whitepaper meltdown in the uk supply chain

W H I T E P A P E R

Meltdown in the UK Supply Chain

What went wrong and why? And what lessons can be learned

in the aftermath.

Contents

Chapter 1Just in time

Chapter 2 KFC runs out of KFC…

Chapter 3How did the UK’s supply of CO2 go flat?

Chapter 4When horsemeat was found in burgers

Chapter 5Listeria shows up in sweetcorn

Chapter 6The great heatwave of 2018

Chapter 7What lessons can we learn?

3Meltdown in the UK Supply Chain: What went wrong and why?

The core principle of JIT is to enhance efficiency by eliminating waste. In 1987 Toyota’s Fujio Cho said waste was “anything other than the minimum amount of equipment, materials, parts, and workers, which are absolutely essential to production”.

It’s a strategy adopted across a variety of supply chains, from cars to pharma. But it’s particularly well suited to food and drink.

Fast moving consumer goods are called that because they fly out of stores, so a constantly moving supply chain is essential to meet consumer demand. But food and drink is also naturally perishable, so the quicker it moves from a production facility to the supermarket shelf, the better. Both these reasons make JIT the perfect fit for the FMCG supply chain.

Of course ambient food or other popular FMCG products like laundry powder or washing up liquid have a completely different shelf life, so technically it doesn’t need to move as quickly through the system. But holding stock would require additional warehousing meaning additional expense. And if JIT operates smoothly, there is no requirement for it.

It’s much more efficient, and therefore cheaper, for retailers to accurately forecast consumer spending patterns and, based on that data, determine how much product is required on a day to day basis.

So avoidable excess represents avoidable expense. Consequently, throughout the UK food and drink supply chain, the principle of JIT is deployed. Factories have the storage space to handle around 24 hours worth of production, as do supermarket depots, and the space ‘out back’ in the supermarkets themselves.

It’s why the government’s proposals to stockpile food in the event of a no-deal Brexit have gone down poorly with the UK food and drink industry. Not just because that’s not how the system currently operates, but it’s not how it’s equipped to operate either.

The myriad complications of a no deal Brexit aside, fundamentally, if it works as it should, JIT maintains minimal stock levels, reduces wastage and, ultimately, cuts costs. But its efficiency is also its nemesis. Even a minor disruption can create a ripple effect that magnifies as it widens.

An infamous example took place in February, when an ill-fated decision by KFC to switch suppliers led to a nationwide shortage of chicken at the UK’s biggest chicken shop. And it’s fair to say the situation left KFC in a deep fried flap.

Chapter 1Just in time

The UK food and drink supply chain is a dynamic model of speedy efficiency. It operates on a system dubbed ‘Just-in-time’ (JIT) that originated out of the Japanese Toyota car factory in the 1950s.

Even a minor disruption can create a ripple effect that magnifies as it widens.


#KFCCrisis started trending on twitter and the nation scratched its head at how this was even possible.


The tabloids had a field day. #KFCCrisis started trending on twitter and the nation scratched its head at how this was even possible.

Some customers were so irate they dialled 999, causing the Metropolitan Police to tweet: “Please do not contact us about the #KFCCrisis - it is not a police matter if your favourite eatery is not serving the menu that you desire.”

At first, presumably because it expected the disruption to its supply chain to be a hiccup rather than a total collapse, KFC played it light. “The chicken crossed the road, just not to our restaurants,” said its website. “Getting fresh chicken out to 900 restaurants across the country is pretty complex.”

Of course it is. But KFC hasn’t suffered anything like the total meltdown to its supply chain that it experienced in February since Colonel Harland Sanders first sold a fried chicken in 1952.

Various estimates put the cost of the disruption at £1m a day. Rather than a typical store finder on its website, KFC replaced it with a ‘which of our stores are open’.

Those that were open were only able to offer a severely limited menu. Store managers were seen stocking up in supermarkets. Wholesaler Booker

stepped in as a short term supplier for others. Iceland and Quorn trolled KFC on Twitter, lorryloads of fresh chicken had to be scrapped, and a week into the fiasco a KFC spokesman said it was “still evaluating the root cause of the disruption”.

Six weeks on it was still struggling, with some outlets remaining closed and others still only able to offer a limited menu which varied from branch to branch.

To its credit, KFC won praise for its marketing during the crisis and the resulting publicity had the UK licking their fingers in anticipation of a time when they might be able to order a mighty bucket again. Anecdotally there was a surge of business when KFC was finally able to fling open its doors and start frying.

But this was not an experience KFC would ever like to repeat. And when it wasn’t trying to be funny, KFC’s press office was muted.

“There was a fundamental breakdown in the implementation of a brand new distribution system with our new delivery partners DHL and QSL,” it said. “Our focus right now is on getting back up and running.”

Chapter 2KFC runs out of KFC

How much worse could it get? On 14 February, a catastrophic series of events saw KFC run out of chicken and shut up shop days later. At the peak of the crisis 646 of its 900 restaurants were forced to close.

Various estimates put the cost of the disruption at £1m a day.


KFC is just operating on the JIT principle like so many others, for good reason. But unless it works like clockwork the whole thing falls apart.

There were many reasons for the chaos that engulfed KFC in February but it started with the decision to switch from its longterm supplier of eight years, foodservice giant Bidvest, to DHL and QSL. But days after the new system went live it created disruption on an unprecedented scale. Fingers of blame pointed in several directions. Chiefly, that as a result of the new supply chain arrangement, KFC would be attempting to deliver fresh chicken to its 900 store network every day from a single central depot in Rugby, a decision condemned as both widely ambitious and woefully naive.

In fact, it’s not uncommon for huge UK-wide businesses like supermarkets to service their entire UK store network from a single depot slap bang in the middle of the country.

But it does mean if something goes wrong at that single depot there aren’t ready alternatives that can immediately pick up the slack.

Another reason for the complete collapse is that KFC insists on using fresh chicken, because it tastes better. But a crucial reason for the rampant disruption to KFC’s operation is that chicken has a short(ish) shelf life.

When ordered, fresh chicken has five days before it needs to be eaten. It’s ordered on day one, arrives at the KFC warehouse on day two, it’s delivered to its outlets on day three and it’s either eaten by customers or reduced to wastage by day five.

KFC is just operating on the JIT principle like so many others, for good reason. But unless it works

like clockwork the whole thing falls apart. Especially, as with KFC, if you limit your alternative options by placing all your eggs in one basket.

Others suggested KFC’s existing operation with Bidvest worked perfectly smoothly, and that the supply chain reshuffle which saw it switch to DHL and QSL was misguidedly motivated by saving money, rather than implementing necessary operational changes to efficiency.

It’s not uncommon for a business to increase supply chain efficiency to save money. But it’s also true that if a new contract was awarded solely on the basis it was cheaper, and then the entire operation collapses within days, it does resemble what GMB national officer Mick Rix called a “bird-brained decision”.

“We tried to warn KFC this decision would have consequences,” he said when the news broke. “Well now the chickens are coming home to roost. Bidvest are specialists – a food distribution firm with years of experience. DHL are scratching around for any work they can get, and undercut them. It’s an absolute cock up. KFC are left with hundreds of restaurants closed while DHL try and run the whole operation out of one distribution centre where conditions are an utter shambles.”

One source close to the situation told The Grocer to move away from Bidvest was not just about price but also because DHL and QSL promised environmental benefits, better delivery scheduling, faster turnaround of orders and greater integrity of food during transportation. But like KFC’s chicken, those promises were not delivered.

Why did it go wrong?


What lessons have been learned? Any system which introduces various elements to work together for the first time is liable to experience trouble in its early stages. Arguably no single element is to blame.

Indeed, when DHL apologised for the unprecedented disruption to the KFC empire, its retail supply chain MD John Boulter said: “Whilst we are not the only party responsible for the supply chain to KFC, we do apologise for the inconvenience and disappointment caused to KFC and their customers by this incident.”

Logistics expert Professor Richard Wilding, from the Cranfield School of Management, is also insistent that “neither the use of a single warehouse or DHL” were to blame for the meltdown, but that new technology and software being introduced to each other for the first time often presents problems.

Yet the move away from Bidvest, a specialist in foodservice distribution, to DHL, which makes no such claim, was a mistake, says Dr Virginia Spiegler, a senior lecturer in operations and supply chain management at the University of Kent.

“KFC’s decision to switch their third party logistics provider from Bidvest to DHL was a measure to reduce logistics service cost. However, having hundreds of restaurants closed could cost them millions in lost sales and low capacity utilisation. This problem could have been anticipated by comparing Bidvest and DHL capabilities.”

“This problem could have been anticipated by comparing Bidvest and DHL capabilities.”— Dr Virginia Spiegler

She points out that while Bidvest is “specialised in foodservice distribution and operates a network of distribution centres across the UK, DHL is trying to run the same operation from a single distribution centre.”

Like Wilding she also points to the difficulty of pairing unfamiliar IT systems together, saying it was “the first time that DHL is partnering with QSL, who has been providing IT solutions on demand planning and stock management to KFC since 2011, therefore the alignment between QSL services and DHL physical distribution is also crucial and building such alignment can take time.”

Still, though KFC’s early pairing of IT systems let it down, IT also proved to be part of KFC’s salvation.

Stowga, an online platform which pairs businesses with excess warehousing and logistics on rolling one-month contracts, says it created a temporary network for KFC within hours that Stowga CEO Charlie Pool says was an “attempt” by KFC to replicate the operation it used to have with Bidvest.

Eventually, on 9 March, just three weeks after the calamitous chain of events that brought down KFC started to unfold, KFC reached out to its former partner and signed a deal for Bidvest to supply over a third of its estate so its customers could “enjoy our chicken without further disruption.”


Chapter 3How did the UK’s supply of CO2 go flat?

Ask any average consumer what CO2 is used for in the food and drink industry and they would say to make fizzy drinks. They’d be right, but it’s unlikely they would know just how widespread the use of CO2 is in the food and drink industry. When a CO2 shortage hit in June, it wasn’t long before all manner of products were affected. While it’s used to add fizziness to all manner of soft drinks, beer and cider, it’s also used during the bottling and kegging process for those same products. CO2 also plays a key role in extending the life of fresh fruit and salad via modified atmosphere packaging. And pork and poultry processors rely on it for stunning animals before slaughter (though this is a controversial practice described as “inhumane” and an “archaic method of slaughter” by Compassion in World Farming CEO Philip Lymbery).

Just like fruit and salad, CO2 is also vital for the use of gas-flushed and modified atmosphere packaging to extend the shelf life of meat.

News of the CO2 crisis hit in June, and the negative impact on the industry was widespread. Brewer Heineken were among the first to flag concerns. With the World Cup on the horizon this led to tabloid-fuelled concerns the UK would be celebrating without lager. Soft drink manufacturers began pulling promotions and restricting volumes.


The British Soft Drinks Association put out a statement which said: “The shortage of CO2 across Northern Europe is impacting a wide range of businesses across the food and drink sector. Soft drinks producers in the UK are taking active steps to maintain their service to customers including working with their suppliers to mitigate the impact as well as looking at alternative sources.”

Over in meat, the British Poultry Council warned up to 60% of the UK’s poultry processing plants could be knocked out “within days” due to the shortages. And the industry was seriously concerned. BPC CEO Richard Griffiths said “we have never seen anything like this before, and it’s a situation that has become very serious very quickly”.

The Food and Drink Federation insisted the government “must act with urgency to assess the issue as quickly as possible and support the industry through any period of restricted supply.”

On 22 June, poultry giant 2 Sisters halted the use of gas stunning in order to keep production going. On 26 June, pork producer Tulip halted production. On 27 June, wholesaler Booker rationed the sale of beer and soft drinks. Asda introduced restrictions on how much fizzy drink people could buy online.

And on 28 June, to more tabloid woe, Warburtons suspended production of its crumpets at three out of four factories because it couldn’t produce the shelf-life-saving packaging required thanks to restricted supplies of CO2.

The drought went on for weeks, but by late July, CO2 levels were being restored to normality. Meat factories switched back to gas stunning and on 27 July the industry was reporting that CO2 levels were back to normal. However, availability would remain affected for weeks to come. In August, The Grocer reported that the supply of soft drinks and bottled water supplies remain “patchy”.


Compared to some supply chain meltdowns, the CO2 crisis is relatively straightforward; demand soared while supply all but ceased. Much of the CO2 used in Europe comes from large ammonia plants that produce fertiliser. They traditionally close down during the summer months for a combination of routine and planned maintenance because demand for fertiliser falls during hot weather.

However, hot weather means demand for cooling soft drinks and beers rises as hot and thirsty shoppers seek out a cold drink. And 2018 was a particularly hot summer.

As a result of that combination, CO2 is always in short supply during the summer months and producers are used to a certain pain threshold of scarcity.

However, what exacerbated the situation in 2018 is that more EU plants than usual shut down. It was a similar situation in the UK, with only one of its five factories left running while the rest shut for maintenance or were experiencing technical difficulties.

That left some of the biggest major CO2 distributors, including Air Liquide, Linde, Messer and Praxair, struggling to maintain service levels to customers, who in turn were unable to maintain production, leading to empty shelves in supermarkets.

Only one of its five factories left running while the rest shut for maintenance or were experiencing technical difficulties.



The CO2 crisis can be blamed on a lack prescience to mitigate for any additional problems or delays at a time when CO2 resources are already known to be stretched. But it’s also been blamed on a lack of logistical planning by the domestic gas industry in terms of a lack of storage capacity. A sharp increase in customers of CO2, like the rapid emergence of independent breweries, has also been labelled a factor.

Going forward, the Royal Society of Chemistry suggests the UK should look at the viability of “new sources of CO2, for example carbon capture and re-use facilities” that “could help to absorb similar shocks to the supply chain.”

It also points out that “improved communication between CO2 suppliers and their customers in the food and drink trades could also help to avoid a repeat of the confusion seen this summer.”

Fundamentally, it says alternatives could and should be considered, including breweries creating their own CO2 from biogas plants or waste-to-energy facilities. Wyke Farms CEO Richard Clothier told The Grocer it was using nitrogen as an alternative to CO2 in its packaging, although it had a minor affect on shelf life as the packaging was “slightly looser”.

The UK should look at the viability of “new sources of CO2, for example carbon capture and re-use facilities”.

What lessons have been learned?


The tabloids splashed heavy on the news. ‘Horses for courses!’ screamed The Sun. ‘Supermarkets clear shelves over horsemeat fears’ panicked the Daily Mail.

Supermarket CEOs like Iceland’s Sir Malcolm Walker, Asda’s Andy Clarke and his namesake at Tesco, Phil Clarke, appeared before TV cameras to explain themselves. They reassured the public that they would be doing everything they could to root out the cause of the problem.

Tesco took out apologetic full-page ads on 17 January and pulled 10 million burgers from freezers. It fired its burger supplier Silvercrest. Tesco’s share price fell by £300m. Aldi had four products test above the FSA 1% threshold and blamed its supplier, Comigel. “We feel angry and let down,” said Aldi. “If the label says beef, our customers expect beef.”

Sales of frozen burgers and frozen ready meals plunged, with the former down 41% year-on-year, according to Kantar Worldpanel. Meanwhile sales of Findus ready meals dropped by 43% and the value of the brand almost halved from £9.5m to £5.4m,

according to Nielsen, after tests discovered its frozen lasagne contained 100% horsemeat.

By the end of February, the FSA had uncovered 18 adulterated products across 15 companies across supermarkets, foodservice and wholesale.

Although horsemeat is commonly consumed on the continent, the prospect was too much for UK shoppers to bear. And though it’s also true that there is nothing hazardous to human health from eating horsemeat, later tests on Asda’s Smart Price corned beef found levels of a horse medication called phenylbutazone, also known as bute, at “four parts per billion”. Trace levels, but undesirable for human health nonetheless.

No one died. No one even got sick. Yet the UK food and drink supply chain found itself at the centre of a scandal that rocked it to the core for months, with thousands of news articles devouring the scandal, millions of products withdrawn from shelves, five government reports, a police investigation that ran for three years, and, finally, the conviction of three men for fraud.

Chapter 4When horsemeat was found in burgers

It’s the most infamous food-related scandal in recent years. On 15 January 2013 the Republic of Ireland’s FSA announced it had discovered horse DNA in beefburgers on sale in the UK and Ireland.

The UK food and drink supply chain found itself at the centre of a scandal that rocked it to the core for months.


Why did it go wrong? Horsegate was the result of criminal adulteration, first discovered after an environmental health officer from the Irish FSA received a tip-off that Freeza Meats, which supplied burgers to Asda, had been adding undeclared beef hearts to its burgers.

During her inspection the FSA officer noticed 12 tonnes of meat at the back of the warehouse in poor condition. She took away samples which ended up revealing horsemeat (Freeza Meats has always denied any knowledge of the contents of the load).

Thinking back on that time, Irish FSA CEO Alan Reilly told The Grocer that he had become aware of “scattered reports” on the EU Rapid Alert System of fake horse passports across Europe. “It wasn’t a harmonised process like it was with beef where there’s a rigid system for tagging and traceability,” he said. “It dawned on us there were opportunities for potential fraud. Ireland was also just coming out of a recession. There were lots of ponies and horses that people could no longer afford and owners were looking to make some money to recoup from these animals. The food chain could be a dumping ground for an animal welfare problem.”

The FSA ran a series of tests on a wide range of products from a wide range of retailers which returned worrying results, with levels of horse reaching up to 29%, including products stocked by major supermarkets.

The supermarkets were quickly informed and the story hit the news. It stayed there for another four and a half years following a police investigation that trailed clues across Ireland, Italy, Denmark, Poland, France and the Netherlands.

In August 2017 Andronicos Sideras, owner of Dinos and Sons, was sentenced to four years and six months’ imprisonment. Ulrik Nielsen of Flexi Foods was sentenced to three years and six months at Inner London Crown Court. Alex Ostler-Beech, who worked for Flexi Foods in Hull, was given an 18-month suspended sentence.

Sideras had pleaded not guilty to conspiring to defraud customers by adding the horsemeat to batches of beef and relabelling them as pure beef. Nielsen and Ostler-Beech had previously pleaded guilty. The court found the three men had conspired to mix beef with horsemeat on several occasions and falsely label it as beef to inflate their profits.

The FSA said the conviction should send a “clear signal that food crime will not be tolerated”. So convictions were made. Yet Norman Bagley, Director at the Association of Independent Meat Suppliers, believes the three men “were but a pinprick in the scale of the whole thing.” He told The Grocer that the horsemeat they traded between them “added up to no more than a couple of pallets of meat, when the true scale of the entire horsemeat operation added up to literally thousands of tonnes.”

“The true scale of the entire horsemeat operation added up to literally thousands of tonnes.”— Norman Bagley


The FSA said the conviction should send a “clear signal that food crime will not be tolerated”.


At first the likes of Tesco, Aldi and Asda shouldered the blame in the media, because as household names they are infinitely more recognisable to the public than those who supply them in the background, like Silvercrest and Comigel. But even those two were a small part of a scandal that revealed to much of the public just how murky and convoluted our modern globalised supply chain can be. Trust runs throughout the UK supply chain, from the farm to the factory to the fork. Horsegate is a prime example of when that trust is compromised at the start of the process it leaves consumers unable to trust what they are about to put in their mouth.

In June 2013, environment minister Owen Paterson commissioned Professor Chris Elliot to deliver an independent inquiry into how the industry had become vulnerable to having that all-important trust eroded by food fraud.

Elliott spent a year consumed by the process, telling The Grocer he was “taken aback by how complex things really were. I knew food systems were complex but I didn’t really understand the full complexity of what was going on and the multitude of stakeholders involved.”

He discovered the polar opposite of the transparency required in order to guarantee a pure supply chain free of food fraud.

In his report he revealed five key findings: that this complexity combined with consumer demand for cheap food gave rise to opportunity for what he dubbed ‘food crime’; that food crime was not high on the police agenda; that severe budget cuts totalling billions to Trading Standards between 2010 and 2015 left it weak and ineffective; that the UK FSA and Defra were unprepared and under resourced to deal with the crisis, and that retailers themselves had to step up and be more vigilant, especially if suppliers were promising to deliver product at an unrealistically low price, and share intelligence if they suspected food fraud.

Action has been taken. Now that retailers are far more aware of the practice of food fraud, and the potential fallout if they get caught up in it, rigorous checks and balances are in place, led by the likes of Tesco.

The post-Horsegate launch of an EU-wide Food Fraud Unit and a UK National Food Crime Unit are also positive steps. The latter recently swelled numbers from 20 employees to 82 and received an additional £2.08m in funding rising to £4m over the year. It will be tasked with preventing food being rendered unsafe or inauthentic through dishonesty; to disrupt offending; to bring offenders to justice, and to build domestic and global counter-food crime capability.

But although the UK is in a “much stronger position post-Horsegate” it “can’t relax for a moment,” Elliot told The Grocer in January, five years after the scandal broke. “People will always be out there trying to test the system.”


Rigorous checks and balances are in place, led by the likes of Tesco.


That was the case in early July when Europe was hit by an outbreak of Listeria in frozen sweetcorn, which was later widened out to a number of varieties of frozen mixed vegetables.

Fruit and veg supplier Greenyard Frozen UK recalled products from a clutch of Britain’s biggest retailers including Tesco, Lidl, Aldi, Sainsbury’s, Waitrose and Iceland, forcing them to swiftly withdraw own-label frozen vegetable products from their freezers. Brands including Ross, Pinguin and Growers Pride also did the same.

An FSA alert on 5 July announced the recalls and said symptoms caused by Listeria monocytogenes can be “similar to flu and include high temperature, muscle ache or pain, chills, feeling or being sick and diarrhoea.”

It added that “some people are more vulnerable to Listeria infections, including those over 65 years of age, pregnant women and their unborn babies, babies less than one month old and people with weakened immune systems.”

Public Health England later said: “In the UK, there have been two deaths due to Listeria linked to this outbreak. Both were in 2017 and in both cases, the individuals had underlying conditions.”

However the European Food Safety Agency also warned that “new cases could still emerge due to the long incubation period of listeriosis (up to 70 days); the long shelf-life of frozen corn products; and the consumption of frozen corn bought before the recalls and eaten without being cooked properly.”

Given the widespread customer base that Greenyard supplied with frozen vegetables includes everyone from the popular discounters Aldi and Lidl right up to foodie favourite Waitrose, with Tesco in between, it’s likely that shoppers aware of the situation could feel hesitant about picking up a bag of frozen vegetables for a while yet.

Chapter 5 Listeria shows up in sweetcorn

Food safety alerts are never good news, but when they involve kiddie favourites like sweetcorn the potential for disaster, accompanied by swarms of negative publicity, is inevitably ramped up.

It’s likely that shoppers aware of the situation could feel hesitant about picking up a bag of frozen vegetables for a while yet.


Simply, a single factory in Hungary first ran into Listeria-related problems in 2015 but failed to completely eliminate the strain from its operations, says the EFSA. The EFSA used whole genome sequencing to identify the food source of the Listeria outbreak and traced the source to the Greenyard factory in Hungary.

It said “evidence of Listeria in products manufactured at the Greenyard factory in Hungary dates back as far as 2015. That suggests any procedures taken at the time, such as cleaning or disinfection, did not succeed in eliminating all strains of the bug.”

It also noted that “further investigations, including thorough sampling and testing, are needed to identify the exact points of environmental

contamination at the Hungarian plant. The same recommendation applies to other companies belonging to the same commercial group if environmental contamination is detected.”

It said the outbreak affected Austria, Denmark, Finland, Sweden and the UK. Some 47 cases, including nine deaths, have been reported.

Greenyard responded in a statement saying: “Our top priority is the recall initiative that we are taking to ensure that food safety is preserved. We take this very seriously. We stopped our production in Hungary for in-depth review and will not restart before the root cause is found and eliminated.”

Greenyard later estimated the outbreak would cost the business around €30m.



What lessons have been learned? Listeria is a tough and nasty little bug. Dr Kathie Grant, Head of Gastrointestinal Bacteria Reference Unit at PHE, says although “most people won’t have any symptoms of the infection, or will only experience mild symptoms such as vomiting and diarrhoea, which usually pass within a few days without the need for treatment. More serious infection can develop in those with weakened immune systems or in vulnerable groups including babies, the elderly or pregnant women.”She adds that the “best way to prevent listeriosis is [for consumers] to practise good food hygiene. Along with the FSA, FSS and HPS, we are reminding people that most frozen vegetables, including sweetcorn, need to be cooked before eating. This includes if adding them to salads, smoothies or dips.”

No doubt this is good and sensible advice. Yet should the onus be on the consumer to ensure the food they consume is safe? Or the manufacturer who produced it or the retailer that sells it to them?

Particularly where the manufacturing process is concerned, as Listeria lurks and thrives in cold, dark and moist environments like food processing factories. Unlike a lot of bugs (including E. coli, Salmonella and Campylobacter which stop growing below 10 °C) Listeria actually grows at refrigeration temperatures and is resistant to typical cleaning methods. And it can linger for years.

So for the food supply chain, Listeria represents a difficult challenge. And although Greenyard appears to bear responsibility for this latest outbreak, they are by no means the only operation to fall foul of Listeria. Indeed, in March, South Africa traced the source of a Listeria outbreak to a (since closed) factory operated by Enterprise Foods that saw the deaths of 180 people, considered the most deadly outbreak to date.

A research paper produced by the University of Nottingham said it is “important to remember that Listeria is a universal problem for food manufacturers, and that even when all reasonable hygiene measures have been put in place, problems can still arise.”

It recommends that the best way for food factories to combat the problem is to step up cleaning and sanitation in preparation and processing areas, paying close attention to conveyor belts and the equipment itself (listeria also thrives in damaged surfaces so these should be sealed at once).

Regular deep cleaning procedures, enforced by compliance software, should be in place as well as strict personal hygiene and clean working practices. And that all cleaning equipment should then be cleaned itself, so Listeria left on them “cannot grow during storage and then be reintroduced into the factory environment”.

Constant sampling and testing in order to flag up problems early is also effective. Rapid-result testing kits are coming onto the market, such as those developed by Romer Labs, which says “strict regulations and a rising market pressure demand fast and reliable Listeria detection solutions” and its testing kits were specifically developed to “deliver the simplicity, speed and high accuracy necessary in everyday Listeria and L. monocytogenes testing.”


This year, as the UK baked in the sunshine, potato growers have added to warnings of impending produce shortages as a poor growing season is set to see yields “fall significantly”. But there are also problems across the board, with carrots, cabbages, lettuce, chard, leeks, peas, sprouts and broccoli and more affected.

For consumers this could mean restricted choice or lower quality specifications they are used to. But worse, the chaos behind the scenes in the supply chain is flashed up to them at the till. Prices are up everywhere when it comes to fruit and vegetables.

Broccoli is up 25.8%, carrots 8.3% and onions are up 3.5% as a direct result of the weather. Salad is also affected with Iceberg lettuce up 6%. “The hot, dry conditions we have seen across the northern hemisphere means the pressure on prices will continue for some time to come,” said British Retail Consortium chief executive Helen Dickinson.

Chapter 6The great heatwave of 2018

The summer of 2018 was glorious for everyone unless you were trying to grow crops. The cost is still being counted and the ramifications will continue for weeks to come, but as of now it’s been labelled the most disastrous natural event to hit the supply chain since the legendary heatwave of 1976 when £500m worth of crops failed and prices shot up in the supermarkets by an average of 12%.

Prices are up everywhere when it comes to fruit and vegetables.


It’s not a case of what went wrong during the heatwave of 2018 but what didn’t. A ‘perfect storm’ is an overused cliche but there is no doubt that crop growers could not have asked for a worse combination of weather in the build up to harvest time. Unseasonal weather has dominated 2018, with blankets of snow in March, an extremely wet April that went beyond the usual April showers, followed by an extended heatwave which saw temperatures hover around the mid twenties and hit 34 degrees in some parts of the country for weeks.

That left growers unable to plant crops when they should have planted them in March, while what could get planted was flooded in April. Then the combination of intense heat and lack of rain meant anything left after that couldn’t grow. It was a freakish combination that left growers shaking their heads and hoping for the best.

Riverford Organic founder Guy says its miserable crop of “bolted lettuces, yellowing spinach, stunted cabbage, failed peas and so on have put us £200,000 behind budget”.

At the time of writing there is still time for a recovery of sorts to take place, although recent predictions suggest the warm weather will continue onto October.

But whatever happens Rodger Hobson, chairman of British Carrots, predicts the “next 11 months are going to be unlike anything we have ever seen before.”


It was a freakish combination that left growers shaking their heads and hoping for the best.


Technological advances have taken place since the last heatwave of this severity in 1976. Jack Ward, CEO of the British Growers Association, says “we are 42 years on” from then, adding there is significantly more reservoirs and irrigation equipment with around half of the UK farms irrigated. But that leaves half without. And reservoirs have literally run dry. Although forecasting software becomes increasingly advanced and accurate every year it can’t prevent freakish rain, snow or sunshine attacking crops.

But IT systems can be invaluable to retailers hoping to maintain a smooth supply chain undergoing huge disruption, not least because it’s already a complex process without the weather complicating matters further.

In terms of remaining compliant in the supply chain, Enric Trullols, software director at Aritmos, which provides agriculture IT solutions across Europe and the US, says modern IT systems “allow various points in the agriculture supply chain to know the source of the crops, record inspection and audit results for the crop source as well as the source of inputs, for instance the fertiliser, pesticides and herbicides used”.

It can also “record the truck and driver used in deliveries, the details of truck and container inspections, and keep track of environmental and cold chain information. By doing so, everyone involved in the process has a clear compliance record in terms of traceability, certification, quality standards and record keeping”.

He adds there is “a lot of information to be captured during the process but now you can capture it in the field, from how the crop is growing to diseases you discover that you need to treat. You can send that request directly from the field to the system just with an internet connection. You don’t need paper, you can do this in real time. It’s the same when the produce arrives at a factory, barcodes are scanned and it goes straight into the system. And that means when it goes to the retailer they also have that accurate information captured at source.”

IT can’t stop the rain, snow or sunshine. But it can demonstrably help growers and manufacturers streamline and enhance their working practices that should ultimately improve profitability for everyone involved in the supply chain.



That’s concerning, because what looks like the most disruptive thing to ever hit the UK supply chain is fast approaching in the shape of Brexit.

However much planning the UK FMCG supply chain would like to do in advance of Brexit, there is little they can do that’s practical or concrete because they, much like the UK government and the EU, appear to have no idea how things are going to pan out, deal or no deal.

“What happens when the UK leaves the European Union is pretty much anyone’s guess,” says Steve Purvis, operations director at Bis Henderson. “This huge uncertainty over what form of Brexit we may experience at our borders is putting the UK supply chain at great risk.”

Even with Brexit hovering portentously in the background, the supply chain has enough day to day challenges where it needs to mitigate risk. But clever use of IT can do exactly that.

For instance, blockchain technology promises to usher in a new era of transparency and visibility at every stage of the supply chain. If used correctly, blockchain would have made a huge difference to horsegate.

In similar fashion, those caught up in the CO2 crisis may not have struggled as much as they did if they had clear insight into how the situation was progressing. Because IT delivers accurate information relating to a supply chain in real time it can also be analysed in real time, enabling accurate decision making based on data-driven insight. That would have enabled manufacturers demanding CO2 to look for alternative suppliers before their rivals did - and gain a competitive edge in the process.

Chapter 7Overall, what can we learn from these disasters?

What all these situations reflect is that while the UK supply chain is designed to operate at maximum efficiency, one disruption, whether it’s a single factory or fraudster, can grind the whole thing to a halt.

Skilled use of IT can turn a murky supply chain into a transparent one, which can then be used as a marketing weapon.


Equally, IT can be utilised to ensure compliance in areas like cleanliness and hygiene to combat the risk of Campylobacter or listeria, for example. Some IT outfits are introducing gamification into the compliance process to make it less onerous - and they are realising startlingly higher compliance rates as a result.

Effective use of IT can also bolster the message of provenance to the consumer. In a post-horsegate world, transparent provenance has never been more vital. So skilled use of IT can turn a murky supply chain into a transparent one, which can then be used as a marketing weapon for an FMCG business.

As more comprehensive and granular use of IT spreads, it’s also clear those involved in the supply chain need to recruit increasing numbers of skilled people with different skill sets, who can understand the process, ranging from supply chain audits to effective use of analytics.

Ultimately, the events described in the previous chapters demonstrate that even the most efficient systems can be fragile when unexpected events occur. But effective use of IT in the supply chain can help bolster them, not least because IT delivers a more streamlined and automated system that saves everybody time. And when everything has to arrive just in time, nothing is more important than that.

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