Farming’s a mere ‘cottage industry’ compared to grocery sector
For the past two years the annual convention organised by the Institute of Grocery Distribution (IGD) in London has discussed consumers’ growing preferences for home-produced food. At this year’s event, held last month at the Lancaster Hotel off Hyde Park, the 850 delegates had what they clearly regarded as more pressing matters on their minds. Annual growth in sales values that have been almost a given for years have reversed.
Today the big retailers are looking at an overall decline in sales of around 2% caused by the general economic downturn, which may not seem much until it’s compared with the consistent growth of the past.
This country is experiencing the biggest fall in real incomes for 35 years and one in five families is on or below the official poverty line.
These are unprecedented times and as IGD chief executive, Joanne Denney-Finch, said in her keynote presentation: “the food industry’s back is against the wall”.
The provenance of groceries was mentioned in passing and IGD research shows that consumers are still keen to know where and how goods are produced. But there were no farmers on the platform (NFU preseident Peter Kendall has spoken there in the past) and industry leaders were more concerned with what they needed to do to maintain market share for their company than with the profitability of those who supplied them.
For instance, Philip Clarke, Group CEO of Tesco, said his focus was on showing the customer Tesco was on his or her side and wanted to make their lives easier. And he went on to remind the audience that his company “had just invested £500 million in cutting the prices of a huge number of products”. He did not explain who was funding such largesse but I suspect the handful of farmer-suppliers in the hall could have enlightened us on where some of it came from.
As I sat listening, the power and scale of the grocery industry hit me once again. A retail turnover, even after recent reverses, of more than £140 billion; 3.6 million people employed; 50,000 apprentices taken on during this year alone; and so on.
UK farmers, the producers of more than half of the raw materials on which it depends look like participants in a cottage industry in comparison.
That feeling was reinforced as I watched the delegates at the convention. Few could have been over 40. The men were slim with sharp suits and even sharper eyes and spent each intermission punching their Blackberries or iPhones. The women looked even younger (although that could have been an illusion created by make-up) with long legs, high heels and short skirts. And both sexes were furiously networking as they scoured the crowd searching for the next opportunity to advance their careers.
The convention uses electronic gadgets enabling delegates to vote on issues during the event. Asked what their biggest headache was at present, the vast majority pressed their buttons to confirm their greatest concern was a combination of rising input costs and slower consumer spending.
But I didn’t feel too sorry for this upwardly mobile bunch. The firms they worked for had paid close to £700 for each of them to be there and that’s without the hotel or the posh dinner that night. They didn’t seem to be suffering personally from the woes they were discussing. And this was reinforced when they were asked from the platform if they knew the price of a bag of sugar. Only 20% got it right.
David Richardson farms about 400ha (1,000 acres) of arable land near Norwich in Norfolk in partnership with his wife, Lorna. His son, Rob, is farm manager.
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