There is no disputing that Christmas is an exceptionally lucrative time of year for many food and drink companies looking to cash in on the overindulgence that is common during the festive period. This month Asda will sell in excess of 150m brussel sprouts and 750,000t of Christmas puddings while Tesco will sell around 72m mince pies. Manufacturers such as Thornton's, whose sales at Christmas account for around 35% of its full-year sales, will also be very busy ensuring production meets requirements.
Yet while the time of year is a 'golden quarter' for manufacturers and retailers, it can also be quite a headache for companies needing to recruit extra staff to cope with the dramatic rise in production, says recruitment specialist Albemarle Interim Management.
According to Albemarle, just over half of the manufacturers it approached expected a higher than average increase in sales during the Christmas period. As a result, 72% of these manufacturers said they were reliant on recruiting additional labour.
The survey also found that in many cases companies were significantly increasing their workforce over this period. While 41% of companies will be increasing staff numbers by 10%, 32% of companies said they were boosting staff numbers by up to a third. A further 17% of companies said they intended to double the amount of staff over the Christmas period.
In most cases, production is the area in which companies require additional staff, says Albemarle, with 76% of companies recruiting into this area. Logistics and the supply chain are also a major consideration for companies, with 19% saying more staff were needed to ensure product reached the shelves.
Elizabeth Shaw Chocolates is one such company that doubles its staffing levels in production over Christmas, which is traditionally its busiest time of year. The company claims 10% of the mint chocolate market and 50% of the chocolate liqueur market, with an annual turnover of £15m. During the Christmas period it sees sales grow by over 500%.
In Elizabeth Shaw's case, the company conducts meetings with the retailers as early as July to forecast what demand will be and then deals with a recruitment agency to ensure the supply of staff. The company needs so many extra staff because, while its products have a long shelf-life, retailers insist on having 75% of the product's shelf-life on delivery, so much of the production has to be done in the immediate run up to Christmas.
However, not all companies find staff recruitment so easy. Richard Elmitt, factory manager at South Caenarfon Creameries, Wales' only farmer-owned dairy co-operative, says that sales increase by 10% during Christmas but the business is unable to rely on additional staff because it is situated in an area of low unemployment.
"Unemployment is less than 10% in the area, which means a limited labour pool," says Elmitt. "Alternatives to increasing headcount focuses on increased overtime and more production lines."
Finsbury Food Group, which owns luxury cake manufacturer Memory Lane Cakes, has also had employment problems in the past. Christmas is traditionally a profitable time of year for Memory Lane, but last year it failed to recruit sufficient staff. The subsequent shortage in labour led to "significant manufacturing inefficiencies in the months prior to Christmas" and was one reason for the company's lower than expected profitability that year.
The problem, says Albemarle, is that while for some companies Christmas throws up the same difficulties and can be quite predictable, it can be the opposite for others.
Elizabeth Shaw md Malachay McReynolds, for example, says that while Christmas is a busy time for the company, it has the advantage that it is relatively predictable. "Christmas always happens," he says. "It has a consistency about it, unlike the summer for ice cream producers, so this helps."
Nigel Hunter, md of sandwich and salad manufacturer Buckingham Foods, also reckons he knows what to expect each Christmas. "Sales increase during the three to four weeks before Christmas, but also decrease from the 10 days after Christmas Eve through to New Year," he says.
"The key issue for sandwich manufacturers is the level of additional costs in the factory from extreme order volatility, which reduces productivity, generates overtime and causes ingredient wastage from items going out of life before they can be used."
However, for producers such as those of brussel sprouts, the November and December months are less predictable. While producers will experience a large rise in demand, production is still very dependent on the weather, which dictates how much extra labour they need.
Although much can be harvested by machine, if bad weather has blown the plants over the grower has to then revert to a manual operation with the need for more labour, says Albemarle.
Its survey shows that being able to cope with the unexpected through effective planning and production was cited by manufacturers as the most critical factor in ensuring increased orders were met during the Christmas period. The second most important factor was ensuring they had sufficient numbers of staff, followed by ensuring they had a good relationship with retailers. They also need a robust supply chain and sufficient raw materials.
In areas where staff may be hard to come by, or where there may be skills shortages, interim management may provide an answer, says Chris Bernard, head of food and drink professionals at Albemarle.
"Interim management is about providing additional support or new expertise at a time of change," she says. "For companies that need to deliver two, three or four times their normal capacity, this puts a strain on the management team to deliver. Interim managers are focused trouble-shooters; there to get results and make a positive impact."
Interim manager John Wrench agrees. He says interims are regularly used over Christmas because it is a time of the year when a company can't cope if it loses any of its management staff.
"I am often called in to help with the Christmas campaign," says Wrench. "Nine out of 10 assignments are when there is a management change or shortage. In a normal month clients can usually cope if they are one down in their operations team -- but not during Christmas."
For full results of the survey call Albemarle on 0207 079 3737 or visit http://www.albemarleinterim.comFM