The small market town of Spalding, which sits in south Lincolnshire in an area known as little Holland, seems an unlikely host to the largest fresh produce centre in the UK. But the area, which stretches across a 10-mile radius from Spalding to Boston, Bourne, Holbeach, March and Chatteris, acts as a national hub and is a well established name in the trade.
The range of facilities and services that Spalding has to offer has been the making of the area as a focal point for the industry, with a number of businesses drawn to the town to make use of the unparalleled number of resources to hand. The makings of the supply chain are readily available within a stone’s throw of each other, and the spectrum of businesses based in the area, from growers and packers to suppliers and logistics hubs, appear to enjoy a reciprocal set-up.
So how did a small market town, just north of Peterborough and with a population of only 22,000 people, end up being the hub of the fresh produce industry?
The history of the fresh produce trade in the area stretches back more than 70 years. The van Geest brothers set up a business in the area in the 1930s, starting out with a flower bulb import operation, moving into fruit and vegetables in the 1940s and bananas in the 1950s, before branching into processing and becoming one of the most prominent names in the trade.
“The effect of the van Geest brothers setting up here was like Marks & Spencer coming into a shopping centre - everyone wanted to come in,” says Tim O’Malley, managing director at Nationwide Produce, which set up in the area in 1988.
The van Geest brothers put Spalding on the fresh produce map, and their thriving business was the catalyst for the success of the area.
“Historically, this area has been a significant provider of UK-grown produce, which inevitably led to those companies looking for the economies of 52-week supply through import,” says Jamie Rungay, procurement director at Utopia UK, which was established in Spalding in 1994. “This, along with the Geest - now Bakkavor - site, further strengthened the existing infrastructure, making the area a recognised hub for fresh produce imports.”
The way the fresh produce sector has evolved has driven companies to set up their own facilities in the best possible location for their business, according to Mike Harpham, a director at Malet Azoulay UK, which opened a Spalding base in 1989. The fresh produce industry has changed a lot in the last 10 years, when prices were negotiated with retailers on a week-to-week basis, and the responsibility of the supplier ended with the delivery of the product, he says. “The introduction of the category manager when Wal-Mart bought Asda in the 1990s brought in a different approach to supplying the retailers,” Harpham says. “We are expected to take greater responsibility of product throughout the chain, so the way we operate has become about more than selling, trading and delivering.”
The sub-tropical specialist moved to its present site in 2004, when Malet Azoulay UK began to focus on supplying Asda, and a separate company, Malet Select, was formed to work with Marks & Spencer. “We wanted to demonstrate responsibility and ownership for what we do,” says Harpham.
The company has diversified its customer base since then, and Harpham is upbeat. “The business is growing now,” he says. “We are happier with our customer base, and we are looking forward to more investment.”
Top Gro, a two-year old avocado firm formed by Mehadrin Tnuport Export and South African avocado association Afrupro, is based on the Malet Azoulay site, with its own packhouse and ripening facilities on site.
The grower-based company aims to provide UK retailers with the best fruit and growers with the best price, says general manager Mike Lister. “The Top Gro model could be the way forward for the fresh produce industry,” he adds. “It means that when a supermarket wants to visit its supplier, it is not dealing with a big group of people, and they like the idea that we are a grower-based company, rather than a marketing organisation.”
The firm has increased its share of the Tesco programme from 10 to 30 per cent in the last two years, sourcing from Israel from January to May, South Africa and Peru from May to September, and Chile from October to January, to achieve year-round supply.
The number of distribution and third-party services in and around Spalding has continued to attract fresh produce businesses to the area.
Fowler Welch Cool Chain has linked up with a range of fresh produce companies in the area since it was formed 11 years ago. “There is a gravitational pull for fresh produce businesses to come to Spalding, and we are part of the equation here,” says commercial manager Laurence Shea. “Spalding and the Lincolnshire area forms the biggest fresh produce hub by a large margin and, for the moment, it is the right place for us. There are all kinds of companies here - importers, packers, manufacturers and growers - both large and small.”
The 350-strong twin-temperature fleet, which takes fresh produce in and out of the national hub or straight to supermarket regional distribution centres if volumes are high enough, is anchored to the Spalding base. The core business is the chill chain consolidation for UK multiples, with fresh produce deliveries making up some 60 per cent of the business, alongside the distribution of other chilled and ambient foods.
The central location in the UK has allowed the firm to build on its service, according to Shea. “Produce is in and out within hours, and we can offer both day one for day two, and same-day deliveries,” he says. “The lead times from retailers are reducing all the time and the products we carry are very sensitive, so we need the most responsive and flexible supply chain.”
The Lincolnshire hub is supported by bases in Paddock Wood and Teynham, both in Kent, and Maasland, in the Netherlands.
The infrastructure already in place in the area has been a major draw for fresh produce companies.
Fresh World Ltd uses third-party services, all readily available in the area, to cut down on capital costs. “The service angle of a fresh produce company is the biggest challenge, and if you are not dealing directly with a supermarket, you can afford to be at arm’s length,” says managing director Colin Galbraith. “All the facilities we use are in a small area. If you fragment it too much, you will never be able to distribute properly, and that is why we use the resources available in Spalding.”
The firm supplies packers, primary and secondary wholesale and the foodservice sector in the UK, Ireland and Denmark with onions and salad products. Around 60 per cent of product is sourced from the UK and, of this, some 75 per cent is sourced from Lincolnshire. Imports from the Netherlands, Poland, Germany, Egypt, Chile, Australia and New Zealand make up year-round supply.
“I looked into opening an office in the East and South East, and I looked at Wisbech, but Spalding is ideal,” Galbraith says.
The opportunities for growth in Spalding are many and varied, according to O’Malley, who says the town is a prime area for business. “It was a strategic move to gain more access to the production area, and make use of its logistics facilities and transport links,” he says. “You can put fresh produce on a chill chain to just about anywhere from this area.”
The firm supplies mainly root crops, brassicas and salads to the foodservice, wholesale, discounter and export markets. Turnover jumped from £43 million in 2005-06 to £60m in the last 12 months and, with a high proportion of this increase from root crops sourced from Lincolnshire, the Spalding office has been instrumental in the growth.
The majority of the fresh produce businesses based in Lincolnshire are not looking to market product specifically in the area, as seen in the likes of Kent and Cornwall, but are instead aiming to supply on a national level, with the emphasis firmly on distributing their offer around the UK. “Lincolnshire is the seat of fresh produce,” says Galbraith. “But we need to take the time to make consumers see that if you buy an onion, broccoli or cabbage from Lincolnshire, it is the best.”
The Spalding area is well known for its role as a key distribution hub, but the surrounding area is also a major production site in the UK. “If Kent is the orchard of England, we are the vegetable garden,” says Martin Tate, commercial director at Lincolnshire Field Products. “We need to promote the benefits of the local fresh produce offer in conjunction with other regional exports, rather than just be a secure banker.
“We need to make sure the Lincolnshire season is as extensive as possible, using different growing techniques and varieties to facilitate that. We have got to take an element of responsibility, and push the boundaries of Lincolnshire to supply British produce as close as possible to 52 weeks of the year.”
Tate bought LW van Geest Farms Ltd from the Geest family in 1997, renamed it Lincolnshire Field Products, and has built up a distribution subsidiary, Fresh Linc, around the original business. Turnover for the group has reached £125m.
The firm, which is a member of Select Lincolnshire, sources product from growers across the UK and Europe, but more than 50 per cent is produced in the region. “It is the core of our business,” says Tate. “The Lincolnshire philosophy is a hard-working mentality, and our two biggest assets are the people that work for us and quality of the land we farm. There is a strong work ethic in the area.
“Spalding has been, remains and will continue to be pivotal to the fresh produce industry in the UK,” he adds.
The status of the Lincolnshire region as one of the most important for vegetable production attracted Elsoms Seeds to the area 163 years ago. The seed breeder and marketer carries out trials from Scotland to Cornwall, but has more than 30 hectares of trial fields and glasshouses in the Spalding area. “We want growers to see our material in their location,” says Robin Wood, who heads up the vegetable seeds division. “But this is the most important part of the country for vegetable production, which means we are located in the best place.”
The firm has started inviting players from each stage of the supply chain to its Spalding base to inform them about the seed-breeding process. The timescale needed for seed breeding is perceived as a massive barrier by both growers and retailers, with the process taking 16 to 17 years, but, according to Wood, this can be resolved with better communication. “We want to work closer with supermarkets and packers because the more they know about our problems, the more they can understand the problems faced by growers,” he says. “And they might have some suggestions for us.”
Elsoms Seeds is working to open up a dialogue between all the parts of the food chain and the seed-breeding industry to inform the sector about the process involved and promote the exchange of feedback and ideas. The firm held its first brassica conference in February, inviting growers, packers, supermarkets, and consultants to its Spalding base, and this will be followed by its annual carrot open day, now a regular event, held in October. “We want to have a pro-active approach,” says Wood. “We have taken UK growers to France, Spain, Poland and the Netherlands to meet growers and talk to them, to explain the processes of seed breeding and seed treatment and promote communication, and now we want to reach out to the retailers and other parts of the chain.
“We already work closely with the main growers and packers because we breed something for them, but more and more, their customers - the retailers - are telling them they want something different to offer the public, and it is very competitive,” says Wood. “The key thing that we do is help offer that something different, and that is why our goal is to get closer to the retailers; but they have to understand that the process takes time.”
But while the range of fresh produce businesses in the area stretches right back to seed breeders, will the fresh produce trading estate, as a whole, continue to thrive? The answer, according to key players, is a resounding yes.
Plenty of investment is still being ploughed into Spalding and, although a number of firms are busy putting plans in place to move or upgrade their facilities, they have no intention of leaving the area.
Worldwide Fruit is upgrading its Spalding division with a £5m move just a few miles away to Pinchbeck. The development, which will feature an environment-friendly 52,000sqft factory and an 8,500sqft office block, is expected to be operational from October. The factory will consist of four fully racked cold stores, 10 double-tier ripening chambers and a 22,000sqft temperature-controlled packhouse. “To meet the demands of our customers, a more appropriate facility was required with a purpose-built factory to guarantee our efficient levels of production,” says chief executive officer Robert Balicki. “The new coldstorage and ripening rooms are low maintenance and reduce our year-round energy costs.
“Although the move will be quite neutral in terms of jobs and redundancies, hopefully by going forward with the new site we will expand in size and personnel, though nothing solid is in place at the moment,” he adds.
Fesa UK, which has been based in Spalding since 1992, is to move from its three-acre site to a nine-acre plot three miles away on the perimeter of Spalding, by the end of the year or early January. “We will be completely revamping the premises,” says managing director Jim Rogers. “We have outgrown the old site, and the move will enable us to take on more business.
“This is a thriving region, and it will get bigger, with more diversification,” he adds.
But are there opportunities for new businesses in the area? “The trade is much harder than it was 20 years ago,” says Harpham. “The way the supermarkets have rationalised their business means there is a bigger barrier for the industry - it is much more sophisticated now. We will not see a proliferation of lots of new companies solely because of the Spalding effect, but there will be a promising future for those who can offer a point of difference and can maintain links with the major retailers.”
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