The next twelve months may be among the most challenging ever for the fresh produce industry according to recruitment firm MorePeople.
The firm has just completed its first-ever ‘Best for Business Barometer’, polling the opinion of a small number of people at the highest level in fresh produce every six months to determine the current state of the industry.
Key challenges identified include:
- Changes to the structure of retailing, driven by changing consumer behaviour
- A continuation of the fierce competition on the high street together with a lack of real growth in wages and sales volumes
- Issues over recruitment at the senior level, and attracting interest from graduates
- A resulting continuation of consolidation in the sector
Guy Moreton, director and founder of MorePeople, said: “What is striking is the degree of consistency from all our panel members, who are leading lights in fresh produce, manufacturing and retailing. They clearly recognise that this is a time of huge changes, both in retailing and across the supply chain.
'The industry desperately needs to attract and develop talent in senior management positions across commercial, sales and general management who can respond to this dynamic environment, as well as to attract young people in to this challenging and fast-paced industry”
The panel consisted of a small number of ‘movers and shakers’ in the industry including Frank Robinson, of Produce World Group, Mark Newton, of Freshtime, Susan Barratt, of Nature’s Way, Mike Attwood, of Subway, and Mark Player, of Total Produce.
According to Moreton, they recognised that continued price deflation and declines in food consumption are creating pressures for retailers. While real wages are not rising, there is increased competition for the pound in the consumers’ pocket, and less of it is being spent on food.
For the retail sector itself, the increased competition from the discounters is a well-documented phenomenon. At the same time, consumer habits are changing with more people doing more smaller shops, and this is one of the factors which is leading to less waste. As a result there is a structural change away from what one respondent described as ‘big box’ stores towards smaller, convenience outlets, and this will drive costs higher for suppliers.
However, it was not all gloom and doom: Newton expects to see more growth this year, while Attwood said his main problems revolve around the rate of growth at Subway.
“We expect to double in size over the next five to six years, so challenges are around ensuring we have the ability to produce product for a much bigger estate,' Attwood said. 'Given this growth, I’m confident that suppliers will be keen to work with us.”
Respondents were also asked about their ‘wish list’ for 2015. Wishes included:
- An upturn in the market
- Good graduates who have a desire and enthusiasm to work in the industry
- Consolidation of the grower base
- A robust and restructured Tesco
- Changes around pricing to ensure that costs such as utilities and minimum wages costs can be passed on
- A new government investment that is willing to invest in food security
- A joined-up approach between retailers and their suppliers with a long-term commitment
