Retailers have been engaging with the concept of local sourcing for years, but Tesco has upped the ante with last week’s announcement that it was restructuring its buying function to work more closely with regional suppliers. Is it as good as it sounds? Bernice Hurst investigates.
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Encouraging supermarkets to stock locally sourced food has distinct advantages both for consumers, who have been requesting it, and for producers, who can reach a wider audience than those with enough free time to visit farmers’ markets or farm shops. Making good quality food more readily accessible is undeniably a good thing. It also reduces food miles and helps to save the planet.
This is true as long as the good intentions underlying such a sea change to the supply chain don’t get diluted in the process. It may surprise some to learn that there is a potential downside to supermarket plans for increasing the amount of regional produce on their shelves. In fact, there are several possible hazards for which producers must watch out.
Those of a sceptical, cynical or suspicious nature who have been around the food industry for more than a decade may view such recent announcements with a slightly raised eyebrow. Some may recall the days when small producers thought they would make their fortunes and become household names by getting an order from a supermarket. Sadly, many then proceeded to put all their eggs into a single basket only to find that they couldn’t maintain their livelihoods on what those supermarkets wanted to pay them and either lost or came close to losing their business when orders later dried up.
For some producers the consequences were tragic. “Farmers, their spouses and farm workers have been documented as having high suicide rates” according to the 2005 report ‘Farmers, farm workers and work-related stress’ prepared by the Policy Studies Institute for the Health and Safety Executive. While this can’t be attributed directly to cancelled contracts, they may be an influential factor.
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By GlobalDataMore than twenty years ago one of the first and best-known cheese shops in the UK, Patrick Rance’s Wells Stores in Streatley, Berkshire, found that some of its most popular products were no longer available. Supermarket buyers had descended on the shop, tasted everything and then scooted off to the producer farms and bought up their entire stock.
Tesco, which announced last week that it will be opening regional offices and hiring local experts to help their buying teams identify the best local produce, have already hit two stumbling blocks. The Advertising Standards Authority upheld a complaint from Welsh residents that many “local” products were no such thing. Just because they came from Wales didn’t actually make them local. Meanwhile Will Chase of Tyrrell’s Crisps has refused to sell to Tesco, insisting that it would impact unfavourably on sales to independent retailers.
Although the National Farmers’ Union (NFU) endorses Tesco’s intentions, particularly citing the opportunity for producers too large to sell through farmers’ markets, there is a danger that success might be too much for small producers to bear. Having to increase small production runs has, in the past, diluted product quality. Not increasing small production runs has, in the past, resulted in cancelled contracts. Although Tesco told just-food that it does not intend to demand exclusivity, producers will have to think carefully about whether they can supply both old and new customers.
The timing of discussions between supermarkets and small producers also raises questions. While an investigation into their relationships is ongoing, there is certainly the possibility that it has provoked a genuine move towards improving the situation and ensuring that everyone along the supply chain comes out a winner. But it must be handled with care. Finding knowledgeable and passionate local experts, as Tesco intends, is just the first step. Marriages may be made in heaven but they only survive and thrive with long-term hard work.
