Since 1993, the mushroom industry has had a dedicated information service, promotional arm and crisis management firewall. The Mushroom Bureau has generated £1 million worth of coverage for the industry each year and staved off several potential crises, but unless there is a significant rethink in the next three months, it faces closure. Tommy Leighton talks to Victoria Lloyd-Davies, who has headed the Bureau from its inception.
When the leading players in the mushroom industry decided that the Mushroom Growers' Association (MGA) was no longer the ideal home for its press and promotional office, they began to channel funding into a new dedicated bureau.
Based on a membership fee of £80 a year and supplementary voluntary contributions, the budget for the London-based Mushroom Bureau has never been large.
However, neither has the mushroom industry in the UK ever been in such a parlous state. The rationalisation of the grower and supplier base has rocked the £350 million category back onto its heels. A long list of sizeable concerns have disappeared altogether; and the expanding, acquired or merged companies that remain continue to come under increasing pressure from their customers. In a commoditised category, margins have been squeezed and only those with the deepest pockets have survived.
Deep pockets can only bail out a company until they are empty though, and one crisis that the Mushroom Bureau is not charged with addressing is financial meltdown.
The large organisations still involved in the sector have been pummelled to such an extent that those who had initially deemed it worthwhile to invest in the generic Mushroom Bureau came to the conclusion that this type of discretionary expenditure could no longer be justified.
October 13, 2004 is D-day for the Bureau. On September 1, the 2005 financial pledge forms will be distributed to all present and lapsed members of the Bureau. By October 1, these should have been filled in and returned, in time for a concrete decision on the future to be made at a committee meeting 12 days later.
Lloyd-Davies says: "It was difficult to get people on board in the first 12 months of the Bureau, but from the mid-90s to 2000, we had a reasonable amount of money to carry out our main functions properly. It has always been the case that the smaller growers have generally made a donation in accordance with their size, but the larger growers have never done that. In 2000, our largest member resigned from the Bureau as well as the MGA. It was done as a genuine cost-cutting exercise and the company did not have an axe to grind, but others have taken their lead and now we have a situation where the leading players do not pay into the pool."
In fact, the three largest suppliers to the UK market - the Irish-based Monaghan Middlebrook and Walsh Mushrooms and Dutch-led Heveco - do not contribute at all. In the past some of the bigger companies have refused to pay their contributions whilst retaining membership. None of the UK's multiple retailers make a contribution either, so the Bureau exists around a core of support that mostly comes from the middle and lower end of the size scale.
"Retailers have been asked to contribute - they never have. They have also been asked to encourage their suppliers to participate; I don't know if they have done that but results would suggest otherwise. The cost-cutting is entirely down to the pressure that supermarkets have put on their suppliers," says Lloyd-Davies. "They have been placed in a position where they have to cut back on any expenditure they can get rid of and the Bureau was put in that category.
"That is all very well until the industry encounters a crisis. We have successfully negotiated two major crises and minimised the media exposure that could have been so harmful to the mushroom industry; and in these situations it has been said to us by the government that it is no use an individual company doing the talking. The industry has to be represented by a single body when it is confronted by problems such as e.coli and salmonella." It is rare within the fresh produce industry that a category has such close and well-developed contact with the consumer media world and the intelligent use of these contacts can go a long way towards diverting the desire of writers to trot out the types of irresponsible journalism that prove so damaging.
As a generic body, the Bureau is responsible for building consumption of mushrooms, irrespective of source. While the MGA has a UK-only bias, the Bureau is able to treat Polish product on the same terms as British, which ought to be an invaluable asset as the industry changes shape. The major retailers are unsupportive. Tesco has gone on record saying they don't think there is a role for any generic publicity," Lloyd-Davies says. "They believe they have a PR department and can handle it themselves. OK - but what happens if one of the smaller retailers, with no PR management skills in place, is at the centre of a food scare. Tesco cannot say that just because the mushrooms are not in their store everything is fine, as the public perception is of problems with the product, not a specific retailer. I think the Tesco view is short-sighted and narrow-minded."
Publicity worth £1m plus a year is unlikely to fall into the laps of an industry without a body to plan and implement the promotional and PR strategy either. Sponsorship of National Vegetarian Week this year, for instance, pulled in £150,000 of publicity on a budget of £8,000, at a time in late-May when the mushroom industry is in need of a pep as consumers switch from cooked meals to salad occasions. On a straightforward commercial note, Sainsbury's increased its sales of organic mushrooms by 15 per cent during the week, by featuring a Bureau-designed 'Feed your Head' sticker and recipe combo.
The mushroom sector is by no means unique in its inability to recognise what it might be losing, but Lloyd-Davies is not making idle hints. "Our funds will run out on December 31 this year," she says. "Only astute financial management has allowed us to carry on this far as we built up a small reserve that we have been largely running on since 2002. To run a decent PR campaign, we need a six-figure sum at least. The other alternative is to run a passive information service that still carries out the crisis management function, but where does the exposure of the industry come from then? Our website gets 600-700 hits a month on average from consumers, but a lack of publicity for the site would reduce that dramatically.
"I just hope that the everybody in the industry has a good think about it. We are fighting to get mushrooms in the shopping basket; once that effort is allowed to slip it would be very difficult to pick it all up again."
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John Smith, managing director of Yorkshire-based mushroom supplier Greyfriars, is the deputy chairman of the Mushroom Bureau and responsible for its financial structure.
“This industry has been imploding for the last five years,” he says. “Particularly in the last 18 months, some of the larger players have not been in a position to provide funds to the Bureau. The three biggest players in the industry aren’t able to put money in - and that leaves the rest of us to see what we can do to fund it.
“It would be a tremendous tragedy were we to lose the Mushroom Bureau and a sad indictment on a £350 million industry that we cannot find around £100,000 a year to keep it in business. But at the moment, I’d have to say it is looking extremely doubtful that it will be here next year. If the financial pledges do not reach a minimum level - which we haven’t decided upon yet - then the tough decision will have to be taken.”
Smith says that when put against the value of the work the Bureau does for the industry, the budget is very low anyway.
“It is a valuable source of information for the entire supply chain, for the media, government and the end consumer and it has a vital role to play as a sensible and pragmatic firewall to the newspapers and journalists that delight in creating mayhem.
“To her great credit, Victoria has created vast amounts of publicity and interest in the humble mushroom and its derivatives. She is also the ultimate insurance policy against the type of crisis that devastated the egg industry in the 1980s. The disappearance of the Bureau would be an extremely sad story.”
SLIDING AWAY
There is no doubt that the UK mushroom industry is facing problems. Farms have continued to close this year, and production has continued to fall far below the heady days when the nation and its growers were proud to be virtually self sufficient with around 100,000 tonnes of product a year.
Much has changed. Competitive imports from the Netherlands and the Irish Republic in the 1980s and 90s have increased and on the horizon looms what many growers see as the next big threat - cheap, good quality product from recently ensconced EU members, in particular Poland.
Imports now account for well over 50 per cent of UK consumption annually and trade estimates vary - but generally reckon that domestic production is hovering around the 50,000t mark. Few believe UK production has reached its nadir.
Meanwhile the multiple retailers have flexed their muscles and are exercising a considerable influence on the shape of an industry that is not able to use the shrinking wholesale markets as a viable volume alternative.
Until this time, the mushroom industry's strength was its combination of large producer groups - themselves subject to regular merger and acquisition activity in recent years - supported by a healthy catchment of smaller farms that at one stage collectively represented some 20 per cent of sales.
Against this background, it is not surprising that a report on the problems facing the industry - which hopefully will offer some solutions being offered by Warwick University in one of its first projects since it took on HRI - is already eagerly awaited. It is expected in October.
The report is bound to reveal that many organisations have disappeared probably as a result of the need to supply larger programmes needing greater investment. Statistically, while scales vary enormously previous reports have estimated that at one stage there were more than 250 farms in the UK. This figure has now plummeted past the 100 mark, and today may be as low as 60.
If increases in production were achieved by individual farms, this has often been at prices which according to trade sources either rose only slightly or remained static. Viewed in real terms, values are less now than five years ago, the report will find.
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