The move was designed to address the huge challenges facing the global supply chain and focus more on importing ingredients and other foodstuffs.
The new facility will offer chilled storage, distribution and pre-retail services, handling more than 25,000 pallets a week. According to NFT, which already handles 120,000 pallets each week, it will provide big cost and speed efficiencies, reducing food miles, increasing shelf-life and sourcing options.
“We came to the conclusion two or more years ago that the UK market in terms of warehousing and distribution and some of the core activities that we provide was almost being procured to death,” said Dale Fiddy, NFT sales and marketing director.
“There aren’t, I believe, the amount of opportunities to significantly shave off the price of this offering if we are just going to focus on the UK. The only way to unlock the potential that the major multiples are crying out for at the moment is to extend the scope of what you are doing and to take you're your whole proposition onto an international level.”
The launch coincided with the publication of an original piece of research commissioned by NFT from market research firm England Marketing to flag up the challenges facing the sector. This found that food businesses recognised the UK’s increasing dependence on imports, which would necessitate a “radical rethink of how we manage our food supply chain” since the current set-up was “no longer fit for purpose”.
£38bn a year
According to the report, imports already accounted for almost 50% of the food we eat, worth around £38bn a year. Other reports have suggested the UK’s dependence on imported food was likely to increase.
A quarter of respondents to the survey said the biggest challenges facing the UK’s food supply were high transport and fuel costs. But equally, they raised concerns about low prices and profitability (25%). Around 60% claimed “end-to-end supply” was the answer to their logistical problems.
Other challenges uncovered were centred on the threat posed by competitors (13%) and concerns over the level of power held by the retailers and their demanding expectations (12%) — exacerbated by entry to the UK retail scene of hard discounters Aldi and Lidl.
Some 53% of respondents also feared that price volatility would have a big impact on them over the next five years, particularly as competition for food across the globe increased.
“By identifying and fully understanding the challenges our customers and the industry, as a whole, face — we have been able to channel our investments into resourcing developments that will offer the greatest efficiencies in both time and money,” said Fiddy.
“We have invested heavily to provide a facility that will meet the needs of our customers in a flexible and sustainable manner. NFT Tilbury represents a chilled logistics facility that’s unique in the UK.”
NFT currently delivers £11bn of food products (at retail value) to UK retailers and manufacturers each year. The new Tilbury distribution operates over 21,368m2 of space and can handle a throughput in excess of 2.5M cases each week.
When the Tilbury project was originally announced in April last year, it was expected to create about 500 new jobs.