To say Waitrose has been outperforming the market when it comes to fresh produce would be something of an understatement.
“I think market growth is something like 1.6 per cent in the last 12 months, whereas we’ve been growing at around 11 per cent,” says Gordon Fairbrother, the retailer’s central fruit buyer.
That fact was certainly something that stood Waitrose in good stead at last year’s Re:fresh awards, where the company took the title of Re:fresh Fresh Produce Retailer of the Year.
“There’s a number of reasons for that,” says Fairbrother. “First is the quality of what we’re selling. The other retailers have all been sucked down into selling everything on price and their consistency of quality has suffered as a result.
“We, however, have remained true to our brand and principles and we will not compromise on quality at any cost.”
He says that has helped create enormous loyalty among Waitrose’s customer base and even helped them take business from the other retailers.
“I think we’re taking customers away from them because people are pleased with the quality of the produce we’re offering them.”
The retailer has also actively promoted its success in store to consumers, through the use of point-of-sale material in the fresh produce aisles.
Innovation has also been a key pillar in the company’s success, and its ability to introduce new ideas and concepts has helped it stay ahead of the curve in the tough fresh produce market.
“We’ve been very innovative,” says Fairbrother. “We brought out Perfectly Ripe about two years ago and we’ve built that into a £6 million brand, and it’s still not in all our stores yet either. Our comprehensive mini-veg range has also helped give us a good point of difference.
“I think innovation is very important now, particularly with the ongoing downward pressure on price in the market, and the increased commoditisation of more and more produce,” he adds.
“There’s a market for excellence and it’s not all about achieving the lowest common denominator, obviously we’ve got to be competitive still. But we’ve developed a broad offer that meets people’s needs.”
Of course, the retailer has gone through considerable change in the last year or so, with the retirement of long standing head of buying for fruit and vegetables, John Foley, after more than 30 years with Waitrose.
Mary Vizoso, who also acts as head of food technology, has replaced Foley. “We’re in a period of transformation within the produce department,” says Fairbrother.
He himself has been in the team for around two-and-a-half years now, having moved over from a grocery role.
“We’ve got, relatively speaking, quite a new, young team in the produce business now, and I think there’s been a general shift in the way we’re approaching certain aspects of what we do. But I think that is only going to make us stronger, more effective and more customer focused.”
He says the new arrivals have brought in experience from other areas and even other retailers, which has all added to the mix.
“There has been a general change in our staff, but its important to note we’re not moving towards a ‘moving-the-buyer-every-six-months’ model.”
He says the main reasons for the changes have been down to a combination of retirement and career progression. “It’s brought in a new attitude and a much broader experience range. We’ve got people who’ve worked for other retailers and in completely different areas, and that means new skills have been brought to affect the produce department and given us new strings to our bow.
“That’s not to say we still don’t have significant knowledge and experience still in the department, but I think we’ve got a good balance now.”
Some of the changes customers are already starting to see have been on the promotional side, says Fairbrother.
“We’ve improving our promotional strategy and sharpened up our marketing. What that means is that we’re basically doing fewer promotions, but making the ones we are doing that much bolder and merchandising them much better.
“I think our promotional offers now rival anything that’s available in the high street, and in the past, I don’t think that was necessarily the case.”
Waitrose has also seen a significant period of expansion, which is opening up new opportunities for the retailer, and its fresh produce team.
“We took on 19 ex-Safeway stores over the last 12 months,” says Fairbrother. “They’ve taken us into new parts of the country, up in the north west for example, as a far as Southport, and that’s completely new territory for us. I think we’re now being perceived as a national retailer, rather than a regional one.
“The new stores have been extremely successful and performing way over the targets. Consumers have responded very well to us, and I think it shows that there has been a latent demand for a retailer like Waitrose in those parts of the country, and there’s still a lot of areas for us to expand into as well.”
Coming from a grocery background, Fairbrother says it was a strange experience entering the fresh produce sector.
“I think the industry is in a state of complete transformation. It’s exceptionally competitive and there’s a lot of in fighting. I feel the supply base is particularly vulnerable to the effects of the jockeying for position of the major retailers, and that’s having a significant effect.
“There’s a lot of people going out of business, and others having to restructure and rationalise.”
Waitrose has a different mentality, he says: “We’re fortunate in that for a long time we’ve had close long term relationships with our producers, suppliers and our growers. So there’s a lot of history and a lot of trust between us that’s been established over time.
“A number of our suppliers have been affected by losing business with other retailers, but they’ve managed to come through it and restructure their businesses to adapt.”
He says the loyalty shown to Waitrose’s supply base through the hard times has certainly paid off: “We’re committed to our supply base and loyalty works both ways. We’re now getting the very best out of our suppliers because they value the fact we’ve been loyal to them.”
Ironically, the consolidation forced on the industry by the other retailers has helped strengthen Waitrose’s hand, says Fairbrother: “The consolidation in the produce industry has significantly strengthened our supply base to make it more robust and more competitive.
“We saw we had to work much closer with our suppliers and they have to work closer with each other. So in the last 12 months we’ve implemented very wide-ranging supplier collaboration strategies, working together with all of our suppliers to improve the quality of what we sell. This has helped us take costs out and improve our levels of service, all of which is paying significant dividends.
“However, I think, if there hadn’t been those enormous changes throughout the sector we wouldn’t have been prompted to make our own changes, so it has done us a big favour, and we’re a much stronger business as a result of it.”
He does not see any great change in the way the industry is heading, however. “I don’t see things getting any easier. I think there will continue to be more casualties among the supply base and the retail picture won’t remain unchanged forever.”
The focus on healthy eating and 5-a-day offers the potential for a huge boost for the industry, but he says he does have some concerns on whether the industry can take advantage of that opportunity.
“If the major players in the market place continue to slug it out on price, what effect is that going to have on quality overall? With the ever-increasing pressure on price, that’s going to affect the viability of importers and exports and ultimately hit home on grower returns, and that’s of great concern. Price is only one part of the value equation.
“How will all this affect a market that is growing well on the back of the health messages, particularly if, as an industry, we compromise on quality to achieve a price point.
“The government is putting a huge focus on healthy eating, but the industry could easily blow it by putting sub-standard produce into the market simply to hit the right price point.
“If we can give consumers a great product which offers a fantastic eating experience as well as being good for you, then we’re onto a winner, surely.”
He says there needs to be far more co-operation within the industry to take advantage of the opportunities facing it. “I do wonder if the industry can adapt to make the most of it.”
The ongoing shift towards dedicated supply chains does make that co-operation more difficult. He says the sector is changing from being one whole industry to a number of supply chains, all dedicated to a different retailer, competing against each other. “That makes it much harder to work together.”
Fairbrother says there were delighted to win the Re:fresh award and says it confirms the significant strides forward Waitrose has made in the last few years on fresh produce: “All of which has been reflected in our commercial performance,” he adds.
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