switching for local customers is very low as are the barriers to entry in this industry, therefore customer relationships and engagement is key to differentiate. However the benefits of scale in a national business do create barriers to entry. The group structure being decentralised, provides the ability to compete at a local level with the benefits of procurement scale, enhancing our competitiveness. Each local Bidfood operation also has access to a global platform, enabling teams to present new culinary trends, unique product ranges and introduce a variety of cuisines. We continuously monitor external market trends and collate consumer and customer insights to assist in the development of category and brand strategies.

Own brand “Cooking with…”, Bidfood South Africa.

Organic expansion and acquisitive growth   Economic instability

Bidcorp will selectively pursue opportunities to supplement organic growth with strategic acquisitions, both bolt-on and new country investments. These acquisitions present opportunities for growth and increases the scale of Bidcorp’s operations.

What it may mean to us

  • Exposure to political, economic and social conditions beyond our control
  • Impact of familiarisation of new local laws and regulatory constraints

How we respond

A global executive management team provides oversight of all transactions. We ensure full and proper due diligence and sovereign risk assessment is completed before any acquisition is nalised. New country acquisitions are conducted under the oversight of the group executive drawing on the expertise of all the group management where required.

In line with the decentralised Bidcorp governance framework bolt-on acquisitions are conducted by local management who are close to, and understand their local markets.

Political upheaval

Political instability is unpredictable and can present suddenly, with significant impact. These unforeseeable upheavals can potentially disrupt normal business operations materially.

Business sentiment to political upheavals such as Brexit or the Hong Kong protests generally appears to be more cautious than the average consumer sentiment.

What it may mean to us

  • Adverse impact on financial performance
  • Inability to pass on cost impacts to our customer, impacting margins
  • Higher borrowing costs
 

How we respond

The impact of Brexit to date on our UK foodservice market has been limited, with consumers continuing to seek out-of-home meal options. Consumer confidence may, however, wane through fatigue and uncertainty. Our core philosophy of naturally hedging assets and liabilities remains and is an important group fundamental.

Political strife in Hong Kong is having a material impact on that business with hotel occupancy down 85%. Management has enabled flexible working hours for staff and are negotiating with suppliers and landlords to minimise operating costs. Safety measures to protect staff and assets have been implemented.

We continue to keep a close watch on political developments, within the ambit of what we can control, we remain agile in our response.

 

 

Bidcorp is a geographically diverse business exposed to changes and instability affecting the global economic environment.

What it may mean to us

  • Business slowdown due to financial instability, trade restrictions, imposition of tariffs and volatility in exchange rates.

How we respond

We are committed to the jurisdictions in which we operate. Our local teams are best placed to focus on what we can control, delivering the right food, at the right price, at the right time, to the right customers.

Through our globally diverse decentralised footprint, although exposed to high-risk macro environments, local teams continue to manage their local environments and grow in each of our markets.

BPC provides a solid backup plan should disaster strike and support is required to find alternate product supply. This is the advantage of being a part of the global team.

Own brand EasiYo, Bidfood New Zealand.

Own brand EasiYo, Bidfood New Zealand.

Our material risks:

  • Food and product safety
  • Product scarcity
  • Cyber breaches
  • Competitor activity threatening margin and market share
  • Lack of access to our consumers
  • Labour and skills scarcity
  • Reputational damage
  • Economic and political unrest
  • Climate change impacting product availability and our ability to operate