Nomad Foods: COVID-19 has changed value chains forever
Nomad Foods Chief Procurement Officer Stuart Caborn said he expects turbulence to continue in 2021 but his company is well prepared for the challenge.
The COVID-19 crisis has left a lasting mark on supply chains, according to Nomad Foods Chief Procurement Officer Stuart Caborn, who says 2021 is likely to be just as turbulent as nations around the world strive to contain the pandemic and try to restore some kind of normality.
Leading expert Dr Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases said this week it will be the end of 2021, and perhaps even into the following year, before some semblances of normality are established.
Although 2021 is going to be just as turbulent in Caborn's view, he says he is actually looking forward to next year because the work carried out by Nomad's procurement excellence team has left the parent of the Birds Eye, Iglo and Findus frozen food businesses well-prepared.
"Anybody can buy an ingredient for today, what we are interested in is having that ingredient in five years time."
Horizon Scanning
Horizon Scanning relies on a systematic outlook to detect early signs of potentially important developments. These can be weak (or early) signals, trends, wild cards or other developments, persistent problems, risks and threats, including matters at the margins of current thinking that challenge past assumptions.
The work of the team is founded in a three-pronged approach focussing on market research and analytics combined with horizon scanning and value delivery.
Benefits of having the team in place and working in this way were almost immediate as the pandemic started to take hold in China.
Team members looked into the effects of Asian supply chain disruption on competitors in the knowledge Nomad was likely to be much less affected because of a reduced reliance on supplies from the Far East.
Armed with the knowledge that competitors faced greater supply disruption in the region, Nomad executives were able to take pre-emptive actions by locking down key raw materials and supply chains in Europe and North America before rivals rushed to switch to suppliers in those regions.
Skin in the game
Since the onset of the pandemic, frozen food businesses have become accustomed to a sharp increase in demand, with consumer sales of freezers surging.
Caborn, who spent four years in a similar role at Young's Seafood, said the art of procurement is not just about saving a cent here or a dollar there, but about ensuring suppliers have sufficient capex and R&D so that innovation and branding is actually aligned to a company's individual future needs and development.
"If you leave no skin in the game for your partners then what are they going to invest in?"
The top 20 suppliers or partners to Nomad represent the resources of a €20 billion (€20 billion/$23.3 billion ) organization, employing half a million people and investing €1 billion ($1.2 billion) a year in capex and R&D, Caborn calculates.
For Caborn the bigger prize is about lifting UK fish consumption from 1.3 times to twice a week, for example, something that presents a €1 billion ($1.2 billion) opportunity.
Not only will this benefit food processors with a 30-40 percent market share, there are postive knock-on effects from growing the category for private label operators and other manufacturers, he said.
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