Fish
Billingsgate Seafood School operates rent-free and service charge-free on the site of the historic fish wholesale market in the heart of the City of London. Established for young people wanting to start a career in the industry, the school also counters the demise of home economics in the school curriculum.
This lack of education led to young people being unaware of the benefits of fish, and subsequently prompted a slow decline in fish being used in the household. It aims to reverse this trend by reintroducing schools programmes and industry training in a brilliant example of an industry-backed initiative to boost sales and long-term profitability.
The school offers three strands of training: free outreach and on-site courses for schoolchildren, courses for seafood lovers, and the biggest growth area, industry training. Financially, it survives on support from the Worshipful Company of Fishmongers, the City of London Corporation and the fish wholesalers themselves. CJ Jackson, chief executive of the school, says at first traders were hesitant about hosting the school on the market premises, especially as industry courses involved bringing retail staff into the market.
“But slowly they saw the benefit of promoting the industry to a wider audience,” she says. With fresh produce’s close ties to scratch cooking, the catering industry and healthy eating, the industry would surely benefit from taking responsibility for its future through a similar education hub.
Dairy
Anyone who is active on social media or reads the business pages of the newspapers may have picked up on some noise from the dairy sector in recent months.
While produce suppliers have been struggling with the consequences of the supermarket price wars, dairy farmers may have been even worse hit – and they haven’t accepted it lying down. With milk being used as a loss leader by many retailers, according to the NFU, the price of liquid milk has dropped to 20p per litre. In context, at the beginning of 2014 it was 32p per litre, and to make a profit farmers need between 27p and 28p per litre.
“What we need to do to correct the price is to stimulate demand and get volumes going through,” says Tom Lander, NFU dairy adviser. “When the milk price was low, retailers weren’t as quick to lower the price of cheese. There is merit in dropping the retail price of slightly higher-value products, such as cheese, in order to pass on the savings to consumer to encourage demand. At times of oversupply, let the consumer benefit from low prices, not the retailer. And it’s the same in horticulture – you need to clear that backlog of product and encourage foodservice and retailers to give a direct commitment.”
From running strike action at processors, tweeting under one hashtag or running NFU-backed campaigns, fresh produce suppliers could learn some valuable lessons about how the dairy sector has kept pricing issues high in trade and consumer
consciousness.
Drinks
Vegetable giant Produce World regularly recruits from the meat, dairy and ready meal sectors, and current HR director, David Frost, himself hails from a background in the drinks industry.
“In any industry it’s easier to develop a mindset that ‘we are unique’, however, my general experience is that many sectors share a lot in common,” says Frost. “But many sectors have to manage customers with high expectations, have a supply that is affected by climate, and have to keep up with consumer behaviour that is constantly evolving. The key is to develop teams that combine a broad skill and experience set.”
Frost says during his time in the drinks sectors he learnt about the expectations of retailers, the management of change in a fast-changing environment, the application of lean manufacturing and the impact of innovation on the bottom line.
“One example of managing change at Carlsberg was when we created a joint venture with a competitor to create one shared service company to maintain drinks dispensing equipment on customers’ premises,” he says. “This required a mindset and culture of collaboration and trust in a traditionally very competitive sector.”
Livestock
Fresh produce must surely be as far away from intensive livestock as chalk is from cheese. Not so, according to Ashley Clarkson of analysts Grant Thornton, who believes they are closer than you’d think.
“Livestock and fresh produce receive very little EU subsidy, so for that reason they have to work hard to make money from what they produce. Cereals, beef and dairy get more subsidies so they aren’t at the same point.”
But where produce falls behind, and livestock – namely, pigs and poultry – wins points is through waste management, efficiency and collaboration. Clarkson explains: “The livestock sector finds value in everything it uses – all by-products are utilised. For example, in poultry, no part of the bird is wasted. Fresh produce doesn’t necessarily deal with the outgrade properly – some might go to processing, some might go to landfill.”
Clarkson says livestock producers programme everything “from cradle to grave”, from feed and management data to slaughtering weight and timings. “The result is that all transportation is aligned and fits to factory capacity, which fits to the customer needs, and there are no hold-ups or wastages,” he says.
He points out that meat products are more homogenous than fresh produce – a diverse vegetable crop is never going to be as efficient as a single, repetitive, cut of meat – which enables the livestock supply chain to be more efficient. Despite this, he says aiming towards this type of uniformity in supply would help fresh produce businesses cut costs.
Clarkson believes produce is “well behind the curve” in collaborating across Europe, which would help create scale in the sector. “The reality is that the UK is not the main player in the fresh produce market, so collaboration across the EU is really important. Europe is seen as one marketplace – North America and Canada are usually put together, Europe, Africa, South America and Asia. The UK needs to work more closely with Europe – produce is well behind the curve with this.”
Automotive
The automotive industry is often touted as having one of the leanest supply chains, but it can also offer lessons in procurement practices and supplier relations.
David Atkinson, procurement specialist and consultant at Four Pillars, says more and more businesses now understand how procurement can make a “significant contribution” to their success, but the automotive and aerospace industries are well ahead of the game.
“These sectors use more effective performance management of suppliers,” he says. “They use supply development to drive innovation in processing or logistics, they redesign products by forensically looking at every single cost driver, they manage supply relationships more intensely and they are more open to collaboration to get ideas.”
During his 30-year career in procurement and procurement consultancy, Atkinson says it is the customer, or buyer, within the automotive or aerospace sectors, who will challenge suppliers to improve products or innovate. “They might run a series of internal workshops and dress it up in supply relationship management support. They don’t collaborate in a benign way – it’s not to make people feel better but to impact the bottom line,” he says.
Strong, purposeful and focused collaboration has helped the automotive and aerospace supply chain remain healthy and profitable – in times of cost-cutting at every corner, more collaboration within the chain is a positive challenge fresh produce could take on for the future.
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