03 August 2009

The UK's top tourist attractions expect a busy season as holidaymakers seek value breaks. Jill Reilly speaks to three buyers

John Drake, head of facilities management and procurement, Merlin Entertainments

Alton Towers, the London Eye, Madame Tussauds, London Dungeons, Sea Life Centres, LEGOLAND, and others are owned by Merlin Entertainments Group. It is the biggest operator of amusement parks and attractions in Europe and second largest in the world after Disney, with 30 million visitors worldwide and 13,000 employees.

At its headquarters in Poole, John Drake is working to help the organisation achieve its ambition of catching up with Disney. He was previously at Tussauds before it merged with Merlin in 2007. His team influences about £80 million of annual spend, largely covering directs, but including some areas of indirect spend. He deals with a huge spectrum of issues but some specialised areas - such as theme park rides, wax figures and costumes - are handled by creative and category teams.

Recent projects included the renewal of beds, toiletries and TVs for the Alton Towers hotel, and he is sourcing alternative food for Sea Life centre inhabitants to secure savings.

"We use raw or frozen wet fish, but it has to be filleted to avoid waste contaminating the tank floor. It's labour-intensive and costly because it requires freezers to keep it fresh.

"We're moving to a pellet, which is a concentrated food. It should deliver £250,000 savings without any detriment to the fish or their appearance."

Fish cuisine aside, Drake has made it his mission to save the group millions and says much of this will be possible as a result of economies of scale following the merger.

"When Tussauds and Merlin came together two years ago, we worked out we would be able to make savings through volume on the overall spend. The combined volume is geared to deliver £6.5 million savings to the business in the next three years."

Drake's team is working through duplicate contracts to see where savings can be made. For example, he says: "We had three Coca-Cola contracts - two were Merlin's and the other was with Tussauds, but we now have a single deal."

In addition to securing "maximum value" the team is looking for opportunities with big brand partners such as Coca-Cola, Nestlé and Heinz to do "something positive for the environment".

They're working with Coca-Cola and LEGOLAND on a recycling scheme to brand bins at the attraction and sell waste cooking oil back to their food service provider which is converted into bio diesel to fuel trucks for future deliveries.

While the economy has been the biggest challenge for the past two years it can also work in their favour, says Drake.

"Fewer people are travelling abroad so they are taking more day trips. In addition, the European market is coming to the UK to take advantage of the strong euro. So they are shopping in London but also sightseeing on the Eye, or visiting Madame Tussauds.

"However, the corporate events market has fallen so we are looking at, for instance, sourcing a cheaper brand of champagne which will save us money without compromising the luxury experience."

Drake says the range of stakeholders he must please and their differing requirements are both the most challenging and most enjoyable aspects of his job.

"Alton Towers has 550 acres and plenty of warehouse space, whereas Sea Life Centres have less storage so purchasing for them is more challenging."

But, he adds: "The leisure business is fun. It's more interesting than working in a widget factory." Drake's goal is clear: "I hope to continue to contribute to the success of the business as it grows - the plan is to open five new sites worldwide every year for the next five years."

Helen Bennett, purchasing manager, Center Parcs

Short-break venue Center Parcs has four UK sites - Cumbria, Nottinghamshire, Suffolk and Wiltshire. Each village has sports and leisure activities, restaurants, bars, retail outlets, swimming and spa facilities, all with procurement needs.

Purchasing manager Helen Bennett says the constant variety her job offers sets it apart from other procurement roles: "I never know what I'm going to be dealing with from one day to the next. The speed of delivery is integral in the leisure industry, particularly in the short-break sector. It is very consumer-driven because if a guest has a need we must respond to it fast. We also need to respond to leisure trends quickly."

Bennett has worked at Center Parcs for five years. Previously she held purchasing positions with chocolate company Thorntons and Boots chemist, which stood her in good stead: "I brought with me experience in buying a range of products from my time at Boots. And Thorntons gave me the food repertoire because it has cafés alongside shops. I had some furniture sales experience, too, so I drew them all together."

She oversees a team of 12 who buy indirect goods, leisure equipment and retail items, as well as food and drink. Among things she has helped source is a "water-walker" - a giant plastic ball used on lakes in the parks which guests climb into for a walking on water experience. Another is "X-Out" golf balls which stay within the confines of the range.

When Bennett joined the company she implemented a shift in the way purchasing functions: "We had to change the way we work with procedures, processes and reputation. I wanted to focus on purchasing, not operations. It is easy in leisure companies to get sucked into operational, day-to-day problems, when there are other people that do that. We are a strategic purchasing team so we should think about what is best for the whole company. We need to drive it forward."

Center Parcs' flat management structure means directors are involved with approving many items, says Bennett. "For example, we have more than 800 accommodation units in every village and some of them have four bedrooms. This means when we make a decision on which light shade we purchase it can become extremely important because it will go into nearly every one, dependent on grade."

Where possible she encourages group deals to gain savings, but regional differences mean some variations are necessary.

"Guests have varied amounts to spend so you procure for a range of budgets. Also, there are differences such as the mini-train at Longleat which is necessary because the hilly terrain can cause problems for elderly or less mobile guests."

Center Parcs has had record bookings this year because of fluctuations in the euro and the recession spelling the end of long-haul holidays for many. However, getting people into the park is only half the battle. "It can be challenging to get guests to spend on site.

"If they have a limited budget, they may opt for self-catering rather than use the restaurants. Similarly they may choose to take part in fewer leisure activities or not spend as much in the shops."

Leisure procurement gives a completely new perspective on the world of purchasing, says Bennett. "You have to work hard, and you need experience to cope with the variety thrown at you, but as long as you stick to best practice - and I will fly the CIPS banner here - you can't go far wrong."

Paul Connelly, head of purchasing,Beacon

Beacon's deal with Chester Zoo requires a good understanding of a range of demands and an insight into the 'end user'. In some cases, this could be a monkey, says Paul Connelly. "Chimps love blackcurrant juice or Bovril with meals."

The consortium won the three-year contract at Chester Zoo just over a year ago. It provides a purchasing service as an extension to the zoo's own management team.

It is responsible for improving deals in all supply categories, agreeing new purchasing strategies as well as ensuring compliance to negotiated deals. It also provides specialised and ad hoc advice to support the business. "We are sourcing elephant-shaped biscuits for the shops, as well as considering animal food needs such as over-ripe or under-ripe fruit," says Connelly.

His team are presented with different challenges each time they meet the client to discuss purchasing support. The requirements the zoo has as a charity, alongside maintaining its rating as one of the top 10 of its kind in the country, also help it constitute an interesting purchasing experience.

"When we started to work with Chester Zoo it would be fair to say it had a dispirited approach to purchasing. Our aim was first to consolidate the supplier base, also to ensure the reduced number of quality suppliers could be maintained - or improved.

"There was also a desire to cut down the vehicles in the park for environmental reasons. And there are narrow time slots for certain parts of the park to take a delivery (to avoid visiting periods).

"We persuaded the ice-cream suppliers to invest in refrigerated space within the retail units to increase the on-site stock, reducing the need for a daily delivery. This had a knock-on effect of cutting the carbon impact of purchasing, and looking after CSR credentials."

And, despite Beacon's lack of experience of working with zoos, it was able to demonstrate it understood the business and could respond to its needs. "We recognised one approach doesn't fit all because the sector is so diverse. We used our general purchasing expertise and category knowledge and the team's experience to deliver results."

And Connelly hopes Beacon will remain part of the zoo's quarter of a billion pound, five-year plan to transform it into the largest conservation and leisure attraction in Europe. It has just opened the £5 million Realm of the Red Ape - an Indonesian forest exhibit home to groups of endangered Sumatran and Bornean orangutans. Although Beacon doesn't deal with the purchase of animals, Connelly jokes: "It's only a matter of time until we have someone going over to the Middle East to source Siberian tigers."

SMaug2009