British farmers, who dig deep to nurture ingenious brand building strategies, can boost the uptake of their produce by foodservice operators and capitalise on a portion of the UK food and beverage market worth £40bn a year, reveals an award-winning report by Nuffield Farming Scholar and Managing Director of catering procurement specialist Partners In Purchasing (PIP), Diana Spellman.
With a scholarship from Nuffield Farming Scholarship Trust under her wing, together with the support of HSBC, Spellman has embarked on a four-year exploration of trading relationships and of the economics, choices and attitudes of the farming community in the UK, Germany, Holland, Italy and the USA, intent on finding solutions to British farmers’ frustration at their inability to influence the factors that determined their revenues.
As a food broker within the foodservice supply chain – which incorporates such operators as restaurants, hotels, schools, hospitals and leisure centres – she challenged herself to deliver a series of guidelines for farmer producers of finished goods which helps them examine the commercial viability of their product and recognise foodservice as a workable route to market.
“The biggest barrier to commercial success in the food supply chain was a lack of understanding among different stakeholders of how other sections of the supply chain worked,” says Spellman. “For our clients, exclusive and premium products, quality ingredients and the service of delivery are the most important criteria when considering a supplier. Price is relevant, but only in terms of value for money.”
For every Pound spent in the UK, 38p goes on food, so producers more adept with a retail environment should understand how to effectively adapt their production and distribution to suit the foodservice sector and seize new trading opportunities. Identifying consumer preferences and the motivations of other players in the supply equation can be achieved through continual market research.
Supermarket chains are a power to be reckoned with, says Spellman, often imposing their own production rules in order to maximise their own profit. Farmers with only one source of revenue have no other outlet for their produce and must often surrender to supermarket demands to sell their produce, culminating in unfavourable terms or even losses. Foodservice is a viable alternative, but common perceptions are that foodservice is too small, fragmented and that it is difficult to set up profitable supply chains. This report challenges these views.
Consumers in the foodservice market place have been sending strong signals to food buyers that they want to eat safe food. Where has it come from and how has it been produced? The corporate staff dining market place is an ideal market for the emerging producer to test new products, where companies are supplying 1.5bn meals to employees. Mastering tricks of trade in this supply chain could eventually open doors to the wider 8.7 billion-meals-a-year foodservice market, creating the opportunity for farmers to benefit from high volume orders and long-term business sustainability.
Indigenous food consumption has dropped from 85% to 65% over 18 years and production of all food has dropped from 75% to 60%, but with the UK’s favourable climate for growing orchard crops and the technological advancements to create new varieties and attributes that will strengthen Britain’s competitive position, Spellman tells of a huge opportunity to capture consumer demand for locally produced fruit and claw back market share lost to New Zealand and South Africa.
Traditionally, Nuffield studies have sought to unearth best practice overseas, but Spellman’s breakthrough report – “Exploring how British farmers can develop a brand to market their produce to foodservice” – divulges revealing examples of thriving agricultural practices right here in the UK, despite stiff competition from imports of finished goods. She tells of tried and tested means to instil consumer confidence via recognised endorsement schemes like LEAF and Red Tractor and unravels the delicate art of product pricing to attract investment and generate profits.
Rewarding Diana Spellman with a Highly Commended Award for the quality of research and innovation delivered in her study and report, Nuffield UK Chairman, Tony Pexton OBE NSch said: “I don’t normally “mark high” but I feel that this report opens a very important door and offers constructive help on walking through it.”