Emerging Markets

A geographic footprint over four continents, this division includes Bidfood operations in Africa, South America, Asia and the Middle East.

African operations manufacture and distribute meat, poultry, dairy and general food ingredients as well as baking ingredients and equipment and a multi-temperature foodservice offering of a full range of ambient, chilled and frozen food products.

Asia and the Middle East distribute high-end speciality products into the western styled food market with supply exclusivity in many global brands.

South America sources and distributes frozen, chilled and ambient local product into the independent street market.

Horeca team, Bidfood Middle East.   myBidfood launch at Linbro depot, Bidfood South Africa.   Angliss cuisine seminar, Mainland China.   Viña del Mar depot, Bidfood Chile.
Horeca team, Bidfood Middle East..   myBidfood launch at Linbro depot, Bidfood South Africa.   Angliss cuisine seminar, Mainland China.   Viña del Mar depot, Bidfood Chile.

 

Human capital

Crown Food microsafe steam sterilizer, Cape Town SA.

Turkey experienced alarmingly high inflation and unemployment statistics during 2019, which added pressure to the seasonal nature of the market.

Middle East team has focused and invested in the skills development of their team. Training programmes in technical skills to grow and develop the data analysis, social media management, digital marketing type skills. Soft skills and products and brand training has also delivered positive response from the team. Food and safety training remains a top and ongoing priority, ensuring training is provided to all in our team, in particular all food handlers covering risks such as basic food hygiene, the person in charge, fire safety and first aid.

 

Angliss Hong Kong boost staff morale

Chinese believe that hot soup can nourish one’s beauty, strengthen physical health, and even prevent and cure diseases. Each bowl of a double-boiled soup is a labour of love made with the patience and wisdom of Chinese herbal culture. We fully understood our operation line employees are physically working very hard at their work, we therefore delivered Chinese soup with delicious taste of home to their workplace to show our sincere care and support.

 

We believe that people are motivated by the recognition, respect, admiration, positive feedback and credit they receive. We also believe that motivation comes from self-respect, pride, and a sense of personal identity.

Due to the nature of the markets in which we operate, and the need for specialist commercial expertise, much of our employee development focuses on skills and career training. This includes both current and potential employees. We aim to empower our talented people to take the initiative and do what's right, we encourage our teams to act independently with great freedom, self-sufficiency, self-reliance, and the ability to make most decisions autonomously.

Monitoring and ongoing efforts to prevent workplace injuries is a key management function in all Bidfood’s operations. Occupational related injuries reported during the year relate broadly to slips and falls and injury to limbs. No disabling injuries were reported during this period. Corrective action plans are directed at preventing future related occupational injuries.

Bidfood SA manages a diverse work force, employed in a turbulent labour market. Challenges with the labour unions were experienced, management invest into this communication process on an ongoing basis to avert the risk of workers striking.

Investment into a stronger sales team has been a key management focus, as all businesses in the region commit to the group strategy of growing the free trade market segment. Embracing the ecommerce platform for customer ordering purposes frees up our sales team to build relationships and deliver the Bidfood added value service to our customers.

In South America, a new setting the benchmark even higher sales director appointed in Brazil has implemented a new era in staff engagement in the business. Creating key account teams, increasing telesales and embracing ecommerce technology implementations to bring the business in line with Bidfood best practice. Motivating staff through innovative medical plans and campaigns, investing in a canteen and celebrating internal events through a commemorative calendar and magazine has made a huge impact in this business.

Chile has also invested in their team, strengthening their finance and sales teams. A strong, passionate leadership team, that draws on the best practice within the group, has built the scale and strength in this operation which has delivered impressive results in the past year.

 

Financial capital

   
       
 

Emerging Markets continued to navigate challenging economic and political headwinds, however, staged a strong recovery by year-end.

Overall revenue was up 13,1% to R21,1 billion (F2018: R18,7 billion), with trading profit marginally up at R1,0 billion (F2018: 1,0 billion).

Africa delivered an improved second half performance, with trading profit marginally up for the whole year. Difficult economic conditions have curtailed consumer spending with cost pressures rising well above food inflation. Bidfood delivered excellent results under the circumstances and Crown Food Group (CFG) achieved a second half recovery. Chipkins Puratos (CP), our 50% equity-accounted joint venture (JV), experienced a tougher latter part of the year. All businesses grew volumes in their targeted channels, but margins were under pressure.

Bidfood secured further street trade gains, benefiting from real volume growth and better margins. National Accounts declined slightly impacted by competition and weaker demand. Industrial catering sales rose, however, credit to the channel was carefully managed. Expansion of the myBidfood ecommerce platform continues. Own brand products remain a differentiator for Bidfood. At CFG, the impact of the listeriosis crisis was reduced by the growth in the wholesale and independent channels. The Six Bar acquisition is performing well. CP was impacted by lower yeast offtake due to declining bread sales but bolstered by good sales of own-manufactured products.

The state-of-the-art wet plant was commissioned, however, start-up losses impacted profitability.

 

Greater China faced pressures which significantly impacted overall profitability. Sales gains were realised and margins held up but trading profit fell as expenses became significantly higher to expand our product offering following the loss of our cornerstone dairy products agency in F2018.

Dairy remains an important category, however, diversification of the supplier base continues.

A recovery was evident with a strong last quarter. In mainland China, our geographic distribution network is reasonably complete. The Guangzhou Meat factory commenced operations in the last quarter which is an important milestone in our product diversification. Miumi, the Japanese food business, delivered a strong performance.

Hong Kong and Macau introduced new brands into the portfolio while stepping up investment into production centres. The hotel and restaurant channel and Chinese cuisine remain opportunities for mainland operations. The business is well poised to resume its growth strategy, however, the fallout from ongoing protests in Hong Kong are unquantifiable at this stage.

Singapore achieved gains but trading profit growth was impacted as a result of our Vietnam start-up costs. The Vietnam JV became operational late in the period. Singapore is now a predominantly foodservice business with exports, marine and commodities having been scaled back. Malaysia performed well, growing sales and margins.

Chile benefited from the October 2018 acquisition of Foodchoice, giving the business a national presence. Integration and efficiency extraction continue. Organic growth remained an important driver as processed meat and seafood categories were expanded. The acquired Temuco and Antofagasta branches added to momentum.

Brazil achieved strong sales growth. Both the Irmãos Avelino and Mariusso components of the business reported solid trading profit growth.

Recent political change has yet to manifest in higher economic growth, however, consumer sentiment is positive. Refinement of the business model continues to enable sales growth and expansion of the broadline product range. Further capex is planned to cater for growth. Bolt-on opportunities are being pursued, however, vendor expectations remain unrealistic. The introduction of own brand products in numerous categories is gaining momentum.

Middle East delivered an excellent performance, surpassing previous levels of profitability. Sales and trading profit exceeded expectations while margins rebounded. UAE secured a significant agency which impacted working capital in the second half. Al Diyafa, the Saudi Arabian JV, recorded very pleasing results, driven by new account gains and better product mix.

Turkey recorded good sales gains. A small trading profit was achieved which is an improvement on the comparative period. Izmir-based EFE continues to perform well. The weak Turkish lira compounded difficult trading conditions. Opportunities for regional expansion are under consideration.

Manufactured capital

Bidfood SA invested in two depots, to be built from spec. A manufacturing facility was a significant investment to embrace the light manufacture, value-add element within the supply chain. Investing more than R36 million in delivery vehicles ensures our customers are receiving the best attention and service levels. The CFG Nelspruit building has been rebuilt following the fire. CFG moved back in, in February 2019.

Angliss Asia has invested in new and upgraded depot space in all key regions of their operations. The local management teams are driving initiatives to increase product offerings. Inventory management, warehouse and logistics are continuously improved and keeping up with wider product assortment. Market entry into Vietnam over the past year presents new opportunities to grow our footprint in south east Asia.

Brazil and Chile have invested in depots and vehicles over the past year, bolstering infrastructure. Replacing old vehicles in Brazil creates the opportunity to improve delivery capacity. Embracing group-wide health and safety best practice, upgrades to the depot lighting, racking, temperature controls and adoption of Food Safety, Quality Control and Warehouse Standards has had a positive impact to the operations. Chile has decreased distribution costs through an investment in an additional depot in Santiago, separating deliveries to the north and south regions, and investing in a state-of-the-art freezer in this new depot.

   
   

Intellectual capital

Angliss Asia, having suffered the loss of a significant brand, has successfully introduced substitute brands which have been very well received.

Market traction in the Middle East continues. Innovations have been adopted such as the “Cash Vans” concept, embracing the concept of small drop size for more frequent deliveries and deliveries to more remote locations.

Turkey continues to perform well in the brand distribution market, and has in the current year embraced the wider foodservice model with investments in Izmir, delivering a full foodservice offering.

Product portfolio
Customer mix

 

 

* Hardware includes IT and office equipment.

 

 

Bidfood SA ecommerce sales through myBidfood for 2019 was 66,4% . Using YouTube video’s to assist customers, the use and understanding of the platform has grown significantly.  
 

 

The Middle East operations have focussed investment into upgrading the IT and online environment, anticipated to impact performance in the year ahead.

Natural capital

 

With operations in Africa, Middle East, Asia and South America, managing sustainability in our emerging markets is as diverse as the regions in which we operate. From the sustainable sourcing of product to the social projects we invest in, each region faces unique challenges.

 

Emerging Markets’
carbon emissions
(tCO2e)

90 243  3%
2018: 92 605

 

         

 

 

Scope 1 emissions (tCO2e)
(excl refrigerants and aircon gases)

22 102  2%
2018: 21 756

Scope 1+ emissions (tCO2e)
(only refrigerants and aircon gases)

23 291  1%
2018: 23 057
       
Fuel (kilolitres)
2018:
8 105 8 244
Gas (tonnes)
2018:
223 237
Aircon gas (tonnes)
2018:
13 15

In South Africa attempts to maximise transport efficiency by ensuring that transport of product to branches via a third party are coordinated to maximise payload and minimise distance. This will be measured going forward to demonstrate these efficiencies.

Irmãos Avelino truck, Brazil.
 

Scope 2 emissions (tCO2e)

44 111  6%
2018: 47 012
       
Grid Electricity
(kWh)
2018:
61 895 273 59 719 622
Non-grid Electricity
(kWh)
2018:

CFG has embarked on several projects to facilitate efficient use of electricity. A steam condensate return upgrade device was installed in late 2018 to decrease the volume of water and paraffin fuel used to generate steam to feed into the Wet, Dry and COE facilities, saving on electricity costs at CFG. A boiler heat recovery system was initiated to recover energy lost through the boiler stack as hot air, to reduce paraffin usage, and to improve CFG's overall carbon footprint.

With escalating costs of electricity in South Africa, cost saving initiatives were implemented across all businesses using solar panels. Grid tied solar PV panels were installed to decrease plant-wide electricity bill and to reduce the carbon footprint.

 

Scope 3 emissions (tCO2e)

739  5%
2018: 780
   

Food waste (tonnes)

Waste recycled (tonnes)

269

Waste to landfill (tonnes)

1 250
2018: 1 717 tonnes

Increased efforts are reported across all operations in the division to recycle waste. Reporting lower tonnes waste to landfill, and significantly reducing the greenhouse gas emissions associated. Waste efforts have been noted in plastics, cardboard, paper and common mixed waste. Management are committed to maintaining these efforts and reducing the impact on the environment even further

 

 

Water (kilolitres)

359 855  9%
2018: 329 501

 

With the water harvesting system fitted in the Bidfood SA Nelspruit Depot, we are able to harvest rain over the 1 000m2 area of the roof of the building. We are also harvesting the water from the refrigeration pods to provide a continuous backup water supply for the business. The water is filtered before it is used in the supply of the ablutions, truck wash bay and irrigation systems.

CFG was able to locate a stable source of borehole water in the western Cape, but the water quality was deemed as poor with high dissolved solids due to salts. CFG will be erecting a pilot treatment plant on its premises to establish practical yield and quality water from the borehole.

CFG has 4x24kℓ stainless steel tanks that have been converted to rainwater harvesting tanks for non-potable uses.

CFG water tanks, South Africa.

Social and relationship capital

Angliss Singapore together with NPO, SilverAce, delivered 200 customized first aid kits through our "Give From Heart" event. SilverAce runs activity centres for the elderly to encourage community involvement. Our target will be to distribute 1 000 first aid kits in the year ahead.

Bidfood UAE (HORECA Trade) partners with Taste Studio UAE and Emirates Red Crescent to donate over 1 000 Iftar meal kits, packed by our team, for distribution over Ramadan to the Emirates Red Crescent tent in Jafza. A partnership with Manzil for the second year supported the “Give and Gain” week. Manzil is a non-profit centre that aims to actively promote inclusion by providing a professional learning environment for persons with disability to nurture their potential and develop the requisite of self-help, social, educational and vocational skills that are required to function in society.

 

With the scourge of rhino poaching in South Africa and the subsequent impact on the wild life industry, Bidfood SA decided to get involved. Madikwe Game Reserve initiated an annual “Rhino Walk in the Park” event, which we support. The 5km walk tracks along the route where many of the more than 70 rhinos have lost their lives to date. The walk brings the reality of rhino endangerment to the forefront.

In celebration of the Chinese Dragon Boat Festival, Angliss Hong Kong Food Service staff members organised an afternoon gathering for more than 200 elderly tenants at Hiu Kwong Nursing Centre (Hong Kong) to show our love and care to them by presenting them with gifts from our healthy products range.

Bidfood Middle East annually donate to the Specialist Centre for Children with Disabilities in Dubai. The donations contribute to the renovation of classrooms. The Specialist Center for Children with Disabilities is headed by His Highness Sheikh Mohammed bin Faisal Al Qassimi and works to develop the capacities of persons with disabilities.

Irmãos Avelino Brazil supported local Brazilian charities over the year with initiatives such as the "Servathon Campaign" where the Mariusso Paulinia's depot joined with the local food suppliers to donate over one tonne of food to the Stop Hunger Foundation. Monthly food donations of about R$2 000 are made to local community centres. A winter campaign had the Brazilian team compete internally to donate old clothes for donations to local hospitals, nursing homes and homeless centres. Holiday initiatives to donate food, clothing and time are supported throughout the year, such as the Easter Chocolate donations to a children's home in Carapicuiba.