Supply Chain Therapy: 5 Ways To Improve Your Supply Chain and Improve Your Gross Margin for Creative Founders Who Don’t Like Operations

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0:41Hello there, people and listeners of The Hungry Podcast. I'm absolutely thrilled to welcome Bryony and Josh from Unleashed to the podcast. Today's episode is super, super special. We're going to be doing a supply chain therapy sesh because everyone needs a supply chain therapy sesh. I think it's so many people I speak to, so many founders have a great understanding of the kind of the sales and the marketing side. But I think the supply chain is the other part of the beast of building a household brand, building a challenger brand. And it is super complex. It's the riddle wrapped in the enigma.

1:22And I think today we're just going to dig into some of those challenges that founders will go through every week, every day. and I think it's going to be really valuable. So guys, thank you so much. I'm excited for this. Thanks for having us. So what I want to start with is I think let's actually just get a definition of, of what supply chain is. Um, I don't know, because as I say, I'll ask a lot of dumb questions, but going through that, starting with that, and then we can work into some of the ways we, the kind of the therapy session commence. Yeah. Josh do you want to give your definition first because mine's short and sweet well why don't we do the short and sweet one first or do you want to make me look like a massive overthinker by giving that after well you are a massive overthinker so for me it's everything from you know the ingredient person who's giving you that ingredient right through to the person who takes your product home and tries to work out what to do with the packaging it's really top to tail um and a lot of people don't see it that way when i speak to people um i think josh has a kind of more condensed or concentrated view well i think i think it really depends if you're talking about the direct or the indirect sales chat um sorry direct or indirect supply chain really because you've got the you know if i go and buy a packet of crisps from my local petrol station that's my supply chain it's just the mccoy's arrived on the shelf you know but realistically there's the farmer that that is supplying the potato that goes to a factory somewhere it gets all threshed out and cleaned and cut down and then you've got the frying and then you've got the the seasoning and the packaging and they're all coming from all these various places all around the world to produce this this packet of of mccoy's crisps or whatever it is um and then that goes through distribution and through wholesale and through retail until finally it's going into my gob, right?

3:19That's the entire supply chain in reality and it's a lot when you really start to think about it from the seed of the potato all the way through to the petrol station. Slightly random example there of McCoy's crisps at the petrol station. Yeah, no, no, I love McCoy's crisps. The flame-grilled McCoy's crisps are just... Oh, don't get him started. Don't get him started on McCoy's. If you get a meal deal, honestly, it's revolutionary getting a meal deal. tried the chip shop carry sauce flavor yet because like it is that's game changing no that sounds absolutely delicious well that will be the same again yeah and mns and i know when i got mcdonald's this morning on the way in but the i was i actually went to mns garage and got um they do a chicken bacon sarnie with mayonnaise if you put mccoy's crisp in that it's it's rev it's revolutionary it's a renaissance for your taste buds but the i thought i thought you said that mate was fascinating about the indirect versus direct supply chain what is so so what is the the difference on those two um well i suppose like if we're talking about as a business right so go away from me eating crisps now if you're a business you really just have like a relationship with a supplier right and it might be two or three different suppliers of the you know you could be talking to the people that provide the packaging the people that um maybe even fry the potato in the first place and you've got like a co-packer those could be you know you're three people but realistically you're not normally at least the people we speak to they're not normally the ones that are buying the seeds and sending them to the farm right that's all happening before they their involvement so it's really about like what happens in your sphere of influence and what doesn't um and and trying to track what happens outside of your sphere of influence is like let's be honest pretty much impossible i did i did work at a software company where um that was their their sort of um go-to-market thing was we can eradicate all of the waste in your supply chain going all the way back um and it to actually get visibility on that is pretty much impossible i'm sure somebody's going to prove me wrong at some point and like i'm gonna look really stupid in this podcast but i hope they didn't manage to do that um but really it's just about what's what you're responsible for and what you're not necessarily responsible for i think that's what i mean when i say direct and indirect so people listening to this is kind of direct supply chain what they can actually control and focus on not macro factors like the war or fill in the other nefarious things that are going on.

5:57So let's start with founders are not supply chain experts and the goalkeeper. I think that's a really interesting starting point. And so do you want to just take us through that and how can founders and or supply chain managers work on that or work through that? it's a good question i think if you're a founder right so you what why do you get into business in the first place is because you you have an idea for a really great product really great brand or it's something that you cooked up in your kitchen and you just want to want to show the world you didn't get into business to have loads of conversations with suppliers and pour through spreadsheets and negotiate over price on like you know an ounce of whatever it is um and there are there are people out there that are really really good at that stuff either because they've done it before and they're trained in it um or because they've just got this kind of innate kind of well bunch of geeks basically like me who just really really enjoy that kind of thing and founders don't tend to be that person broadly speaking they they love the brand they love the networking they love all of that stuff um and i think how to kind of get around that i think my my advice generally speaking is just look at the people that you've got you know and and who who is really in that headspace and who gets a kick out with that um there's probably going to be a bunch of people around you that wear a lot of different hats that's what we hear a lot like when we first speak to um any business really that's that's kind of struggling with supply chain um i tend to open up the call would just like tell me who you are and what is it you're responsible for and if we're talking to like a room of five people generally in smb everybody goes i like everything and that's kind of a problem to be honest with you because those people aren't going to be good at everything so i think that my first my first bit of advice is just look at what what those people are good at and the people that are good at um as i said negotiating with suppliers getting clarity on lead times understanding what the costs are um you know maybe with some assistance from people in finance and things like that obviously um just start to carve off like their posting on linkedin and their you know sort of um brand stuff and maybe even their sales responsibilities and just start to focus them in on that if if you're doing this and saying you know looking at the people around you and go actually nobody here is particularly interested in the supply chain or or the purchasing or the production all the costs go and find yourself a supply chain manager because there are some really really smart people out there that have done this before um and so yeah it tends to be when we first start speaking to people they're either all wearing the same hat and they need to start thinking of it differently um or they've found somebody in the business that can step up into that role or it's you know oh this guy's up from you know wherever it is islands yeah and um and that they've they've built that business before and we've brought them in to sort of this out so yeah those those are the two things um that you can do if you find yourself in that position hi there guys super super quick one um i write a weekly newsletter called hungry friday feast it goes live at 8am every friday i'm pouring my soul into this bad boy it's probably my favorite creative ender I've ever done I basically pick apart all the biggest lessons all the biggest learnings from all the wonderful guests and throw it into a feast or a newsletter we've got over a thousand two hundred subscribers come and join the party I'm going to put a link in the show notes it's right at the top and subscribe and if you are already a subscriber please just forward it on to a friend do the amount of favor it would mean the world to me Anyway, back to the old episode, boys and girls.

9:52There's a personality type, Dan, that we find the more we talk to people. And a lot of people I do talk about this personality type and they're kind of A-type personality types. They don't need to have a degree in supply chain management. They just need to be the people that enjoy being organized and following process. It's basically not me or you, probably. Anyone who's remotely creative, It needs to be someone that enjoys following process and enjoys being organized. And I spoke to Ned Neville Rolfe from Sapling Spirits about a year ago. He was like, he's ex-hospitality. And he said, you know, he enjoys being organized.

10:33And he said that, you know, the people who have worked in hospitality often are a really good fit for this role because they follow process and there's a way of doing things. um so yeah he he he says basically don't trust the creatives you need to find an a-type person yeah yeah yeah well i said like jérôme his name's jérôme the um the french man who's well i'm at island's office for people listening to this today um yeah he's he's he's all over there he's all over and um the different personality types is is something but i think what you said there about being a type a is just you need especially in this in the challenge of brand landscape where it's fiercely competitive you need someone who's going to be all all over it let's talk about um go for it mate is your own just out of interest is your own like qualified and i mean that like purely from an education point of view do you go to school and learn operations or they found them on the side of the street no i'm joking um sorry i'm asking you to present his cv i'm just yeah yeah like i don't actually it's a really really good question actually i don't actually know um but i'll ask it's linkedin while you guys carry on talking um so so i want to talk about so so we we've kind of set the premise of okay this is what supply chain is direct you need someone who's type a let's get into this sort of the meat of it and i'd love to know visibility forecasting and kind of demand planning like what are the biggest unforeseen challenges in that sphere of supply chain that most founders don't think about yeah god that's a good question because i think we've seen so much over the last few years right with like i'm gonna sound like a cliche right now but like covid and brexit ukraine and all the rest there are all those macro things that you just literally who knows what the next thing is going to be right um i think that the biggest challenge starting out um in getting good at that stuff is just like gathering data so you you mentioned visibility um like for me that's really really key you can't um manage what you what you're not measuring right so starting out in a in an smb business you're having conversations every day with suppliers about you know how much is this costing and what you know how quickly can i get it and what's your schedule looking like over the next couple of weeks and so on and um i think probably more often than we care to admit we're not writing this stuff down we're not just like recording the the lead times and how they're kind of changing over time we're not recording the price of anything and on the sales side as well this is all related to forecasting you know like how what's my demand likely going to be for the next sort of six nine twelve eighteen months and that's really difficult to say if you're not actually recording any of this so um the the the initial question i think was how do you how do you plan for the stuff that you don't know yet right you can only extrapolate from what you what has happened in the past and i think a lot of the time we just don't know that because we're not we're not recording it we're not logging it um so i think that's the first step really is to do that and so i think you know when you're driving a car right you what you're really looking at is is the road in front of you hopefully otherwise you'll be fucked but the road in front of you and you're looking at the speed and probably the braking that's like it's probably two or three things you're actually measuring but there's a whole myriad of different things you could be looking at as you could be looking at the temperature there you could be looking at all sorts of different things but you just focused on the big three i think with supply chain and actually managing sales data as well is you can get so bogged down in in in the deep like there's so many things to measure that you could end up measuring anything you're just getting discombobulated because there's so much to look at what would you say are the three one to three absolutely like if if you're a founder who doesn't have a supply chain managers who is a one-man band like what are the three things what is your miles per hour your brake speed um for supply chain because i think it can be a you can get a wash in the mess of um semantics it's really two things um and then like almost like a third thing right um rate of demand and the lead time how long is it going to take me to get stuff and how often do i get through it right um the third thing is kind of like sub to both of those.

15:09If you're a manufacturer, there's an extra layer, like you have to go deep on that because it's not just about how quickly can you get it. It's like going back to the McCoy's example, how quickly can my factory get what they need in order to do that? Or if you're manufacturing internally, how quickly can I make something once I've got the ingredients, right? So there is like another layer to it beneath that. But I think really it's just those two things, rate of demand and lead times and the rate of demand um that's where people can get stuck or i'm like that there's a whole um a whole ocean of problems that lurk in that rate of demand tracking and forecasting what are the principles of like actually getting accurate forecasting because that can that can sway sway a business up down and like completely sidetrack them massively and it's not easy right i'll make it sound really easy by just saying rate of demand but you've got you're probably selling online you probably do like events you probably have b2b you want to sell into the supermarkets maybe or even just the more kind of boutiquey deli shops like there's a lot of different data flying at you from different angles and the the rate of demand is going to be different on on all those fronts it's going to be high volume low value over here vice versa over there so like aggregating that stuff um can can be really difficult that that is what we help with obviously but um i think that it's it's a process um as i said you just need to start gathering that data as soon as you can and getting a better understanding of like if we're up over here you know what does that mean over there um the court principles i suppose are um yeah you first of all have to record and then you have to understand like what the seasonality is in your business as well yeah that's something that we talk about quite a lot because um one one business will be different to another definitely in the food space you know you've got that christmas spike and you've probably got like a bit of a summer hill as well um and getting to understand that and then also overlaying on top of that what you know about um what's likely to happen in just like trends with food right if you're in like no low or cbd like is that going to continue into the next year and so on you just start to overlay like the kind of qualitative information that you have through your network and and and so on as well um and what kind of spend you're putting into marketing is another element to overlay onto that as well um just to know like whether or not these trends are going to continue or not it's not as simple as just saying right well last year it did this so next year it's going to do that like no it's not it's not that simple you actually have a little bit of control over that as well you've got your sales people your marketing and so on i was going to add to josh i was um david press who's the ops guy for uh three spirits who are kind of you know functional num and low spirit brand really cool they've got an amazing tiktok following and he he did everything that josh was just talking about um but you know one influencer one tiktok goes spiral and he sold a quarter worth of stock in a week which is a lovely problem to have isn't it but there's no amount of planning that can kind of factor that in there's no amount of seasonality checking that can cover you for that you've suddenly got a you know kick bollocks scramble when that kind of thing happens it's a lovely problem it's a game of it's it can be sometimes i think for new brands a game of chess really in that or not maybe that game of chess the seasonality piece is really interesting especially for small brands when you're starting out because you've got no historic data to back off and it's your first rodeo i remember speaking to um russ and atwell a chocolate brand they're on dragons they do basically fresh chocolates unbelievable so you keep them in the fridge it's like yeah it's it's different gravy chocolate but they went on dragon's den and they couldn't keep up with demand for six, I think it was six, it took them about six months because the people were just like, oh my God, this is wild.

19:15So I suppose you're always trying to, but then on the other side of it is you don't want to buy the stock because then you've got all your cash is in stock. And then, you know, then that can be, I don't know what the word is. What's it when the stock's like kind of like not rotting, but wasting? What's that? What's that phrase? there's slub stock which is slow and obsolete we sometimes we use the word slop we've got lots of acronyms we could go to town on acronyms yeah yeah yeah that's when your cash is like um your cash is in stock that's basically what i'm trying to say um which is overstocking yeah so that that's that's a dance isn't it of balancing the the as you say the demand versus what you're holding holding in because if you don't get the stock and you get the demand, then you're really up shit creek.

20:04So that's a delicate balancing act. And we find a lot of our customers are sort of looking at things weekly these days and have been ever since things went up the swanny from a supply chain point of view. You know, they were maybe doing monthly forecasting before, you know, COVID China, you know, if we look back to that earliest marker of the disruption, the most recent disruption. um one of our uh temple cycles lovely little bike brand quite big bike brand now you know they they went from monthly forecasting to weekly looking at everything everything they could get their hands on every week just to try and better forecast um and and that's all you can do really there's only so much you can do isn't it isn't that right yeah definitely um yeah there is only so much you can do like we're not wizards you know like supply chain managers don't actually have a crystal ball But as I said, good data is the starting point.

20:58I mean, that's something that we do really well, I think, Dan, like just knowing, right, I've spent this much on stock and probably didn't need to over the last 12 months. Let's correct that over the next six months. Where am I overstocking? Where am I understocking? We've got customers that said to us, yeah, I found out that I was spending£100 ,000 a quarter on stock I didn't need to. And there was actually an opportunity over here for me to spend like 20 grand on stock that would sell faster. Well, there I've saved 80 grand and maximized my opportunity. So yeah, that's something that we really try to help with just within the software itself.

21:42But yeah, it's really difficult without that to just know that at a glance, I suppose. You need to pour through a lot of data and then overlay all of those extra qualitative things. like i said you know just to check the assumptions of the data as well it's that simple yeah i like i like the overlaying of the qualitative qualitative qualitative with quality fuck me i had a few beers last night qualitative with the quantitative yeah i like that yeah um because it does add it adds a um a richer texture to it uh oh i have just discovered a secret weapon please please please don't tell anyone this secret weapon helps you get listed stay listed and most importantly grow this secret weapon is being used by absolutely banging brands like bold bean co perfect head neat trip and cheeky panda no wonder they're absolutely smashing it but look are you ready to get your mitts on this secret weapon absolutely smash it too i am thrilled so thrilled to announce our brand new podcast partner north star what is a north star i hear you thinking and authorize a monthly subscription to an online platform giving you access to category data, category insights, anytime, anyplace, anywhere.

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I want to talk about, and also I think what you're saying there ultimately is like what what gets measured um measured gets managed and um i think a lot of brands as they say they don't want supply chains is not sexy let's not make no bones about it um so it can be easy to speak like i want to focus on getting the big listing or doing the brand activation at london coffee festival or fill in the blank not oh where where where where we measure measuring um what we're measuring and how we're managing the kind of the boring stuff but if that frees up 100k well then suddenly you can go and do a fucking banging activation or do an atl campaign all the fun uh creative bits i want to talk about create um supply chain has a direct effect on margin and the guests i've interviewed over the last uh six weeks or so some of the big guys giles brooke um john from biome they've all said that like now harder than ever is is you've got to have margin to play with um giles says minimum 35 40 margin after you've after he says there's a thing called true gross margin which is again you can founders if they want they can kind of light themselves about what true gross margin is because you can not factoring this is in retail like not factoring your promo spend not factoring your media spend not factoring your um you know any other kind of sampling or cost of business and you think you've got a way higher margin than you actually do and then when it comes down to it it's like oh fuck there's bugger in the pot the other side of this where you can kind of gain margin back i suppose is on the supply chain side of things and there are you know even if this is one two three percent increments you do them enough they compound i'd love to get into some of these so with everything you guys know with all your kind of brands you speak to what are some of the ways people can claw back margin um through supply chain yes great question um i think that one of the big things is just looking at i mean first of all you need to buy in bulk right and that's just a really really simple answer um don't be buying you know really small quantities frequently um because you want to keep your cash flow low you know make make the decision on what's going to sell and really commit to that at least in the short term um and just start thinking in those terms um you know be prepared to invest in large quantities of stock um where you can see that that's like that's going to be a winning strategy um and yeah be prepared to fail on that front because that stock will cost you less um overall than if you had sort of like trickled for a little bit you know um so i think buying and buying in bulk is really important i think brian he's probably got a couple of bits to say on that because i know that that's come up in a fair few conversations you've had on your podcast right brian i think for me like yeah buying in bulk is is really key and um and just being really careful about how you attribute costs as well um the because there are so many different costs now shipping duty import tax um and knowing where it's coming from and where it's going to is really difficult actually it's really really hard and um it's funny the amount of times that we speak to businesses and just ask them like you know do you know how much your your salt costs yeah yeah absolutely okay well where are those costs coming from like well you know it's what we pay our suppliers and you know quite often these days more so than before um it's the amount we pay in freight like okay what about this oh yeah we we don't count that as cost of goods that's a cost of sale what about that that's also just an overhead um but in reality like they're all getting to the end of the financial year and sitting down with their accountant and going like what do we what do we spend all this on duty yeah okay cool but like where like where are we putting that how are we actually factoring that into the the the margin on each of these products because some products will be duty free and others won't so you know just just trying to get a handle on that stuff can be really really difficult um that's something that we we help with a lot i think um when you talk about like marketing spend and things like that we we do tend to think of that more as just a cost of sale and a cost of growth i think for us the really important thing is cost of goods sold um and i suppose that that's where you start like a whole philosophical yeah sorry to sorry to interrupt yeah so so um in terms of clawing back margins we've got obviously buying in bulk i think the attribution of of costs um like what's actually going in into your cost of goods could you could you define cost of goods and define everything that goes into it because i think as you say things can wander around on the pnl like what do you think should like what the things that absolutely should go into the cost of goods yeah good question i think it really the simple answer is anything that you spent money on to get that product into your business to bring it into your org and that could be anything right but marketing like to use your example would be a cost of sale your social media spend that's the amount of money it costs you to win that sale it's very different from cost of goods um so yeah it's it's anything you want to list them out do you want to give us an josh give us a nice list like so ingredients packaging import tax freight um the amount of time it spends on the water um that that's all the cost of goods and with everything you know like what are some of the other hacks in terms of the speed going through through the warehouse and stuff like that like the efficiency what are some of the other efficiencies people can focus on to begin to claw back some margin it's all about talking cash caught up in stock aren't you in a way yeah basically like i again i'm not i'm not supply chain doesn't exactly float my boat but um i'm joking but as in it's um i don't know what you're talking about um the the as i'm not i haven't worked closely to it if i'm being brutally honest it's just kind of been through working in these in these brands and understanding it but one thing i've heard a lot is the speed of of stock going through is a great way to get efficiency so i'd love you to please talk about that yeah so we we are actually about to start doing some really cool stuff in this area um but i think that the the key thing is if you're a manufacturer um how long is it taking you to make stuff right um so the the time it spends in the production facility the time it on the water um that's already key stuff right and and it may be just as simple as looking at your freight forwarder and saying like can we can we get it here any freight forwarder sorry yeah freight forwarder so the guy the guys that just send the massive container ships basically it's like a courier but like on steroids basically um so you know is the logistics company that could get this to me quicker but you know potentially cost me a little bit more i need to drop a bit more money at the front door but like it's going to get to me a lot sooner um that could be a more efficient way of working um and particularly when you're working the short day stock but it will give you more opportunity to sell right um so that's one way that's one thing you can look at another thing is the warehouse itself like is my warehouse actually set up efficiently do i have things in like you know bin locations bin location being just a spot on a shelf where that product lives um it's amazing to me how many businesses manage to scale without actually just sitting down and drawing a map of their warehouse and saying right okay well let's put this over here and that over there and then that way when an order comes in we know where we're going right um far too often you just haven't taken the time to sit down and think that stuff through um and then yeah labor time spent producing stock is another really big cost um and if you can if you can increase efficiencies in that area then yeah i mean you know time is money right so i think it's a really good point oh my god i am so so so excited it feels like hungary is finally swimming in the big leagues i can't believe this it's absolutely mental but delighted to announce that big fish yes big fish are part of the podcast perry's been on the podcast three times listeners absolutely love it some of my most downloaded and cherished episodes of all time but big fish behind literally so many brands in your cupboard in your weekly shop charlie biggan year valley tyrells clipper tea goo rana i mean make the list is longer than the river nile but they also share risk and invest in brands that they really believe are a force for good that brands that they believe are going to be the next big thing like how the snack that gives back but even more exciting news big fish want to speak to the next wave of small challenge of food and drink brand is that a desks in for big things the raconteurs the movers shakers buccaneering visionaries so look if you want to speak to big fish and just have a chat get your brand in front of them then drop me a message my mate louis from local beer amazing beer was in their office aka la fish bowl uh last week chatting to perry freddie and the big fish crew so drop me a message if you would like to speak to boemi our beloved sponsor are helping build the fastest growing challenger food and drink brands look if you're a small brand just starting out and need your first indie stockist your first hundred stockist to wholesale boemi are the platform to categorically speed that up but if you're a big brand wanting to get bigger boemi are also insane they make field sales marble smooth silky slick they're just epic ollie's ollie's been on this podcast twice actually they saw a 29 uplift in sales when using boemi to check major malt listings availability insane 29 % uplift by downloading an app Insane Lucky saying My boy Aaron Duff Who's come on this podcast In a couple of weeks He uses it to manage A team of 30 people And they've Lucky saying Have unlocked 500 draft listings By using Boeing Me Look you've got to get involved With this stuff It's absolutely insane And it will categorically Change your life It's just the sickest platform I use it all the time At Ireland Well I was just going to tell you A little bit about Some of our latest findings We run a quarterly Something called We've called it Manufacturing Health Index but we've been running it for about 18 months now.

35:26And it just tracks about 16 sectors across three of our key markets, UK, Australia, New Zealand, and it gives you the kind of – we look at key performance indicators in this kind of big data set, which is lead time sort of overstocking and something called GM ROI, which is basically an indication of profit per pound of stock you hold. So we bundle all this together and have a look at things. And our latest results for Q4 last year, so running up to Christmas last year, they were really buoyant, like lead time to down. People are bringing their stock down for the first time in a long time. And many of the sectors are up quarter on quarter by.

36:17So the GMRI is about£2.33, if you look at that. The food sector, on the other hand, and we've spoken about this before, Dan, is flatlining. So it's at like£1.44, and it was£1.44 last quarter, and year on year it's down 4p. So that's the GMROI metric I'm talking about, and that's profit per pound of stock that you're holding. So what we're seeing is the food sector, not beverage, but the food sector in particular is sort of is playing the secure game and holding as much stock as they were when supply chain was really, really turbulent. And, you know, we're trying to obviously being asked why that is.

37:00And I know you've got your thoughts on it as well, but they're just sort of playing that safe game. But, you know, their profits are being harmed because of it. you know cash is held up in stock and it's probably being held up because they just things are uncertain and they just want to make sure they've got that stock there and they haven't changed their stock holding since things were really bad i know you've got some thoughts on why that is too yeah i mean i think it's a it's a culmination of um i think we talked about it in that grocer piece which was wicked we managed to get in there but i think from what i've heard from speaking to so many guests is it's i think giles called it the three did he call it three c's it was wait it's basically the war war in ukraine that's sent the cost of living crisis um covid that's two c's maybe two season of you um but it's it yeah he was saying the the kind of the amalgamation and um the kind of the melting pot of those issues is causing the massive squeeze on everyone um and then obviously you've got retailers who are brands having to put through cross price increases retailers don't want to accept it or can't accept it um which is is hampering brands massively i think john walsh from biome even said like look this is this is probably one of the hardest times to to build a brand um i'd love to talk about what are some of the other kind of watchouts that most people don't think about with with supply chain as as as a as a challenge of food and drink brand because what i do think is fascinating from that report bry is how um you know food is flatlining versus everything else versus the other industries you work in um so yeah specifically about food and whoever wants to take that can take that i think it's probably worth saying it's still a positive news story because when you look at the last the last index report we did i mean i'm not going to be able to to remember all the stats and i wouldn't want to misquote ourselves but the um every industry margins falling lead times rising and what we're seeing now is margins regaining and lead times coming down a little bit but food is the outlier in that it's gone flat.

39:21Now, that doesn't necessarily mean that food is just, you know, a disaster area right now. It just means that it's not been able to regain that ground as quickly as other industries, right? I suppose the next thing we're likely to see is the Red Sea and everything that's going on there. We've definitely had a lot of conversations anecdotally with businesses. The Red Sea? Yeah, just the whole conflict. Should I know that? Oh, sorry. Wagwan there. I'm in the Red Sea. Yeah. Yeah, I mean, it's really weird, isn't it? Because like just stuff happening on the other side of the world and it makes such a big difference to, you know, to profitability and all the rest of it.

40:03Just everything that's happening over in Gaza, you know, there's a lot of conflict in the Red Sea region and it's a really big like travel strait for international commerce. Shipping lanes, yeah. So yeah, a lot of shipping lanes coming through here. It's the new Suez crisis, right? right yeah serious questions it's the hooty rebel stuff you know they keep trying and board ships and i didn't really so i didn't realize that how that as you say so i didn't realize that was there was a shipping route through there yeah i didn't realize that which is and it's wild how something like that can actually massively have ramifications over here hi guys super super quick one so so excited look for years i've been badgering on about hungary the podcast you're probably bored to death thanks for putting up with me but hungary is also an agency and we look after one amazing brand called islands chocolate we've had a great time over the year we've won listings at a load of wholesalers we've got milk and more we've got our first grocery listing coming very soon which is very very sick but what i'm thrilled to announce is hungary's merging with hc consulting um my boy harry clark and his wonderful team he's an absolute g they do brand strategy new business business and account management but why i really love working with harry and why we've got on so well over the last couple of months is harry was actually the founder of the boozy isolate brand pops he's been in the trenches he's grafted his face off he's had the sleepless nights he's had the turmoil he's had the triumph he knows what it is to be a founder he is a founder and he's got a proven track record in grocery and out of home holy moly dips the gut stuff savile drinks remio gelato So if you're a brand and you're stuck, you're looking for new business help, you're looking to scale, drop us a message.

41:43We'd love to chat. Thank you so much. Back to the old episode. It's crazy. We were talking in preparation with this call, actually. We've been talking about, we're fascinated, obviously, by supply chain and the pressures on supply chain for years and years and years. And all of a sudden in the last two years, Josh, we've become kind of center of the conversation. and we've suddenly become, you know, interesting. It was kind of wild, wasn't it, for a bit there? And it's sort of gone away now, if I'm being totally honest, now that we've all unlocked and gone back to work full time. It's kind of gone away.

42:22But the world, because supply chain was at the centre of conversation for a good couple of years there, you know, Guardian were putting out, like, video op-eds about, like, what even is just-in-time manufacturing, you know? and we were sitting there thinking we live and breathe that that that whole conversation kind of died down as lockdown started to lift and i think there's just an impression generally like when i speak to people that aren't like living and breathing this really nerdy boring unsexy world like me and brony are um that that's still like the status quo and there have been some really encouraging things that have come out of that that health index um but um yeah the the stuff in the Red Sea is kind of like all popped off post that data that we gathered, I think, is that right to say, Bryony?

43:10So it could be like a wash this face for now. Yeah, so in the next few days, come April 1st, we'll pull the next set of data. We look at about, we've got two and a half thousand businesses that we've pulled the metrics from. Well, Well, I think it's going to be really positive. The rumor is that Q1 is going to be positive for a lot. So he's hoping that we'll see that food is no longer flatlining, but picking up a little bit with things getting a little bit more. What are you specifically measuring in these reports? What are you asking or how are you getting there? Yes. So what we do is we pull sales information, order information, lead time information all the things that our software helps you i suppose monitor and measure we we pull it all obviously it's completely anonymized and and look at different sectors different countries different regions and it is like lead time whether people are overstocked because obviously we've got software that can granularly tell you where you're overstocked where your red zones you know what's so what's selling slowly um and you've got too much stock of it so we'll pull that information alongside you know profit profit information what we call gmr gm roi which i've got our points now um but yeah how much profit per pound stock you're holding um and that all those kind of stats and mash it up into an index uh that we run quarterly and it just gives them it's a it's a really nice way it obviously helps the team as well like when we're talking to customers from certain sectors you know it really helps us to know where they are what what their what their climate's like um you know how they were doing quarter on quarter year on year from a performance point of view the pressures that they're under and obviously most most sectors now of the 16 that we monitor are kind of bouncing back leave times are down over stocking is less um profit is up um but as i say um you know food is still struggling and you know Most of that's down to inflation.

45:17But like Josh says, and everything we've talked about in the last hour, what happens next is very much nobody knows what will happen next. We're seeing a lot of our customers doing clever things. So to get around Brexit, they're opening up a warehouse in Europe or Ireland, and sometimes they are nearshoring products or they're pivoting and making different products that require things from different areas. we've got customers in Scotland who provide products for wind turbines and that kind of thing. And they've changed 50 % of their model from providing a completely new filter, for example, to taking the old filter away, refurbing it, and giving it back to them.

46:03So there's a lot of kind of circular economy stuff going on to try and work around all of these problems that are going on in the world. They would normally get ball bearings from Ukraine and Germany, but they're no longer getting them from Ukraine or, sorry, Russia. They're getting, you know, they've changed their supplier. They've changed the way they do things to try and better meet the sort of macroeconomic issues that are going on. So it's fascinating. We're in a really privileged position, and Josh and I, obviously, we've been here far too long, and we love what we do. We love the fact that we're helping these challenger brands.

46:40And right through to these really kind of smaller family firms who are working with industrial machinery or, you know, raw materials while they're in the green energy space. It's a very privileged position. No, it's endlessly intriguing. And as you say, why I kind of love, you know, I've got this in front of me now, Ireland's like the journey to get to this. for me to stuff this in my gob like relentlessly like i do like you see that one button but like all the scenes like we've got pictures of saint vincent up here like the whole journey to that one thing is just i think it was stewart forsyth from minor figures we were talking about like what what he loves about coffee is that a cup of coffee is is he said coffee is a cup of coffee coffee is culture like because ultimately like the caffeine and you're we always meet for coffee ideas spread and whatever but he also was like when you when you see that there's a whole kind of supply chain and story that goes into that one thing um the final thing i want to sorry just i just want to like you the story of islands i really do want to get i would love to talk to one of you guys on my podcast but the story of islands is very unique in that you're bringing something and producing something on like literally what i know that you might be branching out to another island of good but literally one islandst vincent and doing most of the processing there and employing a lot of the people there and then it obviously being some amazing products i can't tell you how amazing it is um and supplying restaurants over here that are michelin accredited and that kind of thing it is a really great if you're looking at a modern day supply chain story you know that's up there second to like hewitt jeans or something like that it's a really fascinating things to be involved in what i find the supply chain is the marketing really and truly um so we should be asking you how to do it um let's wrap that up there i've loved that guys i think it's been so interesting just understanding what some of the ways people can just get efficient um callback margin i think as you say just just what gets measured gets managed and i think this having the discipline to really put what actually is the cost of goods into the cost of goods.

49:07The speed of getting it through. Sorry. Go for it. I was just going to say, coming right back down to the beginning of the conversation, it's having the right person do this and there are so many people that we talk to. If you have the wrong person in this role, it will not end well. Yeah. And the only other thing I was going to say, I wish that I'd had time to say earlier is that, you know, we're just software people at the end of the day and data is just data. But if you have that right person in that seat, it's just it's them that's going to make the decision. We're really, really careful to not like build a tool that just automates the hell out of your business.

49:48You know, the first thing that you know about buying some stock shouldn't be it arrives at the door behind you. but you should at least be able to look at your systems and know what to do without having to check with five different people in five different offices around the country right um so that that's what we're all about it's just the data but at the end of the day yeah we're not the ones you know your business wicked thank you guys and um yeah i'm super grateful for your time this morning really appreciate it thanks for having us Dan thank you so so much for listening to the podcast I really really do appreciate it if you liked that episode only if you liked it please do give it five stars subscribe tell all your friends families foes next door but one cat dog whatever please tell everyone about this podcast it means the world to me and I really want to understand what your pain points are as the new wave of of challenger food and drink brands, please do hit me up on LinkedIn, search Dan Pope, and hopefully we can together create a more meaningful and powerful podcast for the next wave of challenger food and drink brands.

50:57Thank you so much.