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Food for
thought
Not-for-profit cooperative NAFDA is strongly focused on
delivering the best outcomes for its member base.
IMAGES

SCOTT EHLER

or more than 30 years, NAFDA has been a leading food-service

procurement and marketing company in Australia. Owned and
operated by its member distributors, it is committed to providing its
customers with unrivalled service, quality of product, and value for
money. The not-for-profit organisation is broadline and serves all
segments of the industry with frozen, chilled, and dry grocery products. It
currently operates 63 distribution outlets across the country, with 1,250
employees working to deliver food to over 33,000 clients. Additionally, NAFDA
works with manufacturers to produce its own label of goods, and it has supply
contracts with a number of government organisations in the health, aged care,
and education industries.
Brad Lee has been CEO of NAFDA since July 2015. He has extensive experience
in the food-service sector, mainly in commercial roles working for the likes of
GW Foods, Don Smallgoods, Simplot, and Nestl. When he first took on the
position, he implemented a new leadership team to drive the cooperative
forward, refine its operations to cut down costs, increase efficiencies, and

Name Brad Lee

Company NAFDA
Position CEO
HQ Sydney, Australia
Employees 1,250
55

EXECUTIVE INTERVIEW

rationalise the logistics strategy. He is

incredibly passionate about the work
the business is doing, and is always
striving to deliver more to customers
while providing an alternative to the
big supermarket brands.
NAFDA was started by a group of
distributors in New South Wales and
Victoria who got together and found
they had a lot of synergies in
procurement, marketing, and buying
power, Brad explains. By joining
forces rather than acting individually,
they decided there would be many
benefits, and that a not-for-profit
collective would bring greater success.
So thats what they did. They all got
together and formed a buying group
that dealt as a singular office with
manufacturers and suppliers. They
could then leverage the size in scale
and buying power, and translate that
into more competitive pricing with

EXECUTIVE INTERVIEW

Our members are all independent. They still act autonomously and
run their own businesses, but we sit across the top from a
procurement, sales, and marketing perspective. - Brad Lee

everything from logistics through to

the supply chain. The profits leftafter
the running costs had been taken
outcould then be distributed among
the cooperative membership.
Basically, NAFDA is the principal. Our
head office is in Parramatta, Sydney,
and our members are all independent.
They still act autonomously and run
their own businesses, but we sit across
the top from a procurement, sales, and
marketing perspective, says Brad.

dovetailing that into NAFDA to help

generate that extra $250 million. That
will in turn add greater value and
more bargaining and negotiation
power with our suppliers to drive
competitive deals.
Brads approach to this growth is to do
it in a collaborative fashion. He doesnt
want to just ask for more money from
NAFDAs suppliers; he wants to assist
them in growing their own businesses
also. I have been a supplier before, so I
understand the nature of the supply
and manufacturing industries, he
notes. One of the biggest costs for
them in Australia is supply-chain
logistics. That is why I am looking to

NAFDA currently has a turnover of

approximately $750 million, and Brad
has a strategy in place to grow that to
$1 billion over the next 12 to 36
months. That will come through
supporting our suppliers and
manufacturers as well as through the
recruitment of new members into the
cooperative, he says. We want to be
taking their top-line sales number and

From entre to dessert...

Weve got you covered.
Australias leader in a wide range of catering
and foodservice products, including:
Chips

Snack Food

Vegetables

Main Meals

Fingerfood

Seafood

Fruit

Desserts

w w w. s i m p l ot fo o d s e r v i c e .c o m . a u

Inghams are
proud to be a
supporter and
business partner
of NAFDA

work in an open-book fashion with our

suppliers to help them strip costs out of
the logistics and supply-chain process.
How do we do that? By buying less
frequently and in larger quantities such
as truck and container loads, by taking
a real activity-based commercial view
to costs, and by delivering growth and
pricing plans that will benefit them.
As well as doing what it can to recruit
new members, NAFDA also wants to
ensure that it galvanises its existing
relationships with present members.
We have excellent relationships with
companies such as Fonterra, Simplot,
and Inghams, Brad says. There is a
great strength and loyalty from our

EXECUTIVE INTERVIEW

EXECUTIVE INTERVIEW

independent suppliers. We really

partner with them: we have one-on-one
meetings, open communication lines,
and full transparency.

each area. Yes, size and scale helps, but

having worked as a supplier and having
been my own self-employed distributor
back in the day, I truly believe that we
want to look, feel, touch, and smell like
a corporate company but with the
agility and autonomy to act as an
independent organisation. We want the
best of both worlds in that regard.

Generally, the way the food-service

channel operates is that, for accredited
or preferred suppliers, your ticket to
play is a rebate structure or a
commercial arrangement whereby
NAFDA is rewarded for supporting its
preferred suppliers. Having said this,
the suppliers are also responsible for
maintaining price in the marketplace.
So our suppliers have the autonomy
and agility to be able to deal as a
collective with NAFDA, or individually
with its members to grow their
businesses. They have discretionary
funding that they can use where they
see fit, and where required, to be able
to work with their local members and
ensure their manufacturing brands are
not only sold in the marketplace but
are protected. NAFDA is very much
about brand fairness and Australian
manufacturing brands.
The Australian food-service channel
is worth $45 billion, and 33 cents in
every $1 spent goes to the out-of-home
retail channel. For this reason, Brad
believes interest from private equity
will be inevitable at some point down
the track. There is no question about
that, especially given the roll-ups
globally and locally, he says. And it
all began in Australia with food
manufacturers. We saw private equity
purchase Inghams and Primo, just to
name a couple, and the next extension
was then to go into the distribution
hubs for those brands.
Given the value of the food-service
channel, it is certainly a very attractive
option for private equity. But as we
know, when they purchase, they strip
costs out; change management; run
lean and mean; leverage debt; and
then eventually they IPO list, pump the

Brad recognises that NAFDA plays a big

part in Australias growth, and he says
he is proud to be leading such a
reputable and trusted brand. He is
excited about what the future has in
store, and is focused on delivering a
strategy for long-term prosperity. He
explains that a key pillar of this will be
centred on IT and e-commerce.
NAFDA owns and operates its own IT
business, which acts as a hosting
model for our members. So we host
them for everything from mobile apps

I believe that knowledge is power. - Brad Lee

share price, and finally they exit. That
is not what NAFDA is all about.
NAFDAs board of directors, its
management, and its members are
unanimous in that NAFDA will remain
a cooperative, not-for-profit,
independent organisation. We are

63 strong at the moment in terms of

distributors, and we dont have
delusions of grandeur to be at 100 or
150. We will be strategic about who we
recruit, and the reasoning behind
choices will be based on growth
opportunity, geographic demographic,
and who the market specialists are in
SINCE 1926

58

Australias Favourite

to emails and telephones. We are a

service provider internally to our
membership, but we also have the
autonomy to externally host. It is a
separate business, so we can go and
solicit new business and we run on
the same platform as the Australian
Government, the Australian Taxation
Office, and Westpac. Its a bespoke
model designed by NAFDA in
conjunction with Microsoft.
The reason we are doing this is
because I believe that knowledge is
power. We need to be across what our
members are doing. We are not simply
analysing member sales, its all about
fully supporting them in every aspect,
particularly around data overlayed
against local and global trends. We
have seen the proliferation of digital
and e-commerce, and this platform will
allow us to move into that era. This is
where the future is for NAFDA.