What’s changed in the last 20 years?

Speciality Bites with

Paul Hargreaves

Chief executive of Cotswold Fayre

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I am starting to think about how we celebrate 20 years of Cotswold Fayre next year.

Our tenth birthday involved our top customers getting very drunk on Pimm’s at Henley Regatta, and some of them are still talking about that, so we have a lot to live up to!  However, as a prelude to that I have been thinking recently about how the industry has changed in the last 20 years, some positive and some maybe less so, so let me share these with you.

First, a huge positive is just how successful the speciality food sector is compared to twenty years ago.  The growth in the number of brands and retailers wanting to stock good tasting food made by people who care has been exponential.  This is reflected in the growth of food shows, food magazines, the British pavilion size at foreign trade shows, on-line speciality food businesses etc. etc. It is also reflected in the growth of wholesalers like us, both in number and size.  I was pleased at the end of our Year 1 in the Year 2000, but we are now 50 times larger than that!

So, there is encouragement for all of us there, but that growth of a sector brings with it challenges too.  For producers it means that it is more difficult than ever to launch a new brand into the sector with more competition for every centimetre of shelf or fridge space in retailers.  As a result, it is a tiny minority of new start-ups that reach 7 figure turnovers and become a viable, sustainable business.  We have also seen, in recent years, an increase in business failures within the sector.

For independent retailers, this growth and spread of many speciality brands into the mainstream has meant that it is more difficult to hold onto successful brands as exclusive for independents and then end up competing on price with the supermarkets.  This is an increasing challenge for us as a wholesaler too persuading producers that they need to have a sensible pricing strategy that does not result in highly divergent pricing for independents and, say, Waitrose or Ocado.  Some simply do not, or refuse to see, that having products available for sale in Waitrose 15% cheaper than a farm shop is a problem.  It is!

The success of the sector has also resulted in many larger businesses wanting a piece of the action.  Many large manufacturers have created fake artisan food brands, without the provenance and passion behind all the brands that were present in the sector 20 years ago.  Some even develop fake marketing stories to try and invent their provenance story.  Also attracted into the sector are others who think they can make money by piggy-backing onto the start-ups and growing businesses therein.  Be careful of them!

More than twenty years ago it was a farm shop manager who persuaded me that there was a need for a wholesaler of British products particularly to farm shops.  She told of being bogged down with too many deliveries which were taking her team off the shop floor, not having enough staff to place 100 supplier orders a week and her evenings being submerged with paying invoices.  This is why Cotswold Fayre started and clearly there was a need resulting in our rapid growth, which also spawned off a number of other companies copying our business model.  Incredibly though, the problem first described to me has not gone away.  Many farm shop, food hall and garden centre owners and managers still complain about too many deliveries to their stores.  If anything, due to the proliferation of brands mentioned above, the problem is greater than ever, not helped by many brands feeling the need to compete with their own wholesalers where they feel they can make a nice bit of extra margin on a piece of juicy business.

In many ways, twenty years after starting Cotswold Fayre started, it feels like it is time for the sector to enter adulthood and maturity.  There are still too many businesses within the sector behaving like teenagers blown around by the wind without having a grown-up business strategy and without proper systems in place.  If we are going to maintain the growth of the sector over the next twenty years some things need to change because the supermarkets have much of this in place.  Most of all we should be careful that what we offer within the speciality food sector is what consumers continue to want.  They want products that have high environmental credentials, they also want assurance that the products within stores not only have provenance but also that the environment hasn’t been damaged unnecessarily in putting them on the shelves.  This to me is the main area we lag behind other sectors and we should grow up into the 21st century.