The Challenge

Carluccio’s Restaurants were co-founded in 1999 and have grown rapidly to become what is now a 100+ strong restaurant business with locations across the UK and internationally.  In order to achieve their growth targets, Carluccio’s recognised that additional commercial support was needed.  Having worked successfully with Procure4 in the past, Neil Wickers, CEO, engaged us to deliver a major Cost Based Reduction Programme, with the primary objectives being to improve gross margin whilst maintaining key quality markers and simultaneously improving business efficiencies.

Within the Beverage categories there was a clear need to improve and simplify Supply Chain efficiencies first, before tackling the challenge of cost base reductions. The challenges faced were:

  • High Route to Market (RTM) complexities
  • Existing Contracts were already in place
  • Strong incumbent Supplier relationships
  • Requirement to maintain quality benchmarks
  • Low Marketing contribution from Suppliers

The Approach

It was established early on that there was a keen interest by Carluccio’s in many of the Beverage areas to remain with incumbent suppliers and with existing products & brands. After various engagements with key stakeholders, it was evident that significant work had already taken place by Carluccio’s to select the right strategic partners and in most cases, the right brands and products for their business. The challenge lay more in obtaining the optimum RTM for these suppliers at the best commercial terms possible.

On the back of the same investigations it also became evident that their existing RTM strategy was over complex and as a result not as cost efficient as it could have been. Subsequently, significant work went into Scenario mapping the optimum RTM solutions from both a simplicity and cost based reduction perspective.

All Beverage categories were taken out to competitive tender and negotiations took place with incumbent suppliers to drive the optimum commercial output for Carluccio’s whilst ensuring current quality benchmarks were adhered to.

Proposals were also negotiated with suppliers to leverage incremental Marketing monies and Brand support in order to assist Carluccio’s with future Brand plans and sales driving incentives.

The Results

As a result of the above process Carluccio’s have benefited from a simpler RTM which allows them to further drive incremental commercial value out of their value chain. They now have a leaner, less complicated and more transparent Supply Chain and an experienced logistics operator within the Hospitality sector as their partner. A partner who will be able to continue to support them through their ongoing growth aspirations. They also benefitted from a significant cost base reduction across their beverage categories whilst being able to maintain their preferred brands and supply partners.

Carluccio’s now have closer working relationships with more of their Suppliers and have tighter control of future commercial contract renegotiations. Finally, with regards to Marketing they are supported both commercially and from a resource perspective by their incumbent suppliers as and when required, working on joint objectives to profitably grow sales.

Key Facts

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