Technology: Refreshed thinking

E-commerce is finally catching on in the trade. Phil Mellows reports.

E-commerce - the business of buying and selling goods and services over the internet - has been slow to catch on in the pub industry. As the dotcom bubble reached bursting point at the end of the last century, numerous attempts to incorporate licensees and their suppliers into a web community quickly foundered. There was an understandable nervousness about doing deals electronically in an industry that likes to do things face-to-face - and the benefits of the extra investment were not terribly evident.

Over the last couple of years, however, trust in e-commerce has been slowly restored and several managed house groups are now running systems.

One of the most successful providers has been Freshnet Systems which serves Young's, Hall & Woodhouse, Greene King, Wadworth and Massive and has just begun to roll out a system for Manchester brewer JW Lees.

Late last year the Poole-based company became a regional winner of a Best Practice award for e-commerce providers and the Department of Trade & Industry has used Freshnet's work with pubs for a supply chain operations case study on its website.

Freshnet developer Andrew Pickett believes that pubcos are finally appreciating the benefits of online purchasing.

"It has taken a while for the right kind of infrastructure to be put in place," he says. "But now the costs are coming down and pub companies can see that it's working. They are getting the results from it and they can see the control it gives them."

Freshnet's own strategy has recognised that pubs want to use small local suppliers for food, as well as the big wholesalers, and its success in making it possible for a wide variety of suppliers to be included in the system has, for Andrew, been key.

"There is no one solution for all," he says. "Each time we integrate Freshnet with a supplier's existing system it is different. Pubs buying goods over the internet can still use their local butcher if they want, while head office can still track all its purchases."

Control over purchasing​

Working properly, e-commerce has advantages for both the pubco and the pub manager.

For head office, control over purchasing at pub level is vital to control costs, but in practice managers and chefs are buying certain ingredients locally and a fully effective e-commerce set-up has to take that into account.

In the Freshnet system each pub has a product menu unique to it based on a list of wholesalers and suppliers it has purchase agreements with. Details of the availability of stock come up on screen.

Freshnet acts like a kind of broker, improving the purchasing power of its customers and getting the best possible price - which is also visible to the buyer in real-time.

Goods are ordered with a few clicks of the mouse. "Suppliers receive the orders online in real time and dispatch the goods for the required delivery date," explains Andrew. "When the order has been received by the outlet it reconciles goods received with the order placed and confirms the order on the system. This then creates an invoice."

Experience so far has shown that automated purchasing improves response and delivery times at the pub and helps streamline the whole purchasing process, reducing the risk of error.

In addition, total sales data is available to head offices over the internet and in real time making it possible, for instance, to report on total spend on individual lines, price trends and a pub's sales performance.

By linking all local suppliers and buyers, Freshnet also bypasses problems of central distribution of food, ensuring quality and freshness without losing control over distribution and purchasing.