It has often been said that markets in the physical sense have to be in the right place at the right time. The prime consideration is that they have to serve a need and it is the commercial trading considerations which really count.
This hypothesis could have been developed almost specifically for the network of horticultural sites which still exist to a lesser or greater degree in the UK, and which reflect the changing and still vibrant industry.
These developments have not come overnight, of course, but the changes which have impacted on the wholesale market are continuing to alter their role and effectiveness.
In one sense it is a tribute to the tenants themselves, which, while far fewer in total than 20 years ago - and many of the well known family names now nothing more than a memory - have continued to adapt.
Brian Daykin, chairman of the wholesale markets committee of the Fresh Produce Consortium, revealed that the majority, some 634, are in the association, many of whom are linked collectively through membership of the local market tenants association. And he estimates that this accounts for 80 percent of the sector.
“These in the main can be classified as primary wholesalers being often the direct link as importers or to UK growers,” he explained. “They operate in some 24 markets of varying sizes, mainly on the same sites which have not changed since the old congested premises were moved to greenfield sites as part of a government modernisation programme between the sixties and seventies.
“Where the changes have been seen are that there are far fewer large wholesale groups with branches spread across the country. Many of these recognised the value of becoming service providers to the multiples as their market shares grew and built their own premises on sites near motorways, offering not just distribution but prefacing and full traceability.
Today, Daykin continued, wholesale businesses have remained privately owned, but have become more localised, although many markets have attracted new tenants serving the specific needs of ethnic communities.
But there is also a second layer of traditional secondary traders buying several times a week in the markets and delivering to a far wider range of customers.
As with any business, amalgamations are still going on, but while the emphasis is on scale and increased profitability, there are other criteria at work.
It is often related not to the profile of the business once related to sales to traditional greengrocers, which like their other fresh food counterparts have continued to shrink in numbers, but rather to the food service industries in their many forms.
Traditionally, wholesalers have been the supply source for institutions which vary as widely as schools, hospitals, factories, and even prisons , and many of these still operate.
However, the move in industrial catering to greater levels of convenience has meant that again there has been change with these providers of prepared products becoming the customers.
Several wholesalers have adapted and taken on this role themselves, while others have capitalised on the boom experienced by hotels and restaurants, which vary in requirement from serving five star meals to simple dishes.
“In many senses wholesaling has become more complex,” says Daykin. “The markets were a law unto themselves and were built on volume selling. But this watershed has now been passed. “Today it’s about service and all that goes with it.”
Waste management, for example, has become a major issue, and there is the impact of pesticides and residues and all that entails on the whole fruit and vegetable industry, while in a wider scenario ensuring the legality of labour.
Here the FPC has carved itself a role looking after members’ interests and has a directly beneficial effect on recent legislation regarding gangmasters, as well as holding a watching brief in EU legislation to ensure that with other European organisations there is a practical approach to trade.
The result, says Daykin, is that sales in the fresh sector, outside the much publicised proportion handled by the multiples, is still valued at around £2 billion.
Any doubts about the future of fresh produce wholesaling are dispelled with a visit to Western International,on the edge of Heathrow Airport. For the first time for many years in the UK, a new market is being built on adjacent land as part of a land swap arrangement which still protects the local green belt .
This is in no small part a tribute to the fair and often very frank relationship which the tenants’ association has enjoyed with its landlords, the London Borough of Hounslow, and their own enthusiasm touring Europe to pick up the best ideas in design.
It has resulted in new purpose built council owned premises, which while reduced in total area from the current 32to 19 acres, still affords sufficient space to accommodate virtually every trader and plentiful staff parking, although concerns have been raised as to the amount of customer parking, which will mean very strict management of traffic flow and parking.
The basic cost is £16 million, with a further £3-4 million expected to be invested by the tenants themselves in fitting out, of which £1 million is provided by the LBH. A single block with trading units traditionally facing inward onto a central buyers walk with unloading at the rear, provides the accommodation forbetween 65-70 fruit and vegetable importers/wholesalers and distributors.
The flexible 76 single basic units measuring six meters by 19.5 meters with electricity, water and a ground floor sales booth, has a ceiling height of 7 metres, which will allow tenants to add a mezzanine floor if they wish.
Several companies which have decided on taking up to two and a half units have also opted to install cold stores. There will also be offices for the association, the market superintendent, Defra, as well as a bank and cafes. Further offices are available for accountants and the like.
Between two and five flower wholesalers will operate a separate unit, alongside facilities to develop the needs of caterers and the broader food service sector. Expectations are high.
With market waste being a major aspect of good management, there will be a recycling plant run by the council as well as workshops.
By early July when the market is passed to the tenants to fit out, each according to individual requirement, it will be the final stage in the fulfilment of a dream which began to take shapefor chairman George Bray, 12 years ago.
“The old Brentford Market moved from Kew Bridge in 1974 to the present site at Heston, simply because it was old fashioned and congested,” he explains. “Twenty years on we began tentative discussions with our landlords because it was inevitable there would at least have to be a major refurbishment programme, or hopefully something better.”
Recognising each others’ needs, an agreement slowly began to take shape resulting in the decision for the market to move to its newly created site within a hundred yards of the old buildings.
LBH gave 12 acres of freehold land to Kier in return for building their new market. Kier will demolish the old market and build a new 312,000 sq ft warehouse to sell on or rent out, possibly serving the needs of Heathrow Airport.
“We have six months after July to fit out, so if everything goes to plan we will be open for business by the end of January in 2008,” he reveals.
While markets were under pressure a decade ago, and many of the old family names have disappeared across the country, George Bray believes there is a resurgence taking place which fits exactly into WI’s character of always being a personal retail market.
“There are far more ethnic traders in nearby areas such as Southall, and street markets are booming,” he says. “The range of produce that we carry has increased in leaps and bounds and includes more and more specialities which are bringing in customers from far greater distances.It’s also all about location and I believe we are ideally placed.”
And there is no doubt, talking to Chris Hutchinson, chairman of Spitalfields Market tenants’ association, that wholesalers have a bright future.
“We have 100 percent occupancy, and anyone who wants to join us would have to pay a healthy premium for the good will,” he says.
The scale of the market catchment area is surprisingly large, reflecting many different types of retailing and food service.
“There may be a lot less independent greengrocers in the UK as a whole, admits Hutchinson, “but the street markets in the Greater London area are thriving and important customers with superb businesses are coming.”
Over the years Spitalfields has changed to reflect the cosmopolitan nature of the capital, he says. It is not surprising that when he recounts that there are Turkish, Egyptian, Chinese, and Asian traders, that the range of exotics has expanded beyond the imagination.
“The wide range we offer between us has also continued to attract traditional secondary wholesalers, which send in their lorries often as many as five times a week to serve food shops stretching as far north as Norfolk, south into Kent, and even west at Aylesbury,” he points out.
Much has been made of the benefits that the food sector has brought to the markets, and while Spitalfields does not have prepacking or preparation companies on the its site, there are several specialist firms nearby which have also benefited.
There is also an extra dimension for many of the country wholesalers and in turn their customers, who are the sales points for local pubs and restaurants, so they too are considered as being in this sector.
However, market requirements have also reflected change. One of the greatest costs for all tenants has been the removal of waste and in particular packaging, where Spitalfields piles up no less than 12,000 tonnes a year.
The excellent relationship which it has always enjoyed with its landlords, the Corporation of London, exemplified by an annual goodwill visit by the Lord Mayor, has led to a major project funded through the service charge.
At present 50 percent of packaging is recycled and delivered as wood chippings to Edmonton Power station in one tonne blocks. The concept is racing ahead so fast that Hutchinson expects this to rise to 80 percent and make a general contribution to the cost.
And looking to the future, as the Olympic Village moves off the drawing board, the potential is even more exciting, he says. “Building will be going on all round but we do not expect any disruption,” he explains. Although in this transitory stage following four brief power cuts - the first in 14 years - standby generators have been installed as a safeguard.
But when the roar of the crowd has died down and the medals have been won, an opportunity may arise which could bring London’s meat and fish markets to the site.
“There will be a big car park next door on Hackney Marshes,” he explains, “which theoretically will be dug up and replaced with football pitches. However the 40-50 acre site could accommodate the Corporation’s other tenants and create an entire fresh food complex. (Spitalfields itself is only allowed to sell fruit vegetables and flowers).
“It would be environmentally beneficial, reducing distribution as customers could make a one stop shop,” he says enthusiastically.
The concept has already been broached with the Corporation. “It could bring jobs to the area,” he concludes. “Not many people realise that Spitalfields on its own currently provides work for over 2,500.”
No mention of markets, or indeed the Metropolis would be complete without reference to New Covent Garden, where at last the uncertainty over its future has evaporated and the first stages of a process which will ultimately lead to a phased redevelopment on the site is underway.
A concept design is already being undertaken which takes into account the markets’ needs based on the changing patterns which continue to reshape the fresh produce and floral industries.
The perfect example is the importance that catering distribution has become to the Vauxhall site .
According to the latest annual report of the Covent Garden Market Authority, while total turnover for fruit and vegetables is still the larger figure (£156 million - plus flowers adding a further £56 million) - food service has already reached £140 million and is still expanding.
Furthermore, with the Authority winning its Appeal last year, allowing face to face trading in other fresh foods,the opportunity of being able to provide a ‘one stop shop’ takes on a greater sense of reality for the future.
Jan Lloyd, chief executive of the CGMA, says this first design brief, which will add a further 18 percent space and look at ways to provide added value and education, will be delivered by the end of 2008/early 2009.
“Initially the architects have to prove to us and our tenants that it can be delivered, as well as financially,” she says. “The concept will probably never be built but it produces a benchmark against which proposals from the private sector can be judged.”
“The most significant aspect is that while government still wishes to divest itself of ownership, which will need an Act of Parliament, the CMGA has been given the green light to go ahead and modernise the market, which since its resiting from Central London in 1974, is now in increasing need of renovation,” she adds.
“Much of the scepticism which existed amongst traders up until last year appears to have reduced and there is a more upbeat feeling,” she believes.
This view is reflected by the fact that occupancy recorded in the annual report for last year remains high, with a total of some 250 tenants, of which 183 are in the wholesale and distribution sector. 93 percent of space in the fresh produce sector remains filled.
With the latest report due to be presented to Parliament in July, these figures are expected to show a further improvement.
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