T&B said that the new contract was awarded after a successful trial last year, and came into force last month. The British group will handle more than 12,000 tons of chilled foods destined for Merkur outlets each year.
Merkur is the supermarket format of REWE Austria, the retail sector leader there with a 36 per cent market share. Merkur has around 100 outlets across Austria, and has recently extended its leading position with the acquisition of a minority stake in Sutterlüty in Vorarlberg in the west of the country.
T&B has only been active in the Austrian chilled food logistics market since 2002, when it created a new subsidiary, Tibbett & Britten Frischelogistik. As well as mainstream chilled logistics, this business unit allows Tibbett & Britten to offer combined deliveries of frozen, chilled and ambient goods in the country's more peripheral regions where single-temperature deliveries are inefficient due to small drop sizes.
Tibbett & Britten Austria operates a fleet of ambient and multi-compartment/multi-temperature commercial vehicles and trailers, and offers its services to food manufacturers and retailers across the country. Plans for 2004 include tripling the chilled logistics unit's delivery volumes, reflecting Tibbett & Britten Austria's strategy of concentrating on the fast-growing fresh and chilled food sector.
Merkur was said to be particularly impressed by Tibbett & Britten's handling of products in the so-called 'ultra fresh' convenience food category (0°C to +4°C temperature range). Maximilian Hochstöger, a member of the Merkur board, said that the 2003 trial had helped the company make the decision to switch to T&B.
"After a demanding start-up, we saw significant improvements in our service levels in the second half of the year due to the effort, commitment and team spirit of Tibbett & Britten's people. This has convinced the Merkur management to award the company a substantial logistics contract."
Saad Hammad, Tibbett & Britten's managing director for Europe, said that the company was delighted to win the new long-term business with one of Austria's leading food retailers. "The award demonstrates the success of our approach of extending services in the country beyond the original frozen food sector, and into chilled and ambient food logistics. We are aiming to improve the efficiency of Merkur's chilled food supply chain still further during 2004, and we hope to extend our relationship with them and the REWE group in due course."
Tibbett & Britten Austria was formed in 1994 to offer a range of FMCG warehousing, distribution and transportation solutions throughout the country. In 1995 it acquired TKL Tiefkühllogistik, and began a long-term logistics contract with Unilever. In 1999 it added the catering logistics company GV Logistik, followed by the acquisition of refrigerated transport company Frigoliner in 2000.
Despite this, its focus has been mostly on the frozen food sector in Austria - until last September last year, when it branched out into the ambient food sector for the first time, providing logistics services for Kelly, the country's leading manufacturer of crisps and snackfoods. That deal included not only the the outsourcing of Kelly's entire logistics operation to Tibbett & Britten but also the co-packing of Kelly's products for promotional and other special merchandising activities. "We are now turning our attention to the chilled and ambient food sectors, and Kelly's represents the first major business to be developed in Austria as part of this new strategic approach. Our intention is to be at least as big in ambient food logistics in the country, as we are in temperature-controlled," Hammad said.
In Central Europe, Tibbett & Britten has major operations in Austria, the Czech Republic, Hungary, Poland, Romania and Slovakia, and will clearly hope to build its operations there as the food retail and manufacturing sectors become more advanced with EU expansion.
It recently joined forces with Tesco in the Czech Republic, and now services all Tesco's chilled distribution needs throughout the Czech Republic. it also works with retailers such as Auchan, Big Food Group, Billa, Carrefour, Louis Delhaize, Eroski, Intermarché, Leclerc, Lidl, Marks & Spencer, Metro, Prisunic, Sainsbury's, Spar, Système U, Tengelmann and Wal-Mart, many of whom are active in the accession countries.