The soft fruit Industry has been one of the more positive sectors in UK agriculture in the last five years, but how long can it continue? We are already seeing over production on the strawberry supply curve in August, which is leading to continued price pressure from the multiples.
In my Nuffield Study I wanted to find out how more mature soft fruit markets abroad have achieved sustainability through marketing and production innovation.
My study took me to the production led Californian growers, the high value marketplace of Japan and export focussed producers in Europe.
Before I began my study I made some observations concerning the UK soft fruit industry:
* How long can grower returns be supported by the current market?
* One of our biggest challenges is to produce fruit which is continually adapting to consumer needs whilst maintaining high retail values.
* We are seeing increasing legislation and spiralling production costs in a un-mechanized industry.
* There is a growing bad public perception of growing methods.
* How can we continue to focus the evident health benefits of eating soft fruit into a sustainable marketing platform?
* How can we keep seeing year on year consumption increases?
The situation in New Zealand is ideal for growing apples, particularly, Braeburn and Gala. It has few of the major problems we face in the UK, such as climate variations, pest control and irrigation, but it is isolated and, as a result, growers are experiencing serious problems with ever-increasing transport costs, especially as one of their main markets for Braeburn is Europe on the other side of the world, in particular UK and Germany. They are also extremely worried about rising interest rates and a strengthening economy that is putting them at serious disadvantage to Chile, their main competitors. Chile is also able to undercut them in a further way by having much lower labour costs.
Today's consumers are changing their food value structures whereby value added products with natural health benefits and natural dietary supplements are in high demand where incomes are high enough to enable the development of a big enough market for such functional foods.
This report therefore considers functional foods and nutraceuticals in terms of what they are and how they have developed to their current position. The benefits of such products are considered with reference to the ability of some products, depending upon their composition, to prevent cancer and reduce lactose intolerance in adults. The author focuses upon many new products and market opportunities for innovative dairy products such as bovine colostrum milk which is suited to a tight calving system as used in New Zealand. The author ends this detailed report with cosmetic uses for milk and the opportunity for UK producers to establish farmer co-ops, despite the need for government officials to raise consumer and health professionals' awareness of the nutritional value of these products.
The author travelled to Japan, the USA, New Zealand and Australia to produce this report.
The UK is fourth in the world in liquid milk consumption and milk generally has a good image among western consumers but yet milk consumption is not rising and has remained static for some years. A recent KPMG report concluded that a lack of innovation and new product launches were possible reasons as to why consumption is not growing.
In response this report considers innovation within the fluid milk market as new products from around the world are identified and discussed such as Omega 3 milk from Australia and the challenges that are evident when launching these products onto the open market focussing on solutions adopted by producers, processors and retailers. This is concluded and recommendations made as to opportunities that are available for the UK dairy industry, such as on-farm processing and the enhancement of milk, demonstrating the benefits of producing and marketing this type of "health" milk with increased demand and that consumers may be prepared to pay more for product differentiation.
The author travelled to Australia, New Zealand, Finland, Ireland, the USA and Canada to complete this report.
As many farms are now close to areas of population, they see expansion as selling to local people using local food as the marketing tool, rather than producing more commodity goods for uncertain prices.
This report examines the feasibility of this type of diversification within an agricultural business focussing on what makes a good farm retailer and how the future looks as if it will evolve for the UK sector. The author considers the various differences between farm shop retailing in the UK and in the USA, such as the reliance on seasonality and annual events such as Halloween in America as opposed to the more full time approach taken in the UK. Location, quality and the creation of retail theatre are shown as important elements to success using two examples from the USA to demonstrate this creative differentiation needed to compete with the large multiples. Nevertheless the trend towards local food suggests a strong future despite further consolidation in food retailing.
In addition to travelling across the UK, the author visited the USA to assist the analysis.
The fresh produce market in the UK is dominated by the multiple retailers and some of the key issues that have faced producers in recent years have understandably been due to rapid consolidation and rationalisation of the fresh produce supply chain.
This report analyses recent consumer trends and lifestyle changes that have had an impact on food consumption and expenditure such as a greater awareness of health issues and the increase in the number of single households. The author then successfully relates these trends to changes in the supply chain of root vegetables and fruit. The growth of food service (food consumed outside of the home) is also considered as a contributing factor to altering the supply chain in such a way that there is a merging of retailers and take away providers thus prompting an increase in the number of processors providing food in prepared formats. A number of recommendations are made including the need to collaborate marketing to increase negotiating power.
The author travelled to the USA, France, Belgium, Holland and South Africa as part of his study.
There are many schemes aimed at improving the superior image of differentiated meat to enable it to be differentiated by brands and therefore earn a premium. However when selling to supermarkets, the huge differences in power often make this difficult to achieve.
This report successfully identifies collaborative and co-operative activities within the red meat sectors of various countries presenting factors that lead to a successful outcome such as building scale quickly to operate with considerable power when dealing with customers. The support offered by the public and private sectors is included demonstrating that the quality of support is considerably lower in the UK putting us at a disadvantage as funding to commercialise university research has been removed. Product and brand differentiation is also explained whilst recommending that the UK industry needs to identify common aims to allow producers to work together and to rationalise as is evident abroad to keep pace with ever larger customers.
The author visited Sweden, the USA, Denmark and France alongside travel throughout the UK to complete the compilation of this report.
The various farm assurance schemes currently operating have now become so common that they now pose little benefit over unassured milk. This therefore creates the difficulty that farmers are now forced to comply with new legislation but yet receive little extra value for their product than their international competitors.
This report demonstrates how it is very difficult to achieve a higher return for higher standards in the market today as retailers and processors can easily import food from abroad of similar quality, thus keeping value added low or non-existent. The on-farm assurance schemes in Canada and Australia, though, present how a level playing field across the world could be created to guarantee quality as well as safety. This provides recommendations from which the UK dairy industry could learn a lot.
The author visited Australia, Canada and travelled throughout the UK to compile this report.
Demand for eggs from alternative systems increased rapidly in the past but now supply has outstripped demand and margins are a lot lower, exacerbated by the dominance of supermarket own labels. However the growing functional food market may provide an opportunity to restore confidence in the UK egg market.
This report analyses how other markets have maintained high levels of egg consumption such as those that exist in Japan and investigates how industries abroad have added value to their egg markets. This is evident in Australia where the Clover Corporation is trying to target the benefits of key components of eggs to certain people in society, notably pregnant women. This is coherently drawn to an end with emphasis on identifying opportunities for UK producers to benefit from the growth in sales and interest in functional foods.
The author visited Australia, Japan, Canada and America to produce the report.
As the popularity of organic milk production increased and government grants encourage producers to convert, there was an over supply in 2002 and some recently certified organic producers were selling their milk on the conventional market without a premium price that they had anticipated.
This report evaluates the current position of the organic market identifying that more than half of the milk produced is processed into value added products demonstrating that the UK can learn a lot from Denmark in its processing techniques in terms of economies of scale implemented from Arla Foods Plc and up to date data from the Danish dairy board allowing demand to be predicted and thus preventing over supply to maintain the premium price. Emphasis is placed on the need to educate and promote organic produce to consumers to maximise the number of retail outlets and sales whilst instilling an image of countryside management as part of organic milk production.
The author travelled to Denmark, Germany and the USA, in addition to assessing the UK industry/market.
The limitations of commodity farming on the profit margins that can be generated has led many farmers to undertake direct marketing and selling of their products through local outlets focussing on specific niche markets, in this case to those customers who are concerned with the health and welfare of themselves, the animals they eat and the environment, alongside the preference to buy from people they can trust.
This report therefore outlines how it is possible to directly sell farm produce to local consumers using grassland systems to differentiate the product through taste. Will Edwards presents how a small grassland farmer can compensate for their lack of acres by direct marketing. Opportunities in this sector arise because of the resentment by many people of powerful supermarkets prompting buy local attitudes helping to protect UK farmers from the large quantities of food flooding the market from emerging nations. Organic certification and processing offers further potential despite the lack of local abattoirs. Nevertheless the climatic favourability to grow grass in the UK creates a competitive advantage.
The author visited France and the USA to compile this report.
Before the Second World War most food, such as milk and meat, were sold locally through small shops, market stalls and butchers. However, today, the majority of food is purchased by the consumer through huge supermarket chains with little information on its origin.
This report effectively explains the reasons why farming needs to be reconnected to its local communities, those being both rural and urban populations. This is because the UK farmer cannot produce at the costs that global commodity markets demand and with some of the tightest regulation in the world, the exceptional food safety of the UK can allow local markets to be targeted. The author develops this through identification of the barriers to reconnection and ways in which these can be overcome. The role of representative organisations such as the NFU are outlined, and the need for farmers to collaborate and inform the consumer on a wider scale.
The author travelled to Indonesia, The Philippines, Singapore, Australia, The USA, Canada, France, The Republic of Ireland and throughout the UK.
UK production of poultry meat continues to grow steadily, despite the British farmer facing increasing pressure from complex legislation, lower margins, demands for greater animal welfare, environmental issues and the strength of the British pound. As a result, the role of the farmer within this supply chain is changing.
This report investigates why the UK is flooded with imports of poultry meat, how the farmer's role is developing, the impact of free trade, the regulations and codes of practice conformed to abroad and ultimately whether the UK industry has a future. Utilisation of the product is analysed with Thai producers establishing markets for all body parts thus improving the value of each bird, whilst food safety was found to be paramount despite variations in interpretation across nations. Suggestions are made for UK industry presenting the need for political lobbying to gain support whilst learning from the American industry in terms of improved marketing and promotion.
The author visited the Netherlands, Germany, Denmark, the USA and Thailand to conduct research to enable the production of this report.
As supermarkets become more cost driven throughout the world, retailing homogenous products, a market develops for fresh speciality foods to provide the shopping experience differentiation from that of their competitors and maintain the quality image of their stores.
This report presents ways in which the red meat industry can fulfil this demand. Considerable emphasis is placed on the importance to maintain the quality of the raw materials prior to processing and more importantly to bring this to the attention of the consumer. Firstly the European market is analysed presenting the current situation and using recent trends possible opportunities for the future are clearly identified. The report then focuses upon the processing side of the industry with various techniques discussed and then innovative branding and distribution concepts are demonstrated. The author concludes showing how this presents a great opportunity as commodity values are undermined providing that strong branding and product protection techniques are utilised.
The author visited France, Italy, Hungary, the Czech Republic, Sweden and Norway to complete the report.
As the UK dairy sector currently experiences difficulties in achieving margins that were enjoyed in the past, it is vital that milk and its products are marketed better in the UK to increase demand and thus assist prices rises.
This report begins with an overview of the global milk market before considering the farmgate milk price, milk consumption, processing and milk product ranges in various countries throughout Europe and the Southern Hemisphere. The author then concludes by recommending changes for the UK industry in attempt to give it a sustainable future. These include the need for some world class dairy companies in the UK with farm ownership to maintain control over prices, to abolish milk quotas as was evident in New Zealand and the need to improve marketing and management of the milk industry is of paramount importance.
The author travelled to Holland, Germany, Denmark, Australia and New Zealand to compile this report.
Many consumers fear purchasing beef for consumption, either in the home or whilst dining out, because of the chance that it may be tough. The Beefeater chain in the UK source all of their striploins from Australia because of their consistent ability to be able to produce quality, tender beef.
This report therefore investigates why Australian and American producers can consistently produce good eating beef. This report begins with a comprehensive review of the UK beef industry incorporating details of imports and exports alongside production, processing and retailing. Similarly the US and Australian beef industry is investigated on the same criteria. The author then explains the biological basis for achieving tenderness, flavour and marbling, with further discussion into food safety and marketing. Ultimately this is concluded demonstrating that producers in the USA and Australia achieve this quality through being customer focussed due to no subsidy support, recommending that the UK industry must brand its products to become price makers and also become market oriented.
The author travelled to the USA and Australia to enable the completion of this report.
