HUMAN RESOURCE CHALLENGES
AT ASSOCIATED BIRTISH FOOD
Capturing Strategic Contribution
An individual communication created by:
Owner: Wittington Investments
Headquarters: London, United Kingdom
CEO: George G. Weston (Apr 2005–)
Revenue: 13.88 billion GBP (2021)
Number of employees: 128,000 (2022)
• This company, which is headquartered in
London, England, is one of the biggest food
processing and retailing companies in the
• Sugar and baker's yeast are produced by its
ingredients division, as well as emulsifiers,
enzymes, and lactose..
Associate British Foods plc, 2022.
FOOD PROCESSING AND RETAILING INDUSTRY
• A growth of over 500 billion U.S. dollars since the previous year has been reported
for the global food market in 2021, generating approximately 8.27 trillion U.S. dollars
• Global food revenues are expected to grow over the next couple of years, reaching
around 11.1 trillion U.S. dollars in 2027, according to Statista's Consumer Outlook.
Figure 1: Global revenue in food market
(Read et. al, 2020; Dora et. al, 2020))
ASSOCIATED BIRTISH FOOD WORKFORCE ATMOSPHERE
• ABF's professionals invest in the future of the company.
• The company has a clear sense of social purpose. Food and clothing provided by ABF
are nutritious, safe, and affordable to hundreds of millions of customers around the
• In addition to being a good neighbour, Associate British Foods plc strives to contribute
positively to its communities.
• ABF's environmental and social initiatives began long before sustainability or ESG
became mainstream terms.
(Associate British Foods plc, 2022).
KEY HR CHALLENGES
• By diversifying the company's operations, geographic footprint,
assets, and currencies, the Group mitigates the risk of materially
damaging its long-term growth and shareholder value.
• ABFs business activities are subject to risks and uncertainties as
with any other. Depending on the risk, it can affect the company
financially, operationally, or reputationally.
Diversified nature of operations and issues for workforce
(Wang et. al, 2020; Stanton, 2018).
Recommendation # 1: Processes and controls that
effectively manage risk
• To successfully manage direct risks, ABF should
continue to strive for improvements to its risk
Recommendation # 2: Focus on investment in
• In addition to physical safety, investments in the
people of the ABF are fundamentally important,
including their safety, health and wellbeing.
• Associate British Foods plc, 2022. Home>Downloads. [Online] Available at:
http://www.abf.co.uk/tools/header/downloads[Accessed 19 October 2022].
• Associated British Foods plc, 2013. Annual Results Announccement Year ended 14 September 2013, s.l.:
s.n.Barney, J., 2012.
• Strategic Management and Competitive Advantage. s.l.:Pearson.Goold, M. & Luchs, K., 1993. Why
diversify? Four decades of management thinking. Academy of management Executives, 7(3), pp. 7-
25.Weston, G., 2022. Home>Downloads. [Online] Available at:
pyJF7rInPiZl1vMVWBgUQ&bvm=bv.61535280,d.d2k[Accessed 19 October 2022].Read more at:
• Read, Q. D., Brown, S., Cuéllar, A. D., Finn, S. M., Gephart, J. A., Marston, L. T., ... & Muth, M. K. (2020).
Assessing the environmental impacts of halving food loss and waste along the food supply chain. Science
of the Total Environment, 712, 136255.
• Dora, M., Wesana, J., Gellynck, X., Seth, N., Dey, B., & De Steur, H. (2020). Importance of sustainable
operations in food loss: evidence from the Belgian food processing industry. Annals of operations
research, 290(1), 47-72.
• Goddard, E. (2020). The impact of COVID‐19 on food retail and food service in Canada: Preliminary
assessment. Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie.
• Gerhardt, C., Suhlmann, G., Ziemßen, F., Donnan, D., Warschun, M., & Kühnle, H. J. (2020). How will
cultured meat and meat alternatives disrupt the agricultural and food industry?. Industrial
Biotechnology, 16(5), 262-270.
• Stanton, J. L. (2018). A brief history of food retail. British Food Journal.
• Wang, Y., Xu, R., Schwartz, M., Ghosh, D. and Chen, X., 2020. COVID-19 and retail grocery management:
insights from a broad-based consumer survey. IEEE Engineering Management Review, 48(3), pp.202-211.
Notes de l'éditeur
Associated British Foods plc (ABF) is a British multinational food processing and retailing company headquartered in London, England. Its ingredients division is the world's second-largest producer of both sugar and baker's yeast and a major producer of other ingredients including emulsifiers, enzymes and lactose. Its grocery division is a major manufacturer of both branded and private label grocery products and includes the brands Mazola, Ovaltine, Ryvita, Jordans and Twinings (Associate British Foods plc, 2022). Its retail division, Primark, has some 384 stores across several countries, predominantly Germany, Ireland, Netherlands, Spain, and the UK. ACH Food Companies is an American subsidiary. Associated British Foods is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. On 26 March 2011, Associated British Foods, and its parent company Wittington Investments, were targeted over tax avoidance by UK Uncut during anti-cuts protests. The tax avoidance scheme involved moving capital between ABF/Primark and the affiliated Luxembourg entity ABF European Holdings & Co SNC by means of interest-free loans, avoiding tax of about £9.7 million per year Twinings (Associate British Foods plc, 2022). The protest took the form of a mass sit-in in Fortnum & Mason. In February 2013, the firm denied "illegal and immoral" tax evasion after it was accused by an international charity of moving its profits outside Zambia to reduce its tax bill. ActionAid said Zambia Sugar, a unit of AB Foods, had made profits of $123 million since 2007 but had paid "virtually no corporate tax" in Zambia. In October 2013, the company denied being involved in unscrupulous uses of land, in an article containing reports of forced evictions by other companies Twinings (Associate British Foods plc, 2022).
The food industry encompasses all activities from farming and food production to retailing and food services. Over 18.6 million hectares of farmland are used by the food industry in the UK for animal husbandry and to grow crops (Read et. al, 2020). The production output of the UK's food industry is not sufficient to feed the country and only close to 55 percent of food consumed in the country was made there. Over a quarter of all food consumed in the UK comes from the European Union. The revenue of the entire food market in the UK is estimated to be just over 157 billion British pounds (Dora et. al, 2020). The industry turns fast, the assortments are highly dynamic. Continuous product development and sales innovations as well as fierce competition characterise this industry. Consumers focus on quality, sustainability, origin and processing of the food. Food retail bases on a complex logistics system from goods delivery to product-specific storage to order picking in the supermarket - even while the customers are in the shop. This is all about precise processes and dependable availability with high standards for hygiene and safety (Dora et. al, 2020).
At ABF, the company professionals are invested in future. The management is committed to maximising value for stakeholders, including employees, customers, suppliers and shareholders, through the business it does. The company has a clear sense of social purpose. ABF works hard to provide safe, nutritious and affordable food, and to provide good quality, affordable clothing to hundreds of millions of customers worldwide. The company strives to be a good neighbour and contribute positively to the communities in which it operates (Associate British Foods plc, 2022). Acting responsibly towards people and the planet is not a new concept for ABF, indeed many of company’s environmental and social initiatives started out long before the terms ‘sustainability’ or ‘ESG’ became mainstream.
ABF’s food and ingredients businesses are highly efficient at maximising the value that can be derived from the crops and raw materials they use. This makes good commercial sense and it is also aligned with best practice environmental principles, prioritising waste prevention and reuse wherever possible. Our retail business has an industry-leading sustainability strategy based upon Primark’s well-established Ethical Trade and Environmental Sustainability programme, developed over a decade to ensure that those working in Primark’s supply chain are treated properly and that our products are made with respect for the environment.
The delivery of ABF’s strategic objectives and the sustainable growth (or long-term shareholder value) of our business, is dependent on effective risk management. We regularly face business uncertainties and it is through a structured approach to risk management that the management is able to mitigate and manage these risks and embrace opportunities when they arise (Stanton, 2018). These disciplines remain effective as the company faced increased economic volatility resulting from the aftermath of COVID-19, which has been exacerbated by geopolitical uncertainty triggered by the war in Ukraine. The diversified nature of ABF’s operations, geographical reach, assets and currencies are important factors in mitigating the risk of a material threat to the Group’s sustainable growth and long-term shareholder value. However, as with any business, risks and uncertainties are inherent in our business activities. These risks may have a financial, operational or reputational impact (Wang et. al, 2020). The Board is accountable for effective risk management, for agreeing the principal, including emerging, risks facing the Group and ensuring they are successfully managed. The Board undertakes a robust annual assessment of the principal risks, including emerging risks, that would threaten the business model, future performance, solvency or liquidity. The Board also monitors the Group’s exposure to risks as part of the business performance reviews conducted at each Board meeting. Financial risks are specifically reviewed by the Audit Committee.
ABF’s decentralised business model empowers the management of businesses to identify, evaluate and manage the risks they face, on a timely basis, to ensure compliance with relevant legislation, ABF’s business principles and Group policies (Stanton, 2018). Emerging risks are identified and considered at both a Group and individual business level, with key management being close to their geographies. These risks are identified, as part of the overall risk management process, through a variety of horizon-scanning methods including: geopolitical insights; ongoing assessment of competitor activity and market factors; workshops and management meetings focused on risk identification; analysis of existing risks using industry knowledge and experience to understand how these risks may affect us in the future; and representation and participation in key industry associations (Wang et. al, 2020).
Processes and controls that effectively manage risk In order to successfully manage direct risks, ABF should continue to strive for improvements to its risk management processes. During the year, the Audit Committee on behalf of the Board conducted reviews on the effectiveness of the Group’s risk management processes and internal controls in accordance with the 2018 UK Corporate Governance Code. Our approach to risk management and systems of internal control is in line with the recommendations in the Financial Reporting Council’s (FRC) revised guidance ‘Risk management, internal control and related financial and business reporting’. Focus on investment in people The belief that companies do well when they act well is deeply ingrained in all of us, from the Board and the leadership team, across all our businesses and colleagues. Our rigorous commitment to responsible business practices, combined with entrepreneurial flair and targeted capital investments, are how the management operates at ABF. Investment inABFs people is fundamentally important, including their safety, health and wellbeing, with an increasing focus on mental and financial health as well as physical safety.
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