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Balancing automation with food skill

13 April 2015

Privately owned Freshtime UK is a prepared vegetable supplier to the retail industry. Based in Boston, Lincolnshire, the company continues to grow despite challenging economical times for the food industry. Freshtime’s roots can be found as far back as 1964, when cooperative ELGRO (East Lincolnshire Growers Ltd) was formed. Freshtime was created in 1993 and there was a management-led buy-out in 2000. 

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Managing Director Mark Newton and Paul Faulkner, Site General Manager
Managing Director Mark Newton and Paul Faulkner, Site General Manager

Now, the company is under the governance of Managing Director Mark Newton who took over in 2013 and set out plans to develop Freshtime into a world-class business. The Lincolnshire site is the only factory owned by Freshtime, so everything processed by the company comes through its doors. “Our main business can be categorised by three pillars,” says Newton. “We do prepared vegetables, which is where we started historically. We also produce prepared salads, which includes everything from couscous to rice and pasta, meat, fish and seafood, for example. And thirdly, we have our deli fillers, which is anything sold into retail or foodservice as sandwich filler. And we have smaller subdivisions of the business such as dips and dressings. We do everything onsite here, which sets us apart from a lot of other businesses.”

“We also make everything on the day completely fresh,” adds Paul Faulkner, Site General Manager at Freshtime. “We don’t hold on to anything before sending it out. It’s made on the day, for the day. That gives consumers the maximum amount of shelf life for the product that they’re purchasing. It also has the advantage of keeping our on-site stock levels manageable and improves our efficiencies. The less product you’re got stored on-site, the quicker you can move the product through the factory and the less waste you have.”

This of course creates different challenges to those businesses who have huge stores of food kept onsite. “The reality is that we start every day with no orders and no stock,” says Newton. “The orders come in from 6am or sometimes earlier. Those orders will then be manufactured and despatched the same day. Depending on the retailer, the product will arrive at one of their depots by evening and will probably appear in store the next day. It depends of course on the retailer. But generally speaking, from our factory to the supermarket usually takes less than 48 hours and can be in less than 24 hours.”

Forecasting therefore is a major part of Freshtime’s business strategy. The company works hard to get their forecasting as accurate as possible to ensure there’s minimal wastage and yet still able to fulfil all orders that come in. “It helps that we’re not a heavily promotional business, which is when you have the biggest problems with forecasting, thanks to huge fluctuations with high demand followed by a huge drop at the end of the promotion,” explains Faulkner. “We have close relationships with our retailers so we can work to what they have coming up. And there are some movements in the market that happen seasonally, so we know that the first nice weekend in the UK means the summer products will pick up and then when the weather turns for winter, the stew packs and produce side picks up.”

Being able to predict the market is clearly vital for a fresh produce company that needs to know 12, 16 or even 20 weeks beforehand if there’s going to be a big demand for carrots so that the supply chain can plant and produce those carrots. “That’s where the skill comes in to understand your market and understanding its fluctuations,” agrees Newton. “Luckily, the food market tends to follow the same patterns in a very broad sense. So we know, for example, that at Christmas there will be a larger demand for sprouts than at any other time, and of course Christmas falls on the same date each year, making it even easier to predict. The difficulty comes with more niche products, such as a prawn layered salad, which is more often affected by temperatures. If it’s a nice weekend in June, for example, then sales go up and that’s something we have to manage and model. We have to look at a broad range of data, from historical records to weather reports. Salads, as an example, sell slightly better at Easter, while vegetables sell better in the winter months. You can map across 12 months within certain categories, and then within those, we can look at planned promotional activity, long-range weather forecasts and then there are special events, such as the Olympics, the Jubilee celebrations or the World Cup, as examples. These events all impact on consumer activity. We look at when school holidays fall and we trend data. And we work with agencies like Nielsen, IRI and Kantor to look at trends in different regions and look at food consumption trends. So that all goes into the forecast. And on top of that, we have shorter term forecasting of 12 weeks or so where we look at sales patterns and what consumers are buying. We also cross-reference promotional activity because while we don’t do much ourselves, our clients do and that’s something we have to be aware of.”

And with an increasingly competitive market to work in, promotional activity is becoming more common and with tighter margins. Newton points out that it’s not an exact science though. “We spend a lot of time and resources working out our forecasts. We have category managers on site who look at all the data and try to feed that information into the operations team for as much as we can comfortably predict, while the operations team handle the day to day requirements.”

The example Newton and Faulkner give is the 2010 World Cup game between England and Germany. “It was a Sundayn evening game and it seemed like the entire nation was having a barbeque that night,” says Newton. “Sales went right up, and not just across our category. When you have 80 – 100% uplift from one day to the next, you’ve got to be able to try and foresee these events.”

It’s easy to see why planning is such a big part of the business. “At the end of the day, if we haven’t got the planning right, then nothing’s going to work,” says Faulkner. “The labour controls won’t work, the capacity model won’t work and load times won’t work. We have a plan to produce a product and if the materials haven’t arrived, then it throws the plan off. So we have to plan to avoid that from happening.”

Fluctuating costs
Freshtime also keep an eye on the fluctuating costs of whole-head produce compared to prepared product. “It’s a shorter-term concern, but there are times when the price of buying whole-head is more expensive than buying prepared and consumers change their buying habits,” explains Faulkner. “That can have a big effect on our business, particularly if the reason for the higher price of whole-head is due to any shortages in supply, which affect our business too.”

The factory
Freshtime refer to their factory as a kitchen, although on a much grander scale of course. “People are often amazed that our factory is set out more like a kitchen than a traditional factory,” says Newton. “A lot of the processes in our factory are people-driven. It’s not a factory where we have huge pieces of machinery running all day with someone pushing a button. We need to have the flexibility to able to react to peaks and troughs and that’s where our people-driven factory comes in. Most of our salads, for example, are hand-assembled because as a business we think that adds quality. The fact that we have people in the factory blending with a small machine is part of the Freshtime approach to processing.”

It certainly makes it easy for the company to try new recipes as the batch up process isn’t as complex as it could be in a highly automated factory. And the company is working on new product developments constantly. And with foods that have a fickle audience, like salads, it’s important to stay ahead of the game. “Eighteen months ago, maybe two years ago, salads were full of pasta mayonnaise mixes,” says Faulkner. “Now it’s more about grains and lighter eats. We do a lot of market research, looking at what retailers like Pret A Manger are doing, what’s coming over from the US and in foodservice. At the moment, in the past three months there’s been an explosion in the street food market, like pulled pork. Trends that hit the US tend to migrate over to the UK within six months, so we look to those markets to see what’s popular over in other countries too.”

Newton agrees. “With a lot of trends, they start in places like London and Birmingham and Manchester. There’s pockets of street food with an emphasis on real, authentic flavours, which is in contrast to some of the recent, bigger trends of the past decade or so of Chinese food or Italian food, where the emphasis wasn’t so much on flavouring. So while we’ve had curried foods and spices, now we’re seeing Lebanese foods and Moroccan products coming through. Ancient grains are particularly popular right now, like spelt and bulgur wheat. Things that have been kept at the back of our cupboards for the past 30 years are becoming trendy once again.”

And with this movement in the market, Freshtime needs to keep the flexibility of their lines open to these changes. “We have to invest in technology that moves with these changes,” says Faulkner. “Every investment is carefully considered. We look at new ideas and what we want to do with the business in the future. We test and make sure it works for us, and once we’re happy with that choice, we’ll move ahead with investment. But we certainly don’t want machinery that can’t be used after a run has finished. Keeping the balance is critical and getting the return on investment as quickly as possible is obviously key for us. For example, if we look at investing in a depositing machine, we don’t just want something that will deposit chicken, and just chicken. We want machinery that can deposit chicken and prawns and cheese, which gives us flexibility and increases our productivity. Retailers have a much quicker product turnover now, so where they used to have a summer and winter range, they now have a spring and autumn range too, so we have to keep up with that change. Not only do we have to invest in equipment that can cope with that quick turnover, but we have to launch new products each quarter, along with the challenges of using bespoke ingredients and controlling our stock.”

And of course that flexibility is needed not only in changing products, but also product batch sizes. Freshtime have a diverse product turnover so a line running 15 kilograms of dressings might need to switch to an alternate dressing of 500 kilograms, and they have to do it while maintaining efficiencies. But again, it’s down to careful planning. “Keep waste down and make sure you don’t fall short,” Faulkner says. “Invest in a quality product, because if the product isn’t good, it won’t sell. It’s as simple as that. You have to buy quality ingredients to create a quality product.”

“And we want to provide something different for our customers,” Newton adds. “We make fresh products so we cook our own pasta and we make our own dressings. We have products that have over 34 ingredients that are sourced from our stock. That’s one difference we have. We also have a solid workforce, many of whom have worked here for years, and investment in people is as important to us as investing in equipment.”

Recent investments
The company has recently invested in changing all their lighting within the factory to LED, both because of the cost savings and for environmental reasons. “The biggest automation investment we’ve made is our data capture system through our Ishida checkweighers,” reveals Faulkner.” We’ve upgraded all the software which enables us to gain an overview of efficiency and availability. It’s a quality measure that gives us an insight into the give-away by line or by shift. We can now get a visual from that information and make changes accordingly to the way we’re working. It’s about controlling our process, rather than replacing any workers. We like to find a balance between automation and the personal touch, and we will always want to retain that food skill set found in our employees. When we do invest, we want to get the best out of it, like our recent mixer upgrade. The new mixers have got weigh cells in the feet of the mixer, which allows us to weigh within the mixer and cuts out pre-weighing.”

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