Frozen euro

Brrr! It sure is cold out there – financially speaking, almost glacial – but as the economic landscape stiffens under several inches of recessional snow and as fresh produce companies great and small start to feel that primal urge to roll themselves up in a blanket and go into commercial hibernation, Fruitnet.com has decided to hand out the snow-shoes, gloves, skis and climbing gear to all those in the fresh produce industry who are brave enough to stay outside. Wrap up warm, folks, because we’re going to tackle these bleak conditions head-on with our guide to surviving the downturn.

1. Getting Better

First and foremost, quality is key. If your products or services aren’t the best around, then the chances are your customers won’t see as much value in paying for whatever you’re offering. The more value you can cram into the things you’re selling, the more likely it is that people will want to pay for them. Do whatever is necessary to maintain and improve quality and the market will be more ready to soak it up like a sponge. Also, don’t concentrate so much on increasing productivity that your quality suffers. Keeping quality high while cutting out any waste will lead to an automatic improvement in productivity.

2. Dear Prudence

Keep an eye on your costs and make sure they are as low as possible, of course without compromising quality and your company’s ability to hold on to its key customers. If certain projects appear to be leading nowhere, then don’t throw good money after bad. Spending is still important, but it has to be on things that will benefit the company’s bottom line within a set period of time. This is true even in times of economic boom, because healthy companies will be well placed to survive any future downturn.

3. With a Little Help From My Friends

If your costs are threatening to pull you under, it may be that other companies are in the same boat. The answer may therefore be to establish some kind of alliance, or even form a cooperative, which will help you and your partners get back on dry land and achieve economies of scale that might otherwise be out of reach.

4. In Spite of All the Danger

Not everyone suffers during a downturn, but to prosper companies must harness the prevailing economic headwinds wherever possible. If new opportunities arise, don’t be afraid to establish new ventures. Perhaps this is exactly the right time to invest in that new project you’ve been thinking about? According to real estate firm Bayleys, farmers in the UK and Ireland have been snapping up farms in New Zealand since the start of the year for around two-thirds of the price they would have had to pay for them two years ago. Nothing ventured nothing gained; strike while the iron’s hot; who dares wins: there’s a reason why these phrases are so often used and that’s because, as Sir John Templeton put it, “the time of maximum pessimism is the best time to buy”.

5. Help

Rising unemployment might have a detrimental effect on consumer spending, but for fresh fruit and vegetable companies this might present a chance to take on more staff. According to recruitment agencies who specialise in the fresh produce sector, the slump may actually offer a “once in a lifetime” opportunity for European fresh produce businesses to find high-calibre potential employees who would otherwise be in work. This could give your company a real boost and expand its commercial potential. Don’t be afraid to seek support and advice if that’s what it takes. No-one will thank you for putting in loads of extra hours if it doesn’t achieve positive results. Employing someone to take up some of the slack could definitely be worthwhile in the long run.

6. Money (That’s What I Want)

Investing what in the short term might be more money in things like technology and new facilities could in reality be the thing that puts your company on a more reliable and sturdy path through the economic mire. As machinery and technology suppliers look to secure new orders wherever they can, the chances are that their prices will be more flexible during the next few months. With energy prices remaining high, the potential return on investment in such items might be achieved sooner than you thought.

7. Drive My Car

If you are a supplier, take into account how customers and consumers are behaving and adjust your own strategies accordingly. For example, research suggests more and more shoppers are limiting themselves to a single, weekly shop in order to buy in bulk and also save money on driving to and from the store. It may therefore be better for you as a supplier to send bigger volumes at once, consolidating deliveries in order to trim costs.

8. Here, There and Everywhere

Try to build your customer base closer to home, perhaps by building a reputation that satisfies the growing consumer demand for locally sourced goods. This may provide you with a source of revenue that has greater margins thanks to the lower transport costs involved. Alternatively, why not target emerging markets? In countries with sizeable populations such as China, India, Russia, Saudi Arabia, Brazil, South Africa, Vietnam and Indonesia, as well as in regions like north Africa and eastern Europe, the middle classes are expanding and providing the fresh produce industry with potentially valuable opportunities to spread the risk more evenly across different markets instead of concentrating on just a few.

9. Please Please Me

Expanding your business during a downturn is not impossible, and one of the best ways to do so is by understanding what consumers are thinking and satisfying their demands. Over the past year in Europe, there have been noticeable shifts to lower-priced products, to private label, to lower-value commodity items, to retail at the expense of foodservice and, within the retail sector, to more value-focused operators. Taking these factors into account is paramount. Recession was a major contributing factor behind a rise in potato sales in the US during the early 1990s, suggesting some products are better suited to withstanding the slump. If you’re selling fresh vegetables, maybe you need to think about selling a certain proportion as frozen?

10. Twist and Shout

Besides having a company website, the internet offers plenty of other ways to get your goods or services noticed through social networking sites like Twitter, Facebook, LinkedIn or YouTube. Furthermore, companies are increasingly uusing the internet not only as a promotional tool but also as a kind of virtual toolshed for all manner of commercial activities. Need to connect with people in the industry? Get signed up to Fruit Logistica’s Virtual Market Place and the chances are they’re listed. Need to recruit someone? Choose from one of several online jobs websites which can save you money on expensive recruitment commissions. Need to find out more about existing and potential new markets? Bookmark news and information services like Fruitnet.com, which offer useful and relevant information specifically about the fresh produce trade. By organising your business using online solutions and investing in technology, you can save you money, even in the short term, and offer a good return on that initial outlay. Having quicker access to a greater volume of information relating to how your business is running will provide you with an edge over your competitors.

11. I Need You

Try to identify those areas of your business that are of real value to other companies in the industry and then tell them about it. Other companies will be doing the same as you – looking for ways to maximise returns – so make sure they are aware of how you can make them money.

12. Love Me Do

During a downturn, many companies turn first to their marketing budgets in order to trim costs, but naturally we feel advertising is not as indispensable as you might think. But don’t take our word for it! Research carried out by McGraw-Hill in the US shows that the companies who continued to advertise during the recession of the early 1980s averaged higher sales growth than those that discontinued such activities. If your clients can no longer see your brand, the chances are they’ll be looking at your competitor’s brand instead; if you want to maintain your profile and remind the industry your company remains in good shape, one of the last things you should be doing is removing it from the public eye.

13. Don’t Let Me Down

Don’t forget your past clients. Do whatever you can to keep them. Sweeten the deal where possible and make sure they know that you are doing all you can to help them survive the recession. If you have decided to cut your budget in other parts of the business, why not put some of this back into offering additional free services to existing customers in order to keep them on side? Try to secure bigger, longer-term orders which will provide you with further economies of scale.

14. Come Together

The fresh produce industry is built on a bedrock of personal contacts and, in many cases, verbal agreements to do business rather than written contracts. As in any industry, this personal contact plays a crucial role in making business decisions a little less hard-nosed and calculating, maybe even affording you some additional breathing space when your company is in a particularly tight corner. For that reason, time spent with existing and potential customers, as well as your own suppliers, is time well spent. Seek out any possible opportunity to meet face-to-face with the people that matter and make sure they know who you are. Take key existing clients out for meals or to non-work events like football matches or concerts, while harvesting new contacts at conferences and trade fairs. Also, don’t forget your business cards and make sure your company website is up to date – first impressions count, but when the people you’ve met go online to find out more, that second impression is also crucial.

15. Carry That Weight

Strong management and leading from the front is essential. Don’t be a shrinking violet and shy away from making decisions; your staff will feed off that kind of attitude and begin to doubt both the company’s future and their own position. Updating your business plan on a regular basis and adjusting the way you do business to suit the current economic climate will make everyone far more confident that everything is under control and heading in the right direction.

16. All You Need Is Love

Finally, keep in mind all those things you love about the fresh produce business. Assuming you are in the business for all the right reasons, then that genuine passion will ultimately be what keeps you going and inspires those around you. If something is keeping you awake at night, be proactive and address the problem and don’t let it become all-consuming. This might be a global recession on an unprecedented scale, but contrary to what some might have you believe, the answer is not to turn off the light at the end of the tunnel.