What it takes to prosper in the global market
FARMING HAS to be businesslike to prosper in the modern market, delegates to last week's NFU conference were told by Joanne Denny-Finch, chief executive, IGD, last week.
"It's tough to plot your course in such fast changing conditions but I've met a lot of go-ahead farmers recently and I've learnt to have faith in your adaptability," she said. She said one key way of securing the future success of farming was through special business relationships with suppliers. Some businesses have already tested this using the business strategy model devised by global car-maker, Toyota.
"Toyota insists on transparency, sharing information, for all parties in the chain. And it shares expertise. If a supplier is struggling, Toyota tries to help. It hates to lose a good supplier. But it sets challenging targets for suppliers each year. These are achievable but only at full stretch. Any supplier that doesn't keep up the pace eventually loses the business," she said.
In this way, Ms Denney-Finch believes it is possible for farmers to deliver better value for consumers and develop long-term, sustainable partnerships which can deliver a reasonable pro?t. Improving collaboration between producer and supplier has also been a success for Toyota through its 'supplier as-sociations.'
Similar associations have been set up by companies which have worked with IGD and The Food Chain Centre. The purpose is to create a common sense of purpose, strengthen trust and relationships, develop and learn together and eliminate waste within and between businesses. Ms Denny-Finch cited partnerships between farmers, processors and retailers - Dairy Crest and Somer?eld, Grampian and Asda and RB Organics and Waitrose - as examples of good working partnerships.
In meat, cereals and dairy produce, IGD and the Food Chain Centre have been busy recruiting people from farming, processing and retailing to 'walk the chain' in search of improvements.
"Our data shows that the most pro?table farmers are particularly skilful at controlling their input costs, maintaining equipment and deciding when to use contractors. These are transferable skills. If farming means business then farmers must stay open to new ideas."
As well as competing in a global market she said the local marketplace was just as important to the future of farming. She said people were increasingly concerned with seasonality and local food roots and she highlighted Kellys Turkeys in Essex, as an example of a farm business which had addressed these issues successfully. "When people ?nd local food at a farmers' market, speciality store, supermarket or restaurant, they see something distinct and exclusive. So there's a receptive market for farmers who deliver high-quality, local foods, differentiated from the mainstream." She said farmers also had a range of opportunities in growing trends towards healthier and semi-prepared foods.
Opportunities are also on the horizon for farmers to supply big retailers who source goods from small producers. American company Wholefoods Market, which does just that, is due to open an outlet in the UK soon."UK retailers are already building up their range of natural, local and high quality foods. The arrival of Wholefoods will ramp it up further," Ms Denney Finch said. The way farmers could get involved with this is by innovating by themselves, or collectively through a co-op or by forging an alliance with a go-ahead processor. "British farming is being tested to its limits but I know you mean business and I'm betting on you to come through."
ONLINE RESOURCE TOOL
A FREE on-line resource is helping farmers like James and Lucy Barclay in Lincolnshire generate ideas for growing their market. The on-line library service - www.foodchaincentre.com - helps decisions on pricing, packaging and promotions. There is a mass of information on consumers which is interpreted just for a farming audience. There is also access to the biggest shopper database in the country, owned by dunnhumby, and which includes information on Tesco Clubcard shoppers which can be helpful to farmers who want to test out new ideas before committing themselves to a new project.
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