It is fair to say that New Spitalfields Market has got a lot going for it. The 31-acre purpose-built site has retained much of the hustle and bustle of a traditional wholesale market, and a multi-cultural group of tenants and an equally diverse East London community have seen it thrive, despite the changes the wholesale industry has faced since this market’s relocation to Leyton.
The wholesale market moved to the Sherrin Road site in 1991 to benefit from ideal road access to the A12, the M25, the North Circular Road and the M11, as well as, of course, the centre of London. And no one could have predicted the opportunities that lay ahead in the shape of the 2012 Olympic Games.
Most of the wholesale companies that reside in New Spitalfields have been part of the market since before its relocation, but many have joined over the years, and the market is working at full capacity. In fact, many tenants have built mezzanine floors to provide them with extra storage and office space, so the market is happily full to the brim. Over the last five years there has been an influx of Turkish wholesalers taking stands and catering suppliers have taken to the sides of the main wholesale building, adding to the many different nationalities and business types on the site.
This is something that the traders at the market recognise and celebrate. Jon Thomerson opened JT Produce a year after New Spitalfields was relocated. He believes that the diversity found in the market today is key to its survival and revival. “At a time when a lot of traditional wholesalers were dropping out of the market, we got a welcome boost in the shape of the ethnic companies joining,” he explains. “This market has been very successful and that is in part due to the number of Turkish companies, two to three Chinese wholesalers and other minorities that trade here. Diversity has pushed this market forward at a time when traditional-style wholesalers were on the decline and brought welcome additional trade to the market.”
Jim Heppel, secretary of the Spitalfields Market Tenants’ Association, believes that the wholesale market’s optimistic atmosphere and indeed its success over the years is down to a number of factors.
“When we moved to this site more than 17 years ago, location was the prime thing and that in itself has proved its worth,” he reveals. “From the South East to the North, from the Channel Tunnel to Rotterdam, we are totally accessible and our produce can be fresh and fast.
“The other aspect is our multi-cultural customers and tenants. Turkish, Asian and Chinese occupants take up some 60 per cent of the market, serving a cosmopolitan London and trading as one with the traditional wholesale traders.
“Our community spirit is a big reason for our success. New Spitalfields sees 2,500 people coming to work every day and one thing connects them all; they all get out of bed to earn money and everyone helps everyone else.
“And finally, the marketplace is changing and we know we have to change with it to remain successful. We have been present at trade shows for some years and have even started to go to consumer cookery-type shows now.”
And moved with the times New Spitalfields has. Ken Alexander, superintendent at the site, took his position with the market’s landlord, the City of London, three years ago and has instigated a number of changes since then.
A facilitator more than an administrator, Alexander came into New Spitalfields and quickly identified that an operation of this size needed a recycling system, both for environmental and financial reasons, as well as improvements in safety on the site.
“From the landlord’s point of view, we have made considerable inroads into safety management on site, with road traffic management and improvements to the running of the site,” maintains Alexander. “Back in 2006, we suffered from power shortages in the early stages of the Olympic Park construction and failure of National Grid back-up equipment.
“We experienced a couple of nights with no power, which is obviously catastrophic for a wholesale market. There is only so long that tenants can stock pile product.
“Now we have three generators that are sufficient to serve the whole site and we are hopefully set up for anything the Olympic Games’ construction might throw at us.
“Another big change has been the saving we have made through recycling on site,” he continues. “We had the situation where we were putting a huge amount of waste in a dump. At the beginning of 2006, we were recycling about 10 per cent of our waste. Now it is up to 70 per cent. We now have green credentials and recycling has dramatically reduced the money we were spending on landfill charges.”
Close to home
Although diversity is the lifeline of New Spitalfields Market, a steady influence towards sourcing more locally produced fruit and vegetables in the form of a London Development Agency (LDA)-funded business development manager, Tim Williams, has been introduced for both the good of the environment and the British economy.
Paul’s Fruit & Veg’s manager Naomi Niyangonda has worked on the market since 1994 when her family took over the business, which has divisions throughout London and farms exotic produce in the Dominican Republic. She has seen local produce take a backseat in the wholesale market, but sources from the UK when product and seasons allow.
“In the last 15 years, a lot of local produce has disappeared and English companies have made way for mainly Turkish traders, which means that customers have a wider selection on the market to source from, but buying imports has brought inevitable problems with exchange rates in this current climate,” says Niyangonda. “In the past, local produce was on the way out, not because of demand, but because imports were much cheaper.
“We source local where we can and, in my opinion, I think that farmers should grow more in this country. We source potatoes, onions and root vegetables from the UK pretty much throughout the year, as well as herbs, especially methi and coriander when in season. We buy directly from farmers in Kent.”
This is the kind of attitude Williams is building on at New Spitalfields. He is now putting traders in touch with growers in the counties surrounding London for items such as chillies and coriander, as well as traditionally English fare that may have been ousted for imports.
“The weakness of sterling compared to the euro makes British fruit and vegetables inexpensive in comparison to imports,” he says. “And it is going to be fresher whatever it costs. It is down to educating traders as to what is available on their doorsteps and what long-term benefits sourcing closer to home will bring to both businesses and the economy.”
As part of a new project, the LDA has put business development managers in place throughout fruit and vegetable wholesale markets in London with the aims of bringing more sustainable food into the capital, educating tenants and nearby growers of the benefits of working together and aiding the procurement process.
Williams has been busy reconnecting wholesalers to nearby growers since he took on the new role in December and has already had some success. He believes that face-to-face interaction with traders and growers, and getting growers to look around the market, is going to make a difference to New Spitalfields’ future sustainability.
“A Tastes of Anglia meet the farmer day introduced me to a lot of possibilities, as I then brought three of those growers to the market and they are now trading with wholesalers within New Spitalfields,” says Williams.
Having analysed the fresh produce coming into the market, Williams believes that only 30 per cent of the fruit and vegetables are British, with 12 per cent of that figure coming from London’s surrounding counties. “We are trying to be pragmatic; we are starting small and building it up,” he adds. “We have put on a full-day seminar on procurement for tenants and have lots more in store.”
And it looks like this new approach is already making an impact on the wholesale market’s tenants.
Specialist in salads and exotic product Gilgrove Exotics Ltd has seen some benefit from Williams’ work and salesman James Leonard thinks that getting local produce, and as a result more growers, into New Spitalfields is a good thing for the whole market.
“There is not enough local produce in this market,” says Leonard. “We work with Remfresh, which is based in Colchester, Essex, that supplies us with mixed lettuce when in season.
“Customers would love to buy more, but the trouble is there are not enough growers who either know where we are or have the ability to package the produce to the standards we require. At the moment, we are sourcing fresh horseradish from Chester from a guy who just grows a couple of acres for the Jewish Passover period. He is only one of three horseradish growers we have been able to find in the country.”
Leonard believes that British growers need to group together to serve wholesale markets in the form of a packing hub, and that Williams is directing the wholesalers in the right way. “He has brought a fair few growers to see us so far,” Leonard explains. “We have had some chillies from a local grower and the black garlic has been popular. I believe he is already working with a lot of growers, and he is already pretty active around the market site itself. It is a great idea; a lot of growers need help.”
Traders are very positive about the steps that are being taken to actively get more produce into New Spitalfields and want to see the programme continue.
“I believe I have made some sort of impact since December, but it is difficult to quantify at the moment,” says Williams. “It is a very rewarding job and it will make a difference. We have funding until December this year and there is talk of the project continuing until 2012.
“It takes time and is much like cultivation; you prepare the land, sow the seeds and then hopefully reap the benefits.”
Suffering the recession
The wholesale market is one place where the phrase credit crunch is particularly pertinent and giving customers credit - once a normal part of everyday life for the traders - has become a minefield.
“Price is always important but customers are more price-conscious than ever and credit is a big issue,” explains Leonard. “You hate to give credit, but restaurant paying times are getting longer and longer. Cash flow is the biggest problem with the wholesale industry at the moment. The financial situation has not helped; there is no cash on the market.”
Leonard believes that the recession and credit situation puts a stop to young blood opening up shop in the East London wholesale market. He continues: “It is getting to the stage where if I wanted to start up on my own it would be extremely difficult. To a bank the prospect on paper looks ridiculous. We make a great living in this game, but 10 weeks of credit to two of your biggest customers doesn’t bode well.”
Thomerson agrees. “We find that most customers are giving restaurants or caterers far too generous terms,” he says. “Typically, restaurants are taking six to ten weeks to pay. In the wholesale industry we all pay most suppliers in four weeks; so you can see how this does not match.
“Years ago, it wasn’t a problem, because catering only made up a small amount of our trade, with most of the rest being cash customers, but now this is not the case.
“The problem is that a lot of good customers cannot get the payment to you any quicker - so you are left with the dilemma of holding on for the money or losing a good customer.
“My trading figures held up well to this so-called recession, but the looming problem of potential bad debts is very worrying.”
Knights of London’s John Edwards is already worried and says that catering supply businesses and secondary wholesalers are going out of business. Edwards is another Spitalfields veteran who started working in the wholesale market five years before it relocated. “Catering supply businesses are going out of the game very fast; it is frightening,” he tells FPJ. “Pubs are closing and the catering sector seems to be on the decline. There have been three to four big catering businesses that have gone bust since Christmas, which was a hard time for them. You have to pray that the companies you are serving are not going to disappear without paying you, as everything is on credit.
“But you cannot take away the market atmosphere in this place,” Edwards continues. “It is still a profitable game, but you have to cut corners when necessary. It used to be a very good business, but now it is just average, because of the recession.”
Arthur Hutchinson Ltd has found it hard to sell produce that can be classed as luxury items and salesman Eddie Wedderburn, who has worked for the company for five years, says that there has definitely been a decline in customers since the recession took hold. “Five years ago, the focus was on quality and now it is firmly on price,” he says. “The recession has brought a lot of issues for our customers, but street market traders are particularly under pressure. They have been cut out of the city centre markets by the congestion charge and limited parking.”
Revival on the cards
JT Produce has gone from strength to strength on the New Spitalfields site. In 2006, it opened sister business JT Fruit Company on a stand opposite, which complements the existing business by offering a full range of fruit, with a particular focus on bananas.
“We have diversified over the years and through demand from our changing base of customers we have taken on more and more goods,” explains Thomerson, who has been in the wholesale game since leaving school. “The new business has gone really well and we are offering the complete range to the customer now. Traders feed off each other here and new companies from different backgrounds have brought new customers to the market.
“We would not have invested in new premises if we didn’t think wholesale trading was continuing to be viable. We are in it for the long haul.”
Like most wholesalers at New Spitalfields, JT Produce has seen a shift in the amount of retailers to catering suppliers and caterers it serves. “17 years ago, independent retailers or greengrocers accounted for about 75 per cent of business and catering the remainder,” says Thomerson. “Now, it is completely the reverse. Catering supply companies can be more demanding than retail and look for specific products rather than just stock to fill a shop. I think that is why we do not really have seasons anymore, because the chef demands that we source worldwide when the produce is out of season in the UK.”
Thomerson does not think that New Spitalfields has been affected by the recession as much as it could be and thinks that the wholesale industry is coming into its own. “The area we haven’t seen the financial crisis affect at all is exotics,” he continues. “It is specialised and chefs have it regardless of cost. It is unfair to say they are happy with any price, but they will pay for quality.
“We have seen a slight decrease in trade from restaurants during the week; people have curtailed their eating out during the week, but they are still having business lunches and eating out at the weekend. It is not a major decline by any means.”
But Edwards believes that a clear pattern towards a wholesale revival has been stopped in its tracks by the recession. “I do not think we have caught the worst of it yet,” he tells FPJ. “Food-wise, we have just got to the tip of it and there will be further suffering this summer because catering will take a hit. We are too focused on Class I product and that is the supermarkets’ legacy. It is all about appearance, regardless of the taste.
“But wholesale will turn around eventually and in 20 years’ time it will all be different again and people will want tasty ingredients from their local retailer. In the future, there will be more greengrocers - we just need to get through this lull the recession has brought.”
Value coming up
In the meantime, the market is finding other ways to get around the crisis by adding value to its offer and taking advantages of certain street market trends, such as the £1 a fruit bowl measure.
The face of wholesale is also changing within New Spitalfields Wholesale Market, with forward-thinking companies taking the lead and proving that wholesalers can offer both fantastic customer service and produce. At Paul’s Fruit & Veg, Niyangonda prides the company on the service it provides its customers and has put the training she received at London’s Harrods, while completing her degree, to good use.
“Before bringing in any produce, we advise the farmer on packaging and the correct cool chain regulations, and generally take the time to make sure the produce is top quality,” she says. “I give aftercare instructions to customers and relay feedback to growers from our customers. That is how you keep your customers; you work hand in hand. You cannot sell and walk away.”
Niyangonda has recently helped a customer looking for very hot chillies to use in a chutney mix. She organised for several samples to be sent to the customer, who then found the right product. Independent retailers took up the chutney, and Niyangonda now sources in excess of 300 boxes of chillies at any given time for this customer. “No one else wanted to know because she was talking about such small quantities,” Niyangonda explains. “Traders have got to have customer care and I think we need to look after our small businesses.
“There is a tough time ahead of us in this financial climate, but people still have to eat and we will continue to be important to the community.”
Peter Durber of Tropifresh believes that exotics bring in good business and his company thrives on Caribbean retailers in the area. “This is a challenging and difficult market, but if you identify those challenges and plan ahead, you shouldn’t have a problem,” he says. “Trade is very good and has been for a long time. We have a strong ethos in how we trade with suppliers and customers. We believe in trading fairly. If you treat people fairly and give a fair price for a premium and consider these times of hardship you will be repaid. We always go that extra mile and pay the premium and we have built the business on the fact that the customer will appreciate that.”
Olympic proportions
There has been talk of creating a wholesale hub or composite market in London for a long time and, since Stratford won the Olympic bid, New Spitalfields has been seen as an ideal location, with surrounding land coming up for grabs through the Olympic Legacy scheme after the athletics event.
The widely discussed idea is to relocate fish market Billingsgate and meat emporium Smithfields from their central London locations to New Spitalfields to create a one-stop shop for caterers and retailers to get their goods.
Montgomery Wholesale Fruit & Vegetables Limited is eager to make the most of the Olympic Games. However, co-owner Jonathan Labrum is not feeling optimistic. “People have got to eat at the Olympics and they should eat lots of healthy fruit and vegetables,” he reasons. “Three years on from the announcement that Stratford would be getting the Games, we would like to think we would get a chance to be involved, but it looks like we may have missed the boat. I don’t know. It is more likely that it will cause more disadvantages with congestion and the like, rather than advantages.”
Ali Matur, owner of Special Fruit -New Spitalfields’ largest Turkish wholesaler - does not think the Olympic Games will have much of an impact on the market. “There has been talk of using Olympic land to extend the market, which would be good. I would like to see meat come to the market, as that would please a lot of my customers,” he says. “The actual Olympics only lasts for two to three months, so I really don’t think it will make a difference to trade.”
But management has different ideas and is putting plans in place to make sure New Spitalfields does not miss out on this golden opportunity.
“We need to push Spitalfields further,” says Williams. “This is supposed to be the ‘green’ Olympics and you cannot get any greener than sourcing the fruit and vegetables for the event from here. We can even send the produce by canal boats to the Olympic caterers. The hardest part is tracking down the right people to talk to, but we will get there.”
Keep on moving
“I think eventually, we will have to be one market,” says Leonard. “The only way towards sustainability is to create one site for meat, fish, dairy and fruit and vegetables - something like Rungis in Paris.
“We are 30 years behind Rungis. With the City of London in charge of Billingsgate, Smithfields and here, at some stage they will sell the other sites and cash in, and that would be best for everyone.”
Thomerson feels like the City of London missed out on an opportunity when New Spitalfields first relocated to the East London site. “We used to have a lot of facilities close to the market at the old location, like a bank, shops and restaurants,” he says. “With more than 2,000 people working on this site, I think they could have created something like Rungis.
“It would attract young people to the market, who at the moment do not want to start work in the middle of the night, but it may make a difference if they had a nice bar or restaurant to go to after they finished work.”
Presently, any new developments at New Spitalfields will very much rely on the Olympic Games and its legacy scheme. Heppel sees the possibilities as endless and looks forward to the wholesale market having continued sustainable success, whatever its guise or future direction.
Alexander is certain that there will be a place for New Spitalfields in its legacy scheme, which would enable the wholesale market’s plan to bring a composite fish, meat and fresh produce market to its site.
Labrum also believes in the market’s future. “This market runs really well and I would not change anything about it,” he says. “It is one of the largest horticultural wholesale markets in Europe and we still see some 2,000 motors through the gates every day.
“In saying that, ours and the market’s secret is that we are not afraid to try a new thing; whether it be a system or a new product. I have no doubt that this is going to continue to be a smoothly run market throughout the Olympics and beyond.”
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