IMPROVING SUPPLY CHAINS THROUGH COLLABORATION
The Cultivating Collaboration (C2) project was developed by the Scottish Agricultural Organisation Society (SAOS) and formally launched in May 2009. Alan Stevenson, SAOS supply chain director, who leads the project, outlines the key purpose of the three-year initiative in boosting collaboration across the Scottish food and drink supply chain and explains the wider aims of SAOS.
The three-year C2 project receives grant support from the Scottish Government’s Food Processing, Marketing and Co-operation Grant Scheme and is a strategic activity of Scotland Food & Drink. It is supported by, and delivered in partnership with, all the leading land-based food and drink organisationsthat are members of Scotland Food& Drink. Its purpose is to stimulate, encourage and support greater collaboration in Scottish food and drink supply chains to improve profitability, market responsiveness, efficiency and sustainability.
The team can help you find out more about your supply chain - how it works, how you can improve it, and how to find the right partner/s for collaboration to help you into a new market or develop a new product.
The C2 team can help anyone in the land-based Scottish food and drink sector, including farmers, growers, co-operatives, processors, distributors, wholesalers, foodservice operators, retailers and public procurement organisations. So far, we have worked with 126 companies, 47 organisations, councils and academic institutes, and 172 people who have taken part in events.
C2 was instrumental in facilitating a joint venture agreement between Mackie’s and Taypack to manufacture premium-quality crisps under the Mackie’s brand and is working with two separate groups of specialist suppliers in the north-eastern area of Scotland and in Lothian and Borders, both of which are individually exploring the feasibility of working together to market and distribute their products more effectively.
C2 has launched its Supply Chain Innovation Programme to help Scottish food and drink companies develop new customers and markets through rapid product innovation. Those taking part will create a real, new product, service or market opportunity which is aimed at identified market needs. This will help them to tap into creativity in their own business and in their supply chain.
The first annual C2 event, Profiting Through Partnership, will focus on how partnership working can really build profitable businesses in the food and drink sector. Taking place on 23 March at Norton House Hotel, Edinburgh, the event will offer businesses the chance to meet some of the pioneers of partnership working in Scotland, among them Waitrose, Forteith Foodservice and David Sands. This is the first event of its kind in Scotland dealing entirely with the positive benefits of collaboration.
The cabinet secretary for rural affairs and the environment, Richard Lochhead MSP, will speak at the event and there will be formal presentations and a question-and-answer session with the contributors during the morning.
SAOS specialises in the development of co-operation and joint ventures among farmers and growers and within food and drink supply chains. The body’s purpose is to strengthen the profitability, competitiveness and sustainability of Scotland’s farming, food and drink industries through the development of co-operation and collaboration.
We are committed to promoting, developing and enabling co-operative and collaborative business solutions and our values are underpinned by co-operative principles.
SAOS was established in 1905 and is currently owned and governed by around 75 member co-operatives, the 10 largest of which had a combined turnover of £1.6 billion in 2008. Our member co-ops deal with nearly every kind of livestock, dairy, vegetable, potato, fruit and cereal products, as well as aquaculture and timber. Several of our members are involved in producing and marketing potatoes, vegetables and fruit for major UK processors and retailers, and in some cases for export.
We provide information, advice and specialist hands-on consultancy services to the farming industry and food companies, drawing on our deep experience of improving business effectiveness across links in the supply chain.
Our success in developing collaborative projects and partnerships lies at the very core of SAOS, and we work with a wide range of partners on a variety of projects, including the Scottish Government, Scotland Food & Drink, the Scottish Enterprise Network, Quality Meat Scotland, HGCA, NFU Scotland, SAC, the Scottish Association of Farmers’ Markets, Co-operative Development Scotland and Co-operatives UK. We attach immense value to the wide range of excellent working relationships we enjoy across the public and private sectors, nationally and internationally.
There are many drivers of change in the agri-food industry and the resultant pressures on farmers seem unlikely to reduce in the foreseeable future. The increased volatility and risk in markets, the global and local effects of climate change, greater priority of food and drink in Scottish Government policy, and efforts to improve diet, health and lifestyle, all represent a tough set of factors, in addition to the commercial pressures in the supply chain, to which our farmers and food companies must respond.
An emerging area of focus for us is the concept of ‘strong’ sustainability. Farmers and food producers are well aware of the need for action to reduce their impact on the planet, and sustainability is enshrined in industry and government policies. ‘Strong’ sustainability requires considered balancing of economic, social and environmental objectives which, for many, remains tough to envisage, and therefore a real challenge to plan and act upon. We are assisting our members to research and implement a range of strategies that contribute to sustainability, while at the same time improving business efficiency.
Another key area of involvement for SAOS is local food. In line with the rest of the UK, the market for local food and attendance at farmers’ markets in Scotland is strong and growing, and potentially can deliver a range of social, economic, cultural, health and environmental gains. Growth would be impossible without co-operation and collaboration among producers and in supply chains, whether organising a farmers’ market or creating a distribution hub. There are multiple strands to the local food market in Scotland, and several of these have enormous potential for further development and expansion. We employ Scotland’s National Farmers’ Market Development Officer, a role that we deliver in partnership with several other organisations and Scottish Government.
Our project management team is at the forefront of interpreting business pressures and change drivers, and in advising and assisting businesses in their planning. Demand continues to increase for our specialist services and, in particular, our skills to manage change processes and work streams among collaborating businesses to deliver a commercial result.
SCOTLAND FOOD & DRINK TO BOOST NATION’S REPUTATION
Scotland Food & Drink is an industry-led membership organisation, established in 2007, which aims to grow the value of Scotland’s food and drink sector, make it more profitable and deliver greater global success in a fiercely competitive market.
“Our mission is to grow the industry from £10 billion to £12.5bn by 2017 and our vision is to build Scotland’s international reputation as ’A Land of Food and Drink’,” says Anna Davies, Scotland Food & Drink communications and marketing manager. “A key part of the organisation’s work is to facilitate and develop the Industry Strategy and determine the future path that the Scottish food and drink industry must take in order to develop.”
Scotland Food & Drink exists not for its own sake but for the growth of the industry, stresses Davies. “Innovation in product, process and route to market is essential if Scotland wants to achieve and maintain a leadership position internationally,” she says. “Scotland Food & Drink plays a central role in defining and delivering the information and support needed by Scottish companies to identify and exploit new business opportunities.
“Led by the industry, Scotland Food & Drink has been unique in bringing every sector together for the first time, working to a common commercial goal. Scotland Food & Drink’s role is to provide leadership, strategic thinking and analysis of market issues and trends.”
Scotland Food & Drink has more than 160 members, ranging from the smallest farmhouse producers up to some of the largest retailers and food and drink companies in the UK. Among its members are key fresh produce companies such as Angus Soft Fruits and Albert Bartlett.
Specific member benefits also include member-only events and discounts on a number of services such as website audits, IGD access, legal advice and PR support, to name just a few.
“Scotland’s reputation as ‘A Land of Food and Drink’ is growing and sales of Scottish produce are increasing,” says Davies. “But we don’t rest on our laurels - much needs to be done to enhance this reputation and place Scotland among the top-three producers of premium food and drink in the world.”
When it comes to health, the Scottish food and drink industry is becoming more and more engaged, according to Davies. “A recent refresh of the Industry Strategy highlighted health as one of the three main priorities (alongside premium and provenance) for the industry going forward and so our work in 2010 and beyond will concentrate on ensuring that healthy and hewalth-enhancing food is adequately developed.”
GLASGOW WHOLESALERS TO BUILD ON ONE-STOP SHOP CONCEPT
Work has begun in earnest on the £6.5 million revamp of Glasgow’s wholesale market, which aims to consolidate the site’s role as the main hub for fresh produce distribution in Scotland.
The contractors arrived in mid-January and all of the main electricity distribution boards servicing the market have been replaced, while work has begun on the electrical systems and lighting replacement.
The redevelopment is expected to take between one year and 18 months, and plans are well in hand to work around the tenants as the refurbishment progresses. The eventual aim is for the market to attract more potential new tenants and customers, while building on Glasgow market’s role as Scotland’s one-stop shop for fresh food, according to Graham Wallace, managing director of City Markets (Glasgow) LLP.
He says: “It is intended to further develop the market in Glasgow along the one-stop shop lines, ensuring that it becomes an essential point of supply for not just fresh produce - and it already has traders supplying fruit, vegetables, flowers, fish and seafood and also cheeses, meat, poultry, eggs, speciality foods from France, etc - but a much wider food and specialist food offer, together with associated services and supplies, including processing and small-scale manufacturing.
“Along with the modernisation of the market currently being carried out, a series of operational improvements will be introduced in conjunction with the tenants of the market to improve its attractiveness to new complementary businesses, some of which will focus around waste management, traffic management, control of access to the market, security, a range of health and safety initiatives, etc.”
Scotland is very fortunate in that, in terms of food and drink, the word ‘Scotland’ is an internationally recognised brand name that equates to quality, freshness and taste, according to Wallace. “To some extent, up until recently, this has possibly been ignored or at best taken for granted by people in Scotland and as a result, in terms of general eating habits, our home-grown products have not been subject to the greater level of local demand that you would expect,’’ he says. ‘‘This can sometimes be explained perhaps by pricing and/or marketing and promotional activities, which have not focused enough on the Scottish product for the home market.”
However, change is afoot, believes Wallace, with farmers’ markets continuing to enjoy growth and the Scottish government also getting on board. “The Scottish government is putting much greater emphasis on local food and farming and the socio-economic benefits that go with it through policy output, which gives much greater weight to addressing the challenges and opportunities for the Scottish farming and fisheries sectors,” he says.
In terms of Scotland’s wholesale sector, Wallace advocates perhaps taking a leaf out of the books of Spanish, French and German colleagues who, by working directly in partnership with producers, wholesalers, retailers and retail markets, have had major success through marketing and promotional activities.
“This has achieved not just a rise in healthy eating practices in general but also an increased awareness of the benefits of sourcing local, fresh produce when available,” he says.
Scotland, like the rest of the UK, has over the years come to forget or ignore the importance of food, and especially better-quality food and fresh produce, continues Wallace. “Although there is a gradually increasing awareness in response to the massive amounts of mainstream media coverage of the cost of obesity, the most successful change is likely to come when people genuinely want to eat fresh produce and actively seek it out in their diets, rather than being lectured or told that that they must eat it and - especially in the case of children - this can only happen on the basis of freshness, quality and taste. Putting the focus on appearance, size, shape, etc, will ultimately not achieve results in increasing consumption levels, as we have seen to date.”
There is no doubt that the food and drink agenda is gaining in importance within the Scottish economy, according to Wallace, and the government has recognised this by increasing its emphasis on the whole sector. “Naturally, a lot of focus has tended to be on the generation of big business within the sector and on assisting producers and producer organisations to gain access to major contracts with multiples,” he says. “However, there are also many producers not in a position to enter into these contracts or to continue servicing them, and equally there is a great number of small- to medium-sized businesses within the fresh produce sector that depend on a local wholesale network being available.
“The geography, road networks and spread of population in Scotland are more challenging for the major food distributors than in most parts of England and this also helps the smaller and more specialised businesses to succeed in Scotland.”
SCRI TEAMS UP WITH NORTHERN EUROPE IN BERRY BOOST
Scottish scientists have joined a consortium that includes Denmark, Sweden, Norway and Germany, with the goal of securing the long-term future of the soft-fruit industry.
The project, called ClimaFruit, has a budget of €6 million (£5.2m). The funding is a 50:50 split between the partner nations and the European Regional Development Fund.
The Scottish Crop Research Institute (SCRI) in Invergowrie, Scotland’s leading centre for crop research, is taking the lead role for the UK. SCRI and its commercial subsidiary, Mylnefield Research Services Ltd, have a proven track record in soft-fruit research and breeding. The Glen Ample raspberry bred at SCRI is the most popular in the UK and 50 per cent of the world’s blackcurrant varieties were also bred in Invergowrie.
The partners will focus their research on blackcurrants, raspberries and blackberries.
The project, which runs for four years, has several key targets: to find ways of reducing chemical use and the carbon footprint of horticultural production systems; to provide long-term economical and ecological solutions for the best use of water, nutrients and chemicals; and to secure the production of locally grown fruit, providing fresh, healthy food products and natural ingredients for foods with reduced chemical residues.
There are other hoped-for benefits, which include the creation of new businesses that contribute to local economies and to step up production of both fresh and processed berry products.
The ambition is to create a world-leading berry fruit team focused on delivering sustainable and healthy solutions.
The Scottish Government’s cabinet secretary for rural affairs and the environment, Richard Lochhead, said: “The Scottish Government supports SCRI in its ambitions to secure the long-term future of the soft-fruit industry, reduce its environmental impact and encourage greater production of locally grown, natural, healthy fruits.
“Scottish science is already renowned worldwide and by SCRI joining this international consortium, it will further enhance its reputation for excellence. It will also provide a valuable boost to Scottish soft-fruit production, which is a major contributor to the agricultural sector.”
SCRI’s lead scientist, Dr Derek Stewart, runs the Plant Products and Food Quality programme at the Invergowrie research centre. He said: “This is recognition that SCRI is the lead organisation in the UK for soft-fruit research and breeding.
“A recent external review described the soft-fruit team here as ‘world leaders’. To be involved in this north European/North Sea consortium is a huge boost for us. It’s also evidence that Scotland’s vital berry industry has got first-rate research and development capability on its doorstep.”
The news follows last year’s announcement that SCRI and the Macaulay Land Use Research Institute have agreed in principle to unite, strengthening Scotland’s rural-environmental research capacity. Together, they will form a new powerhouse for research into food, land use and climate change.
It will be the first institute of its kind in Europe and the new organisation is expected to create an international office to reinforce its global presence. The new institute is expected to commence operations on 1 April, 2011.
ALBERT BARTLETT INNOVATING
In terms of fresh potatoes, Scottish produce is certainly well represented within the UK market, according to John Hicks, marketing manager of potato supplier Albert Bartlett.
“I think Scottish produce holds a strong position of quality in the consumer’s mind, with imagery of rollling green fields... and a clean, fresh environment,” he explains.
Albert Bartlett is launching new variety Purple Majesty later this year. “This is a variety we are very excited about and one that we can have a lot of fun with when introducing it to the consumer,” says Hicks.
And it is not just varieties where the company is making inroads. “We are innovating throughout our business, from agronomy standards to packing processes, to environmental best practice and new variety development,” says Hicks. “I would also say that our recent Marcia Cross campaign was extremely innovative in relation to the produce category, as we have communicated with consumers in a way which other produce has not done before.”
Indeed, the impact of Albert Bartlett’s Rooster potato advertising campaign, fronted by famous redhead Marcia Cross, star of Desperate Housewives, has “delighted” the company, says Hicks.
But there is still work to be done to push forward the health message of the potato. Hicks explains that the fresh potato industry, under the Fresh Potato Suppliers Association banner and with the support of the Potato Council, is mounting a campaign to have potatoes included in the 5 A DAY initiative.
Hicks adds: “Hopefully as an industry, we can become more consumer-focused. We have a fantastic product and if we can deliver that to the consumer in a consistent and modern way, we will get people excited about the potato fixture.”
SCIENCE AND INNOVATION CRUCIAL TO SCOTHERBS
Science and innovation are fundamental to herb grower and supplier Scotherbs, which operates 200 acres of production in the Perth area. Improving production and growing techniques are key drivers for the firm, with developments in crop covers, bio-control, varietal research and post-harvest processes all crucial to the future of the business.
Scotherbs managing director Fiona Lamotte, who has completed a Nuffield Scholarship into extending the seasonality of crops grown in the UK, is aiming to extend the shoulders of the Scottish herb season by four weeks either side in 2010-11, as the company looks to reduce its reliance on herbs imported from the Mediterranean. Its 365 Growing Project, encompassing renewable energy technologies, is crucial in achieving this goal.
Scotherbs’s production is based in a well-known fresh produce-growing area of Scotland that enjoys less rainfall and higher levels of sunshine than most other regions, along with good soil quality. The company has expanded its home-grown operations in the last 12 months and has invested heavily in its people, putting in place a senior management team, both at its packhouse and growing operations, to take the business forward.
Scotherbs is a member of the Fresh Herbs initiative, a category venture funded by six of the industry’s biggest players that aims to promote the health attributes and versatility of fresh herbs to consumers. Scotland is the second-largest consumer of fresh herbs in the UK, only surpassed by London, and Lamotte believes that part of the success of the category in Scotland must be down to the tireless efforts of Scotherbs since its establishment 25 years ago to push home the fresh herb message.
“Demand for fresh herbs is growing even in this economic climate, as people are eating in and cooking from scratch more,” she says. “The market is generally good.”
Products such as microherbs, fennel and garlic chives have helped boost the category in recent times, says Lamotte. “We have a new product development tunnel where we bring clients, especially chefs and foodservice firms who want new ideas,” she says.
Scotherbs also has ambitious plans for its primary schools project, which last year attracted 145 participating schools. Next year, Lamotte wants 750 establishments to sign up to the scheme, which sees schools provided with materials and seeds to plant a basic herb garden, and worksheets and activity suggestions to help them make the most of the project. “The children love it and they are the best audience we have,” adds Lamotte.
CO-OPERATIVE FARMS FOCUSES ON INVESTMENTS
Christine Tacon, managing director of The Co-operative Farms, tells FPJ how the business is expanding in Scotland following two major investments in the country in 2009.
In the last year, The Co-operative Farms has invested in two big projects in Scotland, with the refurbishment of a potato packing facility at Carnoustie and the opening of a state-of-the-art strawberry packing plant near Dundee. What were the aims behind these investments?
The Co-operative Farms already grows crops in Scotland, and we wanted to add value to them. We also wanted to ensure traceability and quality along the supply chain, and this is a way of ensuring we know exactly how the crops have been looked after, from production through to their arrival in store.
The investment at Carnoustie was an expansion to do on-site storage and grading, which means less movement of potatoes and greater efficiency. The strawberry facility, not far away at Longforgan, near Dundee, packs the strawberries we grow at Blairgowrie, and is also set up to pack broccoli.
Staff are shared between the two packhouses, as the strawberry season peaks at the opposite end of the year to the potato season, which is the end of December and into January.
What makes Scotland such an attractive region for agricultural investment?
The Co-operative has been farming in Scotland for about 100 years and has had shops there for even longer. We farm in Aberdeenshire, Perthshire and the Borders and also grow potatoes with local growers in Ayrshire.
Investing in the supply chain means we can take more of the available margin, and having a packhouse business as well as a farming business means that they can balance each other out. One can often have a bad year when the other has a good one, so we reduce our risk by being in both.
It also makes sense to grow and pack in Scotland for our Scottish food stores, although a fair proportion of the potatoes also go to Co-operative stores in England.
Scotland has different weather and a later season than the south of England. Farming in both England and Scotland means we cover a longer season and, again, have some balance - it is rare for both England and Scotland to have poor potato harvests. In 2009, for example, harvest conditions were excellent in the Scottish Borders but very difficult in Yorkshire and Cambridgeshire, where it was too dry and potatoes bruised easily.
Is there growing demand for locally produced food in Scottish Co-operative stores?
Yes, but food grown by The Co-operative Farms in Scotland also sells well in England.
Does The Co-operative Farms have any more plans to expand its Scottish investment in the next 12 months?
We are still expanding our soft-fruit operations in Blairgowrie and trying some new growing methods. We have only just invested in the packhouses and this year we are putting more volume through them, so our focus is on growing more.
Are there growing opportunities across the Scottish fresh fruit and vegetable supply chain for The Co-operative, and if so why?
Yes, there are growing oppertunities, because The Co-operative Group has acquired Somerfield and there are now many more stores to supply. Demand has increased enormously for our potato business.
WILLIAMSON FOODSERVICE STARTS EXPORTS TO FAROE ISLANDS
Highlands company Williamson Foodservice has recently branched out into fresh produce exports to the Faroe Islands.
What started out as a trial last summer developed into a full contract with a major retail client on the islands in November, and managing director Gary Williamson will be making his first visit to the island the week after next.
“The Faroe Islands is a fascinating market,” he tells FPJ. “The population is 50,000 and the supermarket we are supplying controls 25 per cent of the market. The demand has been for fairly cosmopolitan, contemporary products, which is not what you would expect from islanders.”
This is the first time that Williamson Foodservice has exported its produce, and Williamson believes that red tape has been the biggest hurdle to overcome so far. “However, there are two willing partners, us and our retail client, and we have overcome any early problems,” he says.
The company started life 50 years ago as a farm diversification scheme focusing on the retail sector. “My father worked at the company then but was not the owner,” says Williamson. “He then bought the business and now the second generation is in charge. We used to focus on independent retail but when that died off we went into foodservice. We have always tried to find the large contracts.”
Williamson believes that the firm’s main areas of expertise lies in its procurement strategy and knowledge of the area in which it distributes, which covers the Highlands - excluding the Southern Hebrides and the Northern Isles - and surrounding areas.
Williamson Foodservice supplies its wide range of goods - which comprises fruit and vegetables followed by dairy, dried goods and speciality products from the continent, among other lines - to public sector contracts such as schools, hospitals and prisons, along with large-scale hotel and restaurant chains.
“We started diversifying our range from just fruits and vegetables in 2000, although these still form the largest part of the business,” says Williamson.
He believes that people are still eating out in Scotland, but that there has been a distinct shift in spend. “People have downgraded to snacks and light meals,” he explains. “There has been a shift in spend, but there is still a good spend there. Some of our good customers have definitely been hit by the recession. There is no doubt that many of the top restaurants have downscaled to cheaper products to get the right value for their dishes.
“It is really a mixed bag and I expect more of the same in the next 12 months. People are still not sure we are out of recession and there is a lot of talk about a double dip. If we can keep a lid on where we are at Williamsons and retain our volumes and contracts, then we will be happy.”
HALDANES STORES BUILDING ON SCOTTISH ROOTS
Haldanes Stores Ltd, the new retail kid on the block that opened for business at the end of last year, has strong roots in Scotland, with 15 of its 26 stores based there, ranging from Wick in the North to Kelso in the South.
Some 70 per cent of the current management team come from Scotland and are based in the regional office in Broxburn, West Lothian, while the IT and finance departments are based in the retailer’s head office in Grantham, Lincolnshire.
The retailer’s store opening programme has been pretty fast-paced. Trading director Colin Farquhar tells FPJ: “We will be opening two per week on average over the next nine weeks and all Scottish stores will be open by 16 March.”
The main Scottish fresh produce supplier to Haldanes is Total Produce, based in Edinburgh; in England, its products are sourced through Nisa-Today’s, which supplies the majority of its ambient stock. “Total Produce was chosen due to its ability to deliver six days a week with Scottish-sourced produce,” says Farquhar. “It has a delivery network which allows all stores in Scotland to be delivered to directly. Nisa-Today’s in England fulfils a similar requirement.”
Local food plays a key role in Haldanes’s fresh food strategy, especially within the fruit and vegetable category, where the retailer has stated its eventual aim to stock 35 per cent locally sourced fresh produce in store. “We have started on a journey which we hope will allow local farmers to deliver straight into our local shops,” says Farquhar. “In this way, we will cut down on food miles, offer locally grown produce and support the local community. In time, we envisage that all products grown in the locale will be sold in our stores, from suppliers as small as individual farms.”
Scottish lines in Haldanes stores at the moment include leeks, swede, potatoes, cabbage, carrots, onions and broccoli. “Local food sold to local customers is a key plank of our company ethos, as we wish to maintain strong links with the people that shop with us,” explains Farquhar. “It’s what any responsible retailer wants to do. We feel that when we get to our stated aim of 35 per cent locally sourced fresh produce, we will show that we are different to the big four in that we deliver what we promise: a difference to the local community.
“We will be working hard with local suppliers and our teams to ensure that this aspiration becomes a reality fairly soon in our evolutionary journey,” he adds.
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