‘Confectionery is in our DNA’: Steve Foster, MD of Hancocks
In his first interview since becoming managing director of Hancocks last June, Steve Foster (pictured) talks to Cash & Carry Management’s managing editor Kirsti Sharratt about his strategy and priorities.
A bit Willy Wonka-ish: that’s how Steve Foster, managing director of Hancocks, describes the company’s stores.
“You’ve got this sea of colour, you can smell the flavours and see all the different shapes of sweets,” he says animatedly. “I think a lot of people who don’t know of Hancocks don’t appreciate just what’s inside our buildings.”
Foster is determined to change that – a new focus on communication forms part of his strategy to maximise the potential of the business, which has specialised in confectionery since it was founded in 1962 by Ray and Liz Hancock.
Acquired by the IB Group in 2017, Hancocks now has 14 cash & carries and a burgeoning ecommerce business serving 30,000 customers, from corner shops to ice cream vans, and from sweet shops to festival vendors.
Foster, who joined Hancocks in April 2016 as chief financial officer/chief operating officer and became MD in June 2020, spoke to Cash & Carry Management about his business approach, his plans, and changes he has made so far:
How have your previous career roles helped you with your job as managing director of Hancocks?
I’m a qualified accountant, so I have good business appreciation, but I actually graduated in aeronautical engineering, which gave me a logical way of thinking and problem-solving. One of my roles in engineering was lean management – I was working with cross-functional teams across six factories in Europe to improve their practices.
I’m a firm believer that people make a big difference. I saw that a lot in the States where I spent eight years in a business turnaround role at Hero Group. When we got a new CEO, Jeff Boutelle, he was inspirational. I learnt so much from him about how to manage people. He was of the opinion that if you’ve got a good team, your main job is to support them and stay out of their way. At the start of my time in the States, Hero had a union that despised management; by the time I left, the union was working with management – it was a sea change and I loved it. My time there gave me a taste for a director role, and so when I joined Hancocks it was with that in mind.
At Hero, I also learned about pace, branding and the consumer – all important elements of FMCG – and I think I’ve brought these learnings to Hancocks.
What has been your business approach since becoming MD of Hancocks?
Getting the MD role in the middle of the COVID crisis and an ecommerce boom meant that a lot changed quickly, and I had to ensure that the leadership team were aligned with what we were doing at that moment and what we were trying to do for the longer term. I put people at the heart of our strategies.
Hancocks’ magic triangle (left to right): business development director Ian Gavin, sales & marketing director Helen Bradshaw, and chief operating officer Jonathan Summerley.
Hancocks is lucky to have Ian Gavin, who joined us last year as business development director – he has so much experience in sourcing confectionery and novelty products. We also have Helen Bradshaw, our sales & marketing director, who has a ton of experience in confectionery, and we’ve got Jonathan Summerley, our chief operating officer – he’s been at Hancocks for 35 years.
I refer to those three as the magic triangle because between them they know what’s right for the customer. I think of them as being the engine room for solutions and innovation.
How would you describe your management style?
I’m very open and quite reflective. I think it’s good to try something, and it’s ok to get it wrong. That’s a big part of the culture I’m trying to get into the business. Let’s learn from what works and do more of it and let’s learn from what didn’t work and see what we can do differently.
I’m also big on recognition: I’m always looking for an opportunity to say ‘well done’ to a person or a team. For example, when we launched our new website last year, we posted a box of sweets to all our employees and a letter saying how proud we were of the team’s achievements.
What changes have you made in the past year?
Unfortunately, it was the COVID crisis that ultimately made five of our cash & carries financially unviable. We saw customers from our Dundee, Coventry, Stoke, Croydon and Reading branches transitioning to online, and when lockdown happened those sites saw a further reduction in footfall. At the same time we were looking at rent increases for those sites, and so we closed them.
It was horrible. You can say it’s business and that’s one way of justifying it in your head, but ultimately you know that behind those decisions are people.
We are also moving from the Dunstable site. When we went into lockdown, the customer base switched almost overnight to online, and in the space of about three weeks our online business tripled. As we came out of lockdown, many of our customers did come back to cash & carry but a lot of our new ecommerce customers stayed online, and we very quickly realised that the Dunstable facility couldn’t cope. We therefore decided to go for a bigger site.
The bitter-sweet bit is that the team at Dunstable walked through fire for us, servicing the customers really well as online orders soared. We have offered all of them the chance to move to the new distribution centre in Manton Wood, and Johnny Kumar, our warehouse manager at Dunstable, is heading up the new site. Some employees have opted not to come because the job market in the Dunstable area is so strong. We are due to leave that site by June, and the landlord already has two interested tenants.
Our Manton Wood facility has just opened and eventually we expect to employ 100 people there, more than double the number at Dunstable. We will run ecommerce from there and branch replenishment, but it won’t have a cash & carry.
How have the COVID crisis and Brexit affected your product availability?
To try to ensure that our stock position stayed healthy, we put an extra £1 million into stock.
Hancocks has put an extra £1 million into stock to ensure product availability during the COVID crisis and Brexit.
We deal with so many small, niche confectionery suppliers, which is brilliant because they bring a real passion to the industry, but the flip side is that it doesn’t take much for staff sickness to hurt those businesses.
With regard to Brexit, we have a significant European supply base and so, since January, we have been trying to understand the problems affecting the supply chain. These include commodity codes, paperwork, and to some extent truck drivers not wanting to bring product into the UK because of COVID testing and the risk they’re going to get stranded. What we’ve managed to do is connect some of our European suppliers who have managed to get stuff moving with the ones who haven’t, and they’ve been able to help one another. It’s a minefield, and we are talking to HMRC, but I think they’re learning as well.
What were your financial results for 2020 and how did the C&Cs and ecommerce sides of the business perform?
Turnover in 2020 was circa £70 million – basically in line with 2019.
We saw more than 200% growth in our ecommerce sales over 10 months, and even in January it didn’t quieten down. We reduced our minimum order to £30 at the start of the COVID crisis but because it resulted in too many small orders, we reverted to £50.
Cash & carry sales last year were interesting. We shut our stores during the first lockdown, and had a phased reopening after six weeks. From then, it took about three months to get back to 80% of pre-COVID levels of footfall – customers were coming less often but spending more, so that was ok.
We didn’t see much impact from the second lockdown in November – I think our customers just carried on, a bit like we did. However, the next lockdown in January, which came on the back of Christmas and messages about the new strains of COVID, did drive numbers down by around 30%. Today we are down by about 20% in our cash & carries but our ecommerce business is more than covering the decline.
With so much turbulence in the market place, to what do you attribute Hancocks’ solid performance?
Pick & mix has morphed into new formats like shaker cups due to hygiene concerns during the pandemic.
The fact that our turnover has been stable over the past year shows the strength and resilience of confectionery. Everybody wants that pick-me-up, that bit of sunshine.
We’ve also seen a lot of people starting online businesses during lockdown. I was at our Watford depot in September and got chatting to a British Airways pilot who was furloughed, and he had set up an online sweet shop. I know of accountants and teachers who have done the same.
We’ve also had traditional sweet shops moving online and selling pick & mix packs and ‘movie night in’ products. COVID definitely affected our own sales of pick & mix but sales of shaker cups and mixed bags of sweets made up for that volume; in essence, pick & mix just morphed into new formats.
What are your priorities for the business this year?
We are focusing on three things – solutions, expertise and innovation – and we’re calling the strategy ‘Partners in Sweet Success’.
• Solutions: we’re looking for ways to overcome challenges. For example, as our ecommerce sales grew, our customer service was affected and we quickly realised that the tools we were using weren’t good enough. Therefore, in March, we are implementing Zendesk, an industry-leading cloud-based ticketing software solution, which will be a way for our customer services team in Sutton to manage calls better.
• Expertise: we’re trying to find ways to share our expertise with our customers. We will be rolling out a training programme – a bit like the McDonald’s five-stars scheme – with our cash & carry colleagues in the coming months. We want to be able to direct a customer to a specific member of staff who can talk to them about particular aspects of confectionery.
• Innovation: this is about giving our customers exciting NPD from our suppliers – such as the blue tongue painter lollies developed by Astra Sweets in Holland. There are quite a lot of small start-up confectioners as well, and I love to be supportive of these pioneers by giving them access to the market.
NPD also comes from our own team working with some of our trusted manufacturers to produce own-brand lines. We have Crazy Candy Factory, Bonds of London, and Kingsway own-brands, and our aim is to offer insight-driven innovation. We would rather not step on the toes of well-known brands, and so typically you will find our own-label where it suits both us and the manufacturer.
Also, we are now having meetings with customers to find out what they think could work in confectionery, just to feed into that innovation pipeline.
How do you balance making profit with offering choice?
We need our products collectively to make a profit but there are certain lines that are not about profit; they are about giving our customers access to brilliant lines. American confectionery is an example – the margins aren’t necessarily great because of the cost of importing, but our customers love it.
Do you have any plans to diversify into any other product categories?
Not really. One thing we’ve learned in the last couple of years is that confectionery is in our DNA so we will leave all the other stuff to the big, successful cash & carries – the Bookers and Bestways of this world. We are experts in confectionery, we’ve got the biggest range, we’ve got the best people when it comes to product knowledge, so we’re doubling down on confectionery.
When and how do you intend to announce the detail of your plans?
We will share our ‘Partners in Sweet Success’ plans with our team and our supplier base in the next three months.
A new range of PoS material has been introduced in the C&Cs this year.
We’ve got a lot to offer suppliers, including exclusive partner relationships. Pez would be a good example of where we have used insights to grow the brand and provide great products to our customers.
Our communication with existing and potential customers will also be a priority. Back in the ’60s when the Hancock family started the business, if you were a sweet shop you had to deal with Hancocks. The world has changed over that time but we didn’t necessarily change our communication style and that’s what we’re doing now.
We’re improving our communication to reach out to new customers. We’re a well-kept secret, and so we’re making a real effort to raise awareness in the press and online – we’ve just started our own Instagram page.
We have also introduced a new range of point-of-sale material into our cash & carries, effectively to point out best-sellers and ‘must stocks’. Longer-term we want to be able to recommend a particular range to customers based on demographics in their area.
What does a typical week look like for you?
Quite busy! There is a lot of interaction with the leadership team, and at the moment I’m going into the office twice a week and working from home the rest of the time. During the week, I start every day with breakfast with my family – I check in with my daughters (age 6 and 9) and that’s important to me. I can then focus on work. I’m definitely a hard worker, but I’m quite protective of my weekends.
What are your interests outside work?
Steve Foster with his Harley-Davidson at Goathland, where Heartbeat was filmed.
I’ve got a Harley-Davidson, and my dad’s a keen motorbiker too, so before lockdown we would meet up about once a month for a ride somewhere, and I miss that. The bike hasn’t started since October; we have stuck to long walks. I also like DIY. In 2017 we bought a new house and it turned out to be a lot more work than expected – we had to gut it in the end. I would finish work, go straight to the house, grab the tool bag and start smashing things – and then I would get the proper tradesmen to come and fix it all!
Last but not least, what is your favourite confectionery?
A Double Decker! I’m a chocoholic. That said, a Sherbet Dip Dab and Wine Gums are old favourites too. I could eat sweets all the time at work – they’re everywhere – but I actually only have them two or three times a week.
Hancocks in numbers:
£70 million turnover (2020 and 2019)
14 branches
140,000 sq ft new distribution centre in Manton Wood, Worksop
30,000 customers
400 employees
4,000+ product lines
200% growth in ecommerce sales in past 10 months
5% of business from exports
0 delivery vehicles – Hancocks uses a third party for distribution
