AN INTERVIEW WITH KEVIN McGURK

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Kevin McGurk, Operational Services Director, United Biscuits.

 

Kevin McGurk, Operation Services Director at United Biscuits shares his perspective on the future challenges for agri-food supply chains and explains why achieving supply chain continuity will be more essential than ever.

EFFP: What are the key challenges facing food businesses when sourcing and procuring agricultural commodities and primary ingredients?

KM: The pace of change and volatility in markets has increased hugely in recent years. In the past procurement was a ‘behind the scenes’ activity but now it is much more ‘front of house.’ Consumers, customers and NGO’s are much more interested in sourcing and where ingredients come from as the recent campaigning against Sinar Mas demonstrates. The pace of change is much faster with relatively new markets such as biofuels impacting heavily on crop availability in some areas, weather volatility having unpredictable effects on harvest levels plus changing demands from consumers, who are looking for healthier and more nutritious products.

The procurement function needs to adapt and react quickly to these challenges in a globalised trading environment that often creates chain reactions from one market to another. For example with the growing demand for biofuels, when the oil price increases we now see a corresponding rise in commodity prices for palm oil and other crops that can be used as fuel. This combined with increasing investment activity from financial speculators, where there is no transparency in the UK on traded market volumes as there is in the USA for example, makes decision making for industry much more difficult. As a business we need to understand not only the market interconnectivity but also what the trading positions are by market in order to help us in the manufacturing industry predict its effects.

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