Sceptics question the feasibility of bringing a complete retail mindset into a B&I catering environment given some of the barriers to change. Inevitably, the market is bringing forth companies who are prepared to challenge the status quo. One such business is NCH Developments, founded by David Mills and David Winter
(Photo credit: Nick Dawe)
Specialising in the development of new concepts in the retail sector has been the foundation of the partnership between David Mills (pictured left) and David Winter (pictured right) for more than 20 years. Working with high profile brands such as Nestlé, the duo has provided catering expertise in executing food-led diversifications for retail products. With a background in foodservice they are now looking to return to the sector, tackling head-on the current evolution in the market towards a more commercial approach. David and David have had considerable success in creating innovations, but this has often been behind the scenes to the broader market. So what is their story?
A FORTUITOUS MEETING
David and David first met at Compass in 1989 where they had been appointed by the business as professionals from outside the B&I environment, where their roles were in an embryonic commercial division to sell the brands that would later become SSP. David Mills was already working in business development with other foodservice companies in leisure venues, and on events like Goodwood and Wimbledon. David Winter, meanwhile, came from a varied operational background including commercialisation within public sector catering environments, overseeing two large exercises to prepare for competitive tendering. (Incidentally, he had also worked for Compass many years before).
It was a fortuitous meeting as the pair left Compass shortly after to establish Café Corporation, a concession based foodservice business. Whittard of Chelsea was their first concession contract taking on in-store tearooms, a concept which David and David then expanded out of the shops into a stand alone brand. From this point, the seeds were sown for embarking on a unique brand of consultancy that focuses on end-to-end solutions, including all elements of practical implementation. Eleven years were spent working as franchise managers for Nestlé’s project – Café Nescafé – delivering operational support and creative input to scale up a concept from scratch to a business of over 100 sites nationwide.
DM: It was the early nineties and coffee was just exploding at that time. Whitbread had acquired Costa, Starbucks had acquired Seattle and we felt that there was an opportunity for a mass market product (naively in hindsight)! Nescafe was the biggest brand and we literally called up the marketing director of Nestlé who liked the idea of taking Nescafé from a shelf product to an out of home product. The concept was originally called Nescafé Coffee House, hence our name NCH, but later changed to Café Nescafé. The cafes were located in a range of places including leisure centres, EasyEverything stores, MOTO forecourts and ODEON cinemas. There were also a complete range of food and beverage products for the brand which were not Nestlé, which were bespoke manufactured and distributed nationally.
DW: We also had a number of other concession contracts in museums, galleries and in-store. However, Nestlé was increasing their foodservice focus, so we were fortunate that they involved us in other projects. This included trials with associated customers including Little Chef, Sodexo, Compass, hospital trusts and local authorities. We became an ‘added value’ to the Nestlé offer, whether it was through taking other products into foodservice concepts, or where we helped to develop client operations by looking at areas such as planning or food hygiene.
In 2010 Nestlé took an international strategic decision to withdraw from direct involvement in trading operations and NCH spent two years scaling down the Café Nescafe project. They have since worked with other brands looking to take products, such as food, ice-cream and confectionary, to the high street, which had become a significant marketing trend. This included New Covent Garden Soup Shops, a concept with 20 sites, which traded for five years and was then rebranded independently to Garden Cafe.
DW: The major focus for all of our clients and their franchisees has been to actually make it happen for them – a lot of the time providing catering for the non-caterer. We have worked with a lot of organisations bringing controls and operational support that they do not have in-house. Most clients are keen to maintain the focus on the brand and their company, so over the years we have had to be quite low key in our activity!
FOUNDATIONS FOR A NEW APPROACH
NCH are now looking to establish a business in the casual dining or B&I market. For the latter they believe that there is a considerable opportunity to apply the expertise they have developed together within a market that needs to change but, in their view, has not effectively done so to date. Specifically, David and David see real scope to make a difference in the B&I market. However, the main focus is on finding the right partner whether it is through acquisition, joint venture or partnership.
DM: The market is moving away from Cost-plus contracts and heavy subsidy. It’s a very new focus for us, but we clearly have the background and have done it.
DW: With all of our clients we have had an opportunity to break a lot of new ground and work on a huge volume of new developments. In working with Nestlé, for example, we even had the opportunity to work on the design of new coffee machines from scratch and looked at a system for developing Nespresso bars across the world. This gives you a level of understanding around the processes involved; problem solving and commercial development which are key elements of our skill set. We can rapidly understand opportunities, weigh them up and deliver mobilisation across a large base.
The industry has talked about commercialisation for many years, but never really does it. It’s a mantra not reality. Clients are looking for lower Capex, revenue costs, subsidy and a more applicable offer ‘what their people want’. However, the offer has not evolved. Very often changes are only a few things borrowed from the high street but not introducing the complete concept. There might be some bids where commercialisation is a key objective, but it’s not rampant and it needs to be. That’s the challenge and the opportunity.
DM: Getting to the right decision makers is crucial as there are so many gate keepers. Unless you are talking to the client and can really genuinely know what the client wants, it’s a lottery.
DW: There are a number of filters- consultants, FM companies, middle management responsible for procurement or personnel services – and these all mitigate against change even if unintentionally. Clients and operators are both saying that they want to evolve, but the process of filtering makes it almost impossible as you cannot have the genuine dialogue. Everyone works in their comfort zone and the danger with the filtering is that no one ends up with the step change they asked for or proposed. Change requires bold informed decisions by empowered individuals.
David and David are two very engaging and empathetic communicators who possess a vast knowledge of retail and consumer trends gained over the past 20 years. They are coolly determined and have a wealth of combined experience from which to evolve another major brand as part of the next step in their careers, and this could quite feasibly be in the B&I market. Naturally, they understand the complexities of this exercise and the challenges of finding the right personal synergies. So what do they want from a partnership?
DM: In B&I we are looking for a boutique operator who may benefit from additional support, or we would also consider an opportunity to work with a brand on the high street or another market. Realistically this could be from the retail, casual dining or quick-service sector, such as a hot food, sandwich or emerging coffee operator.
David and I are completely open to the opportunity and the match but it comes down to people and having the same ethos and strategy longer term. There has to be a focus on quality and food. David and I are looking at but the medium term with an exit in seven to ten years in some shape or form.
Ultimately it’s something we want to enjoy and be proud of. Our buzz is running businesses – we are operators, coming up with solutions.
The B&I market is undergoing a period of evolution in many ways, especially the push towards a more retail led approach. It is clear that NCH have a level of expertise to deliver a change in the management of foodservice contracts and that David and David are both highly knowledgeable and likeable characters. The question is one of time and opportunity.