Corporate Responsibility Supporting entrepreneurs in food, technology and education, to create better futures.
Supplying Ocado Ocado began life 18 years ago as a small start-up with passion, an entrepreneurial spirit, and an outside-the-box ambition: to change the way the world shopped. As we ve grown, we ve used our experience and influence to encourage other entrepreneurs in the grocery sector, in our own business, and in education. We continue to seek out opportunities to encourage and reward entrepreneurial thinking, believing that it has the power to create radical change. We ve acquired a reputation for spotting the next big thing in food and drink; in 2014, internal research suggested at least 70% of our supplier base was made up of micro businesses and small to mediumsized enterprises (SMEs). How have we managed that? Well, at Ocado, everyone s shopping is packed in one of our three Customer Fulfillment Centres. Our business model allows suppliers to sell to over 70% of the UK with less than a pallet of stock. With a traditional supermarket model, suppliers often need to provide minimum quantities and stock multiple stores at launch; this can prove difficult both financially and logistically. To make our listing process more accessible, at the end of 2016 we created a supplier application website. Here, brands can access helpful resources on how to work with us, tell us about their business, and start the ball rolling with an application. 1,037 businesses have applied through the supplier website since June 2016. 178 entrepreneurs have met with our Buyers, and 33 brands have already launched to our customers on Ocado.com. 70% of supplier base is SMEs 33 small suppliers launched through supplyocado.com 2 3
We sold our first ever pot of guacamole through Ocado. At the very start of our journey they were top of our shortlist of retailers we wanted to work with. We know Ocado customers care about what goes into their products, and we know Ocado take seriously their willingness to help nurture and support new, innovative brands. Their online supplier portal made the listing process very smooth. All it takes is a two-second Google search and then the application itself, which allowed us to structure our thoughts, and helped us prepare for meeting our Buyer. Having a really simple and clear process is incredibly helpful I think most food entrepreneurs know how difficult it can be to get your product into the hands of a Buyer! Even if you re rejected through the supplier portal, it helps you to understand the process, reevaluate your proposition, or figure out what you need to get in place before you come to market. Gaz Booth, Holy Moly Guacamole It s not just getting listed that can prove tricky for SMEs. Building robust supply chain processes such as order forecasting, figuring out transport, and getting packaging right so products get to customers in the best condition, all require a certain level of expertise. In 2016, we established the Ocado Primary Network, a team dedicated to improving logistics for small suppliers at launch, and as they grow. While their sales volumes remain low, instead of paying for stock to be delivered via parcel courier to multiple sites a costly and unreliable process they work with a consolidator. Small suppliers deliver all of their stock to one place, where it s carefully stored until required. The consolidator brings lots of different brands to our sites all at the same time; they also deliver to any other customers the supplier has too, such as Selfridges. The benefits are reduced transportation costs, a higher level of order accuracy, and more reliable availability to customers as a result. 4 5
Setting up your supply chain and commercials as a small business can be difficult. Ocado supported us, helping us understand processes and advising on what could make things work better. They ve helped us grow from a very small start-up to a SME very quickly, developing into a business with a strong, stable supply chain working with a number of retailers. Being listed through Ocado gives us a huge geographical reach and lends credibility and prestige to our brand. We have a strong product and brand which has been supported by a fantastic team at Ocado including Marketing and PR, Supply Chain and our fabulous Buyers, working with us to drive growth and deliver commercial success for all. The launch of Holy Moly has been a big success and we look forward to working together for many years to come Gaz Booth, Holy Moly Guacamole Delivered to date 33 SMEs launched since 2016 through our supplier portal. 150 small suppliers in the Ocado Primary Network. 2 full time team members dedicated to providing support. Future goals Continue to source and support small suppliers. 6 7
Britain s Next Top Supplier Cash flow can prove problematic for micro businesses and SMEs. But online customers primarily discover new products through promotions, and through media support. We launched Britain s Next Top Supplier in 2013. Our aim was to give the small suppliers we were most excited about the best possible start: the winner earns a launch package worth 20,000 and a listing at Ocado.com for a minimum of six months. Aimed at retail-ready food and drink businesses looking for nationwide distribution for the first time, qualifying entrants are invited to attend a Meet the Buyer day, then whittled down to a shortlist. Finalists present their products to a panel of judges, which in previous years has included our Chairman Lord Rose, celebrity chef Tom Kerridge, our Director of Retail Lawrence Hene, and Head of Buying, Rose Price. You don t have to win the competition to get listed; over the years we ve ranged numerous brands discovered through Britain s Next Top Supplier. 2017 We applied online for Britain s Next Top Supplier after hearing about the competition at a trade show. We were invited to the Meet the Buyer day, where we learned more about Ocado, met other producers in our sector, and presented our products to a Buyer. It was a great learning experience, and we left feeling really excited. We were told we d made the shortlist very quickly, and invited back to London to present to the judging panel. Our brief was very open; we were simply told You have 20 minutes to tell us about your business. It felt very Dragon s Den. We left feeling extremely positive I thought, no matter what happens next, I ve learned lots and we ve had a great discussion. Days later I got a call to explain we d won. We were live within weeks of the competition. We chalk this up as a massive success; winning the award and being nationally recognised has been game-changing, and the reception from our customers and suppliers has been really positive. Barnaby Edwards, The Garlic Farm, BNTS winner 2017 8 9
Delivered to date Three winners; Hiver Beer, Manfood, The Garlic Farm. 21 brands discovered through the competition, and listed. Future goals Continue to support food and drink entrepreneurs through Britain s Next Top Supplier. 10 11
Homegrown talent Ocado Inventor Award There are people at Ocado who are paid to invent things. There are also people who come up with amazing ideas for new inventions that can revolutionise our business, outside of their day jobs. To encourage our technical staff to innovate and think differently, in 2014 we launched the Inventor Award. Employees listed as an inventor on a patent application recieve a cash reward 12 months after the application is first filed; then a second sum on first grant of their case. This recognises their contribution to the growth of our business, and rewards problem solving, entrepreneurial thinking. Ocado Business Innovation Awards As covered in the Education Pillar, we re constantly testing, evaluating and improving our business to drive efficiency and growth. With this in mind, in 2015 we launched another competition to reward and recognise employee innovation. Any employee can enter, and the first prize is 5,000, with 500 awarded to each runner up. Our employees each have a unique perspective of how our business can improve, and can use their understanding to make suggestions that could create tangible benefits for our business. Our first winner, Luke Cunningham, was a former Customer Service Team Member now working in our Insurance team. His winning concept was for a delivery van panic button, which wirelessly activates a camera and a personal alarm to keep our drivers safe. Ocado prides itself on innovation; Ocado is here today because great ideas have been built upon, developed and implemented. Good ideas are not limited to our design engineers or senior managers everyone can play a part in making Ocado even better. Working on the front line preparing and delivering customer orders can bring the simplest and most innovative ideas. Tim Steiner, Ocado CEO Delivered to date 61 patent applications filed through the Inventor Award. 10,050 awarded to named inventors to date. 426 ideas generated through the Business Innovation Awards since 2015. Future goals Continue to encourage and reward innovative thinking within our business. 12 13
Educating entrepreneurs in Engineering and Technology Engineering Education Scheme The Engineering Education Scheme (EES) has helped over 30,000 Year 12 students experience 6 month engineering projects. This develops interview, communications, teamwork, technical, and project management skills, alongside entrepreneurial thinking as they work together to solve real industrial problems. They re mentored by engineers in a corporate setting, and at the end of their project they present their solution to their peers. 91% of EES alumni go on to complete a STEM related degree, with a further 71% working in engineering or technology companies for their first job. In September 2017, we signed up to this scheme, partnering with Monk s Walk School in Welwyn Garden City, Hertfordshire. Our Logistics Development and Engineering team agreed to mentor six A Level students, providing them with a special Ocado challenge to solve: reducing Robot tyre wear and tear. Ocado Technology projects For a number of years, our Technology team have offered university interns the opportunity to work on exciting projects ranging from MMO game design, to robotic simulation, to interactive product roadmaps. These projects are designed to be interesting, challenging and selfcontained, allowing the intern to develop solutions independently. During 2017, we had 19 interns working on various projects. University of Edinburgh summer intern, Chen Zhan Chen, designed and created a prototype for a long range Internet of Things (IoT) Monitor. Chen s project was a great success; the monitor was able to reach a theoretical maximum range of 22 km, cost less than 70 to produce, and is fast to deploy. A very interesting and multidisciplinary project that helped me understand how physics, electronics and computer science work together as the building blocks for the Internet of Things. Chen Zhan Chen, summer intern from the University of Edinburgh Delivered to date Mentoring pupils at Monk s Walk School through EES. 19 interns working on Ocado Technology projects in 2017. Future goals Continue to develop opportunities to foster entrepreneurship in education. Explore opportunities with universities to reward entrepreneurship. 14 15
Corporate Responsibility