Tesco is planning to set up a global network of “producer clubs” to improve communication and efficiency within the supply chain.
Matt Simister, Group Food Sourcing (GFS) director at the supermarket, told FPJ the concept of producer clubs was “an idea rather than a reality”, but it would involve suppliers across the world working more closely than ever before. He said: “We would like a mechanic to communicate to producers in a modern way, and through that we can be clearer with specifications, certain policies, opportunities to buy inputs or whatever it may be.”
The plans are still in their infancy, but Simister described the model as a “free-flowing, modern kind of iCloud”, wherein producers around the world are tuned in to the Tesco community. The model would also allow producers to communicate better among themselves and share best practice, he added.
“I’m very excited about producer clubs,” said Simister. “We tried it in fresh food a number of years ago in the UK.
“I would like to roll out group producer clubs to our best growers and producers, not just in produce, but across primary areas. Any tool that can improve the communication across the channel has got to be a good thing.”
While no timescale has been laid out, Simister said it is an evolution that is likely to happen gradually over the coming years.
He moved to stress that GFS did not represent a move into direct sourcing, but was an opportunity for its biggest suppliers, including importers, to grow their business with Tesco globally.
“It’s about making products more accessible [globally],” he said. “We can be the distribution channel for producers. GFS is about how we harness the best suppliers across the group. We see that the opportunities far outweigh the challenges.”
GFS is also looking at consolidation of distribution services and grouping products at source to remove the “inefficiency and wastage” in the supply chain and end the current situation in which a wide range of Spanish produce, for example, is all sent to the UK separately.
Simister also scotched suggestions that Tesco could follow rivals such as Morrisons and The Co-operative in owning farms.
“It’s absolutely not a strategy to buy farms or vertically integrate. We want partnerships with suppliers who gear up around efficient supply chains into Tesco,” he said.
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