The art of distribution

Leading global speciality chemicals and innovative ingredients distributor, Azelis supplies a diverse range of products and services, to over 27,000 customers worldwide. The company’s Food & Health division provides food manufacturers with high quality food ingredients, effective auxiliary materials and a wide range of additives to help create the taste, texture, performance and appearance they need for their food, health and nutritional products. Since its inception in 2001, through the merger of distributors Novorchem in Italy and Arnaud in France, Azelis Group has pursued a ‘growth by acquisition strategy’, purchasing small and medium specialty distributors, whilst at the same time developing organic growth through the identification of synergies among member companies. Today, Azelis has established its presence in more than 40 countries and 80 locations globally.

Read on to find out more about how Azelis, as a distributor, managed to secure its foothold in the industry, and how it plans to continue helping customers overcome challenges faced in keeping up with changing food trends.

Demand for quality

When  asked to share insights on the evolution of demand for ingredients in China in the last 10 years, Mr. Conrad Bucheleres, Managing Director, Azelis China, commented: “For one, I believe all of us can feel that consumers and food service industry
insiders are now increasingly demanding high quality from ingredients in general. Both our team and our customers are already feeling the effects from this change. About 15 to 20 years ago, there were some food companies that underestimated the importance of maintaining the quality of their products, choosing to turn a blind eye to minor problems that surfaced. Today, in an industry where paying great attention to quality is a prerequisite to survival, these companies no longer exist.” According to Mr. Bucheleres, businesses today are tightly controlled from product quality to production environment, with laws and regulations to follow and public opinion to take into account. As a result, each step of the production process is strictly monitored, and even a minor problem that surfaces could result in a product recall or return of goods. Mr. Bucheleres believes that this is an inevitable trend, and that it is bound to continue.

As a distributor, Azelis takes many precautions to ensure high quality. For example, the team created a position of "quality management" for its customers, responsible for quality monitoring. Although the business is not directly involved in the production process, they still have very meticulous management of their warehouse, logistics and partners. In addition to distribution, Azelis also purchases goods and exports these goods abroad. To ensure food safety is still maintained throughout this process, they adopted an assessment procedure in the selection of its pool of manufacturers. This way, Azelis can guarantee the goods that are exported to other Asian countries and all over the world are exempt from any problem.

Growth areas for focus

Among the range of ingredients that Azelis distributes, Mr. Bucheleres shared that the company has witnessed the most growth for its hydrophilic colloid. There are many types of hydrophilic colloid, such as gellan gum, pectin, xanthan gum, carrageenan and CMC, which are usually used in dairy products and beverages to create a stable texture or suspension, for the protection of the protein. Over the last three to five years, the dairy and beverage industry in China has developed rapidly – various products appear and get replaced, in an endless stream. As food producers seek to extend the shelf life of these products, they turn to hydrophilic colloid. The ingredient plays its unique role of protecting the stability of these products and prolonging their shelf life.

Asia’s distribution landscape

As a distributor, Azelis is highly dependent on factors such as the nature of trade policies in the region. Mr. Bucheleres explained the unique situation that Azelis is in, “Our company has been engaging in the import and export business for many years, so it
would be ideal if global trade could be free. However, government policies are not made by us. Countries may suddenly choose to raise the threshold for imports and exports, creating trade barriers.”

Lastly, this allows for suppliers to better manage their distribution channels. The pursuit of these benefi ts would lead to a reshuffl e and re-integration of distributors in Asia Pacific.”

Meeting customers’ needs

In an unpredictable landscape such as that of the food industry, it is inevitable that businesses, big and small, will struggle to sustain their standing. Mr. Bucheleres believes that the top challenge that their customers are currently facing is learning to grasp
trends and leverage opportunities. On a similar note, another challenge they face is establishing themselves as brands that consumers would be willing to spend money on. Mr. Bucheleres foresees that brand management will be a more and more significant topic for manufacturers in the future as they recognise the importance of building up and maintaining one’s reputation.

They not only care about the product’s price, but also its ingredient label. They are willing to absorb knowledge relating to food safety and health; they are willing to pay more for the food they recognise as healthy.”

Mr. Bucheleres also pointed out that ‘clean label’ is the buzzword in the consumers’ search for healthier and safer food. “Even though consumers do not know exactly what it means, they cling to this trend. Currently in China, there is no complete law to regulate or clarify what it takes to define a ‘clean label’. However, in developed countries such as Europe and America, we can see clear regulations of what the standards of ‘clean label’ are. As we can see, developing a definition of this new trend, making it concrete, accurate and standardised must be the future of the development of food industry.”

Article written by Amanda Soo.
Featured in Food & Beverage Asia, June/July 2017 issue. Read the full issue here.