In pole position

Consolidation, investment and automation has boosted frozen food firm Ardo, reports Hayley Brown

A £15M investment has seen frozen fruit and vegetable processor and packer Ardo consolidate all of its UK operations on to one site in Charing, in the process getting rid of its other plant in Kent at Headcorn.

"It made sense to consolidate our UK operations. The move from working on two sites 10 and a half miles apart will deliver many benefits, and will save both time and energy," says Simon Baxter, marketing and innovation director at Ardo UK. "It has immediately taken over 80,000 miles per year off the road, for example, which is good news for us, considering that the price of petrol is only going one way."

The new and improved Charing site was officially opened at the end of March. Among a number of improvements, the £15M investment has allowed for a new cold storage unit at the site, which will benefit from 5,000 more pallet spaces up to 20,000 in total.

The extra capacity has meant that, for the first time, Ardo is offering cold storage and distribution to third-party customers. "This also helps us reduce road miles," adds Darren Schlosser, technical director at Ardo UK, "because if we work with external firms, they can use our cold storage unit and then we can distribute their products alongside ours in full delivery vans." It currently shares some of its delivery loads with a major UK retailer and is in talks with a leading ice-cream manufacturer to share delivery space over the summer.

Ardo has also installed a new packing plant, with five palletisation robots and other automated materials handling equipment, which has doubled the capacity of its previous operations from 25,000t to 50,000t per year.

"We were that restricted, we couldn't even go out looking for new business working at our old capacity," says Schlosser. The newly installed packaging system allows Ardo UK to pack in pillow bags, stand-up bags and punnets. As well as single fruit and vegetables, it can pack mixes, corn on the cobs, rice and pasta with the addition of sauces and seasonings.

"The new factory is state-of-the-art. It is certainly the most modern of its type in the UK and, I daresay, Europe," adds Schlosser. "It is an enclosed system that means neither product nor production staff have to step outside the facility the product spends a minimal amount of time between cold storage periods and maximises efficiency and safety. There is also minimal handling on the lines and, technically, it delivers a better care level than is essential to enhance our customers' products."

Difficult times

Despite this positive news at Ardo UK, the last year and a half has not been a breeze. Ardo buys most of its fruit and vegetable ingredients for single packs and mixes from Europe. "The poor exchange rate has meant that our raw ingredients costs have gone up by around a third," adds Baxter. Over a quarter of the site's green vegetables come from The Netherlands, its onions come from Poland and peas are generally from Southern Europe.

The site also imports fruit from South and Central America, which is bought in dollars. On top of this, Ardo UK has also lost out from bad harvests and freak events, such as the recent earthquake in Chile in which the business lost a container of blueberries which were left sat at a South American dock for five days.

In response to such risks, Ardo has set up a new group treasury at its centralised office in Belgium. The aim of the newly created department is to help the company financially protect itself and hedge against risks associated with poor harvests, natural disasters, unfavourable exchange rates and escalating energy and distribution costs.

"Finance has been very tight. We were extremely lucky to push forward the £15M investment plan at Charing. I think that, if the recession had hit earlier, then the investment may have been put on the back burner," continues Baxter.

The tough economic conditions have encouraged best practice, however, as Ardo UK has taken a critical look at the factory's efficiency and has adopted a number of lean manufacturing techniques. It has done this in a bid to stay competitive and reduce costs.

It has invested money in hand-held portable data collection terminals (PDCT), for example, which offer improved diagnostic information to help the company reduce downtime, human error, waste and other eventualities, which impact on productivity. The devices collect factory data, which can then be analysed. Until now this has not been possible using existing paper systems.

The PDCTs cost around £40,000. "We have been working with IT provider Vision For Food to write the systems so that they are specific to our factory," says Schlosser. "They will prompt users to take ownership and record vital steps during processing from accurate recipe weighing to health and safety procedures.

"The use of these devices also helps the hazard analysis critical control point team to demonstrate full compliance to optimal food safety and traceability. This is just one of the ways in which we intend to become more efficient and more competitive to help us through these challenging times."

The 'ethical pound'

Although Ardo UK is going through a challenging period, as is common among many manufacturers, the impact of the recession has not been entirely negative. According to Baxter, people are buying more frozen foods because "they are eating out less, frozen food is perceived as good value and consumers are trying to waste less food".

Frozen food is also slowly starting to lose its negative image because of the You can be sure it's fresh it's frozen campaign, led by the British Frozen Food Federation, as well as Delia Smith cookery programmes, he adds. But the one of the biggest trends that Ardo anticipates will gather pace, is ethical food for value.

"This is a mega trend, which is set to stay," says Schlosser. "With fruit and veg, we think consumers are interested in ethical purchases but, at the moment, we don't necessarily think that organic is the right route in the UK. Consumers are unsure about the benefits of organic food. They don't know if it's healthier or if it's tastier there are still a lot of question marks. Because there is so much uncertainty, they ask: Why should we pay extra?"

So, Ardo has opted for the "inbetween option". There are alternatives to organic certifications, which are not as costly to adhere to but offer the consumer a promise that the food has been produced in a sustainable and environmentally friendly way, Schlosser says.

For example, the spinach, green beans and sweetcorn that it supplies to Waitrose are certified under the Linking Environment And Farming (LEAF) banner. LEAF is a charity that supports sustainable farming. It is an advisory board made up of some 30 members representing government, farmers, retailers, environmental and consumer groups, as well as industry bodies.

Ardo UK is working with its suppliers to add the certification to some of its fruit lines. It is also considering producing the first frozen Fairtrade fruit or vegetable products, "but this would be far off in the future".

This is all part of the plan to capture the "ethical pound", he says, but although Ardo UK is working with The Carbon Trust to reduce energy usage and improve efficiency, it will not be looking at adding carbon labels to products.

"We will not commit to any expensive, complex scheme until we know that it is of benefit to the consumer. At the moment, however, we feel that consumers do not understand carbon labelling so it's not something that we are currently pursuing," Schlosser adds.

"Our biggest aim now to make our current operations as efficient as possible to secure the long-term future of Ardo in the UK."

Key Facts

Ardo is the UK arm of a Belgium-owned company based in Ardooie. Overall, the company employs over 2,500 people at 15 packaging, processing and distribution sites located across eight countries in Europe.

It produces frozen vegetables, fruit, pasta and rice for a variety of markets, under the Ardo brand as well as under supermarket own-label.

The Ardo brand includes: the pre-cooked Express range; the organic Bio Organic range; Classics; the A Table range for foodservice; and Les Tapas, which are processed vegetable snacks.

In 2009 the family-owned company had an annual turnover of around euro 557M, selling around 521,000t of product in that year. This is the equivalent to filling Wembley Stadium twice, according to company estimates.

Ardo UK produces fruit and vegetable products for customers, including Tesco, Sainsbury, Waitrose, Aldi, Aunt Bessie's, New Covent Garden, Pasta Reale, Kerry Foods, Pizza Express and Whitbread.