The Co-operative enjoyed a stellar year in 2008 and its achievements in the field of fresh produce were amply rewarded when it scooped the QV Fresh Approach Multiple Retailer of the Year gong at Re:fresh 2009. Further success came later on the same evening, when the group found itself in the enviable position of being the first retailer in the history of Re:fresh to earn the Fresh Direct Overall Produce Trader of the Year accolade.
The Co-operative is the UK’s largest community food retailer and its much-publicised £1.565 billion acquisition of Somerfield, officially completed in March 2009, took the number of stores in its UK network to around 2,800. The move saw the retailer stake its claim as the fifth-largest grocery chain in the UK - giving rise to the now familiar phrase “the big five”, in place of what was previously referred to as “the big four”. The group now commands an eight per cent share of the marketplace.
The Co-operative has invested heavily in securing its reputation as the country’s most ethical supermarket chain. The Manchester-based retailer is a well-known backer of the Fairtrade movement, while supporting British food and engaging in socially responsible and environment-friendly initiatives is also high on the agenda.
Emphasising fresh produce is a key component of the retailer’s strategy for the future, as it looks to build on its Good with Food tagline. Its fresh produce range has been tailored to offer consumers a range of solutions, from a Simply Value white potato to a Truly Irresistible Baby Beetroot with Sweet Chilli Marinade.
To celebrate doing the Re:fresh double, last summer The Co-operative introduced an eye-catching, in-store communications package. David Messom, director of food retail trading at The Co-operative, said: “We are delighted to have won these prestigious awards, which recognise that our fresh produce offering is second to none, thanks to the extraordinary efforts of all the teams involved. Fresh produce is important to our customers and a fundamental part of delivering The Co-operative Good with Food strategy.”
British produce plays a significant role on The Co-operative’s shelves. Indeed, The Co-operative Farms - which already supplies a good proportion of the British-grown products available in Co-operative Food stores - is the largest farmer in the UK, with production on some 60,000 acres spread across 15 different sites.
Mike Peters, category trading manager for produce, tells FPJ: “Success in produce retailingdepends on partnerships and collaboration between retailer, supplier and grower.The Co-operative has looked to develop business with suppliers who share our vision, ambition and passion and who are completely in tune with our ethical approach to business.Therefore, an obvious choice as a supplier toThe Co-operativeGroup isour own commercial farming business, The Co-operative Farms.The Co-operative Farms’ mission is to be a world-class farming business, supplying key fresh produce lines to The Co-operative, with a focus on British seasonal food.
“The Co-operative Farms is working towards supplying 25 per cent of all the British-grown fresh produce sold in Co-operative Food stores by 2011 and it is already closing in on this target. There is a focus onThe Co-operative Farms growing core product areas, for examplepotatoes,strawberries andapples, while growing other quintessentially British lines, such as onions and broccoli.”
The Co-operative Farms already grows 100 per cent ofthe retailer’sBritish beetroot andis looking to increase its share ofThe Co-operative’s British producein the retailer’s Grownby Us range.The range currently includes potatoes, carrots, broccoli, beetroot, peas, sweetcorn, onions, shallots, apples, cherriesand strawberries, all grown by The Co-operative Farms, as well as honey from its own hives,and other products made using ingredients grown by The Co-operative Farms.
Own-brand ranges such as Grown by Us and Truly Irresistible have had a big impact on the retailer’s fresh produce sales, thanks to their unique sourcing message and high-quality varieties, according to Peters. “One ofThe Co-operative’saims is to excel inproduce, ensuring thatour range and product quality demonstrates our passion for food, while creating leading-edge displays that inspire, excite and maximise sales,” he says. “The attitude throughout the whole business is both positive and progressive. All are committed to success in the produce category, to drive the overall development of fresh food sales.
“Our key strategy istounderstand, deliver and exceed our customer expectations by buying and sourcing consistently high-quality produce, at all times.Our aim within fresh produce is to develop an effective working partnership with suppliers and growers, delivering the right products, tapping into the latest consumer trends of health, local sourcing, value and premium, and communicating the improved offer in contemporary and innovative ways.”
The Co-operative’s category team works closely with technical colleagues to ensure the most appropriate supplier and grower base is selected, explains Peters. “Suppliers and growers are chosen to meet our standards and must follow protocols, not only set byThe Co-operative Group, but other agencies such as British Retail Consortium and Assured Produce.
“The category team has built and developed long-term partnerships withits supply base to ensure itdelivers best quality and best varieties throughout the seasons. When UK crops are in season, there is a real focus on ensuring that, where possible, the produce buying team aims to support not just UK growers, but local growers to specific regions.
“A key point of our approach is to ensure that sources of supply are changed as seasons progress, based on eating quality, product condition and availability rather than purely on price - although price has to be a factor. Also, by having strong partnerships, it enables us to work together to deliver new product development across the ranges,” says Peters.
With more than 200 Fairtrade lines available, The Co-operative is proportionally the biggest in-store supporter in the UK. “Within produce, as across all categories, we are proud to have continued to lead in Fairtrade,” says Peters. “We have the widest range of fruits available when in season and offer just about every type that is available under Fairtrade terms - usually being first to market with them. We continue to explore all opportunities... and are excited by the prospect of Fairtrade standards being developed for vegetables.”
Beyond the fresh produce aisles, The Co-operative has thrown its weight behind a plethora of wider social responsibility initiatives, with in-house projects such as Plan Bee, a significant investment by the retailer to research honeybee deaths. The chain signed up to an energy-saving project last April called Evolve Energy, while helping reduce food waste is also high on the agenda. In June last year, the retailer teamed up with the government-backed Love Food, Hate Waste initiative to include storage instructions for fruit and vegetables on its loose fresh produce bags. In a similar vein, The Co-operative’s membership teams ran a series of Watch your Waste events in September 2009.
So with an exciting and turbulent couple of years already under its belt, what does the future hold for the fifth-largest retailer in the UK? When the acquisition of Somerfield was completed, Peter Marks, group ceo at The Co-operative, said: “Our first priority now is to start integrating the two businesses... There is a strong strategic fit and we are looking forward to creating a single business combining the inherent strengths of both Somerfield and The Co-operative.”
The group has certainly made moves to build on that promise, with a multi-million-pound advertising campaign hitting the small screen at the start of this year to communicate to consumers the coming together of the two food businesses. The Co-operative has been phasing Co-operative-branded products into Somerfield stores and the harmonisation of the ranges should be complete by October. At the same time, the retailer is re-branding Somerfield stores to The Co-operative, with the Somerfield brand due to disappear by the end of 2011.
“The strategic plan to achieve our vision is embedded inThe Co-operative’s overall retail strategy ofthe four ‘betters’: better shops, better products, better service and better execution,” says Peters. “Inproduce, we intend to secure and grow market share through optimal store ranging and a clear focus on quality, availability, standards and competitive prices.”
While the big four still maintain a 75 per cent share of the UK grocery market, the emergence of The Co-operative as a retail force to be reckoned with is not to be underestimated, and suppliers must be keen to see how the chain will continue to consolidate its position and make its presence felt throughout 2010 and beyond.
No comments yet