A bit of background: We are currently putting together our Christmas catalogue and generally we like to meet our prospective new suppliers before we do business with them.  This is normal for many of you – and I employ 5 sales people who do the same for us i.e. drive round the country visiting customers and prospective customers.

Well, one of these potential new suppliers said that they didn’t want to come to Henley-on-Thames for a meeting as they were trying to reduce their carbon footprint!  I haven’t heard this one before!  Whilst his aims are admirable, it didn’t provoke a great sense in me of wanting to do business with this company.  I then started to question myself and think how much of our travelling around the UK is necessary?  The trouble is that business works essentially due to relationships.  Everything is to do with relationships.  You might have the greatest products in the world, but unless you build relationships with customers and suppliers and other third parties, you won’t make your millions!

This particular company has products that we will probably only do as part of our Christmas catalogue, so as a one-off we will probably go ahead without a meeting, but with our suppliers for the bulk of our business from our all-year-round range it would be impossible to take on a new supplier without a face-to-face meeting.  Our supplier relationships are all about partnership and I don’t think this is possible without a face-to-face meeting.  Do correct me if I am wrong!

Sure, there are ways of reducing our business miles.  We don’t use enough the technologies that are now available – e.g. video conferencing.  We are just introducing a weekly “conference call” for our sales team of 6, which will reduce the frequency of physical sales meetings in our office.  However, there really is no substitute for meeting and eating together.

I’m off to Mexico now for a trade show – oooops!

Agreeing with Mr. Ward’s premise that 20% of customers being responsible for 80% of turnover, I’m not sure that a clever loyalty scheme can’t increase the turnover from such customers as well as increasing the ‘spend’ of the 20%. Most independent retailers have a much less technological system than the multiples, which may enable more clever schemes rather than the straight 1% discount Tesco’s offer – although this is currently doubled to 2%.

I admit to being quite surprised at the average basket spends quoted by a few farm shops at the FARMA conference in January. Figures ranged from just over £10 to around £15. The £15 basket was viewed as being fantastic by some green-eyed farm shop owners. Surely by encouraging shoppers to spend more with a loyalty scheme would generate more profit not less. Giving discount for basket spends in excess of a certain value is one idea. Surely it should be possible to get these basket spends up with a bit of clever retailing. One of the businesses I run is an on-line shopping site, and many customers just come onto it to buy a couple of items, but end up spending over £20. The average basket spend on that site is £44.

Incentivizing customers to introduce their friends to the shop by giving a voucher is another. Generally I think there are many ways to “box clever” by using schemes like this. To write them off with a attention-grabbing headline is a little premature. I think it is good that independents are introducing loyalty schemes or thinking of copying marketing schemes of larger retailers is good, as it means that they are thinking considerably “bigger” than they were a few years ago. We now regularly do special offers and tailored promotions to farm shops and food halls; these places weren’t even asking for these things a couple of years ago.

Independent retailers have taken their game up a notch – let’s not criticize them for doing so. OK, some marketing plans won’t work, but please let’s encourage them to try. We are in a growing market, let’s keep on innovating and growing!

From both countries I can report that business in the speciality food sector is better than it was this time last year.  Everyone seemed to be reporting better figures for Christmas trade and there was a far greater sense of optimism about the coming year.  Ireland is one of the so-called “PIGS”, which stands for “Portugal, Ireland, Greece and Spain”, which are perceived as the weakest economies at present in the Eurozone.  Sure, as I reported in November, Ireland is struggling in a very deep recession, but they have dug in and the government is working very hard to get them out of it.  The Irish Food Board, Bord Bia, really is an incredible organization, and if other sectors work as hard as they do, there will be a good future for Ireland.

The Bord Bia event I was attending was the closest thing to a business version of speed-dating I have ever been on!  160 Irish suppliers together with 350 buyers from 27 different countries were involved in a total of 3,500 meetings in one day.  20 minutes were allocated for each meeting, then a bell rang and we moved on to our next pre-arranged meeting.  It was a phenomenal feat of organisation and Bord Bia deserve the highest commendation.  Personally I had 18 productive meetings in the day – and then was hoping to collapse in a heap at the airport, but another business contact was waiting there to talk to me!  UK trade shows ought to look at this kind of format as I believe far more would be achieved than at the average trade show.

Generally since the snow at the beginning of the year we have found this year very buoyant indeed, so much so I am taking on two extra field sales people and a sales manager, in effect doubling the sales part of my company.  It’s a bit of a risk, but I feel that we are poised for good growth this year – and it would be a shame to miss it!

I have just come back from Farm & More Conference, where there were record numbers of delegates and a thriving trade show alongside it. There was a general feeling of buoyancy about last year, despite the recession, which would have been even more optimistic had many of the retail outlets not been hit hard by the snow at the start of January. There were stories of new farm shops that had reached over £1million turnover in their first year and several more established shops now trading at £3-4million.

I think it is true to say that this sector is no longer an interesting sideline to the high street, but an important part of food retail in the UK. Just as well really as our business is built on it – and I have just put into place growth plans of 60% over the next two financial years!

It also became clear to me through talking to delegates and generally observing what is working, and what isn’t, in farm shops throughout the UK. Clearly to be a genuine farm shop there should be some of the farm’s produce for sale within the shop whether that be animal or vegetable. There should also be other locally sourced products, possibly from other farms in the area or artisan local producers.

However, let me sound a warning bell here. Many of those shops that limit themselves exclusively to local produce are not growing and developing as they might. That may be fine if the shop is a lifestyle business, but to get into the multi-million £ turnover levels, it is important to also stock those products that consumers expect to find in a speciality food shop. Stocking these extras, which may in some cases be 50% of the stock of the shop, enables the retailers to increase the basket spend per customer. I was shocked at how low these average baskets were – generally ranging from £12-£20 from those who spoke up in the seminar. Increasing the range of products in the store should surely manage to add 50% to these baskets and markedly increase profitability. Another clear strategy for a “winning farm shop” is to have some products made in store e.g. a bakery. This dramatically increases the “realness” of the shop and psychologically encourages customers to spend more. One farm shop gave the example of meat pies. They used to buy these in locally but when they invested in some equipment and started making their own, sales increased by more than three-fold.

No rest for the wicked. By the time you read this I shall be in Cologne at ISM (European confectionery and bakery show) shopping for next Christmas. Well, we have had the luxury of not thinking about Christmas for a month – and that’s it!!

24-30 January 2010 celebrates the eleventh annual Farmhouse Breakfast Week. The awareness week is organised by the HGCA and acts as an opportunity to educate the nation into the importance of eating a healthy breakfast.

Cotswold Fayre, the fine food supplier, stocks a range of breakfast products and is supporting the HCGA campaign. Here are some of Britain’s must have breakfast foods that can be bought directly from the website.

Porridge

Porridge’s growth in popularity has changed the face of British breakfast habits. This low fat, oaty breakfast cereal, which releases energy slowly, keeps you feeling fuller for longer and stops the hunger pangs till lunchtime. The high soluble fibre content of oats is also beneficial as diets low in fat and rich in soluble fibre have been shown to help reduce high blood cholesterol levels. Oats also provide useful amounts of thiamin, riboflavin and vitamin B6 plus calcium, magnesium, iron and zinc and small amounts of vitamin E and folic acid  – making porridge a super nutrient-dense food, full of natural goodness.  In addition, long gone are the days where you had to stand over a hot stove stirring a pot of porridge.  Most rolled porridge oats are pre-steamed, which means that they can be cooked in minutes on the hob or in the microwave.

Bread or Toast

Nothing beats the tempting smell of hot toast.  It’s synonymous with breakfast and nearly one in six people say it’s their favourite breakfast smell (according to an online survey conducted by OnePoll).
Bread is an important source of energy and other nutrients.  For the health conscious, wholemeal toast is best – it is a good source of dietary fibre, protein, B vitamins and one slice makes up one of your recommended three daily servings of wholegrain. Why not make your own bread at home? Not only will it smell great but you can tailor the ingredients to create your perfect loaf!

Wholegrain cereals

Breakfast cereals account for over half (53.6%) of breakfasts eaten at home (TNS Worldpanel 2008). The choice is astounding, so look out for the many wholegrain cereals made from wheat, oats and barley.  Several studies have shown that those who eat lots of wholegrains, such as wholegrain cereals or bread, reduce the risk of heart disease by up to 30%. Breakfast can be a rushed affair for many - 40% of people spend less than 10 minutes preparing and eating their breakfast during the week (Breakfast Facts from www.farmhousebreakfast.com) so wholegrain cereals provide the perfect solution.  A bowl of wholegrain cereal served with semi-skimmed milk only takes minutes to eat.
Cotswold Fayre stocks a wide range of cereals including tasty porridge as well as different varieties of bread flour, check out the fantastic range of breakfast products here: http://www.cotswold-fayre.co.uk

About Cotswold Fayre

Further information about Cotswold Fayre can be obtained from the website, the most comprehensive trade website for speciality food in the UK, and from Paul Hargreaves blog, Speciality Bites.  The product range is also available to the public via orders from the sister company Real Food Direct.

For further information on Cotswold Fayre, its products and services please contact MD Paul Hargreaves of Cotswold Fayre Ltd, Units 9-11, Manor Farm, Peppard Common, Henley-on-Thames, RG9 5LA.

Tel: +44 (0)8456 121201    Email: paul@cotswold-fayre.co.uk

Editors Notes:

•    Farmhouse Breakfast Week is organised by HGCA
•    *HGCA aims to improve the production and marketing of cereals. It provides market information, assists cereal product development, promotes exports and funds research and development. It is a division of the Agriculture and Horticulture Development Board (AHDB).
•    For more information about Farmhouse Breakfast week 2010 visit http://www.farmhousebreakfast.com

As a fine food distributor we are dedicated to maintaining the highest service levels. Because the problem is not getting any better, we have now created a new position of “Supply Chain Manager” – mainly to ensure our suppliers give us as good service as we are aiming to give our customers.  If independent retailers are to maintain the growth they have experienced over the last few years we must get more professional and slicker in our supply chains.

I would be interested to hear from retailers how much weeks like this affect your business. As a wholesaler I know we lost around 30-35% of turnover this week compared to what we would have done weather permitting. Clearly retailers also lose out, in some cases because they have to close, but do consumers come out and spend a bit more when they get out and about again as presumably they have a bit more in their pockets after being stuck at home for a few days? Let me know.

I would also be interested to hear how Christmas was for speciality food retailers this week. Our sales in the last quarter of 2009 were 20% up on the previous year’s figures, but, of course, we only know what has gone into the shops, not what goes through the tills. Generally though, through the places I have been since Christmas, there doesn’t seem to be masses of Christmas products on the 50% sales. Is this your experience?

The final few days before Christmas, again massively affected by the weather for us, were incredibly busy. Again we lost a whole day’s deliveries and had to send out 28 pallets one day just to clear some of the backlog. Customers were still ordering Christmas goods right up to 22nd December, which suggests to me considerably more optimism than 2008, when we had quite a lot of Christmas lines left in the warehouse at Christmas. This year there was virtually nothing! Great news for us!

Finally, an HR question! To pay or not to pay staff who don’t make it in on “snow days”. I take the view that we don’t pay those who don’t come in to work when it snows. To pay people anyway not only disincentivises staff to make the effort, but is a bit of a slap in the face for those who have braved hell and high water to get into work, albeit late. We give staff the opportunity to make up the time by working more hours when the weather is back to normal. Am I a harsh old sod or is this becoming general practice? I think the last couple of working weeks will move others to my position!

We heard last week that Rumwell Farm Shop, Taunton is the first shop in the UK to receive The Genuine Own And Local (GOAL) certificate from the Farmers’ Retail & Markets Association (FARMA).

The accreditation is awarded to shops selling their own farm produce, and was introduced to help consumers identify ‘real’ farm shops. Clearly this is a very worthwhile cause and certainly not an “own-goal” by FARMA. There are several imposter “farm shops” that have sprung up within the last year or so, even since it was announced that farm retail was the fastest growing retail sector in the UK at 17%. So there is most definitely a need to recognise the genuine farm shops based on a farm and selling their own produce, whether that be meat, fruit and veg or herbs.

However, is this scheme really worth spending money on? I would have thought that the average farm shop customer would have enough intelligence to recognise what is a genuine farm shop and what is not. Noticing tractors and animals when driving up to the farm shop are normally a bit of a giveaway, as are signs pointing to pick-your-own fields. Conversely a garden centre surrounded by roses, fushias and other herbaceous things for sale having a “farm shop” just before the checkout might be a clue that the products sold there aren’t grown or reared in the garden centre! Maybe we should credit our customers with a bit more intelligence. Those consumers without the intelligence to recognise a genuine farm shop are probably at home lying on the sofa, drinking Stella, eating their ready meal watching Eastenders, so probably don’t darken our doors anyway!

I understand FARMA wanting to protect its member’s interests and their motives are highly commendable. However, we ought not to be too harsh on those independent food halls that are springing up all over the UK. Okay, some of them are calling themselves farm shops, and this is probably ill-advised. Let’s say to them, call yourself a food hall, but as a supporter of farm shops, I would not want to discourage places like this from opening up. After all they are probably selling genuine produce from local farms (even though it might not be their own) and other gourmet food products that are of far higher quality than the products at the local supermarket. I, for one, would never want to knock an independent food shop that by its very nature would be educating consumers in their food choice simply by existing.

I am writing this a week before Christmas Eve – so the busiest week of the year for fine food retailers. You may be so busy that you might not have time to read this, but Happy and Prosperous Christmas to you anyway!

Anyway enough of that, I am back now. I have had the opportunity twice within the last two weeks to see just how low helping food businesses is on the government priority list. We all know ‘Food from Britain’ had its problems and wasted quite a lot of government money, but the UK desperately needs some kind of cohesive plan to encourage and help the UK’s food businesses export their products to Europe and beyond. There has never been a better time to export Britain’s food due to the low £ and the increased profile of British food throughout the world, but we simply are not able to make enough of this opportunity. At a food show I attended in Shanghai, there were big stands from Australia, New Zealand, France, Italy and many other places. The British stand totaled three companies – an embarrassing effort. I know the government has other issues on its plate at present, but one of the best ways of increasing the strength of our economy is through the balance of payments - please impress this upon your MP and lobby for funding for the food businesses of the UK.

The second type of lack of funding I have seen at first hand is in my new role as a director of the South-East Food Group Partnership. This is the umbrella organisation for the Southern counties regional food groups such as Hampshire Fare, Taste of Sussex etc… The funding is cut for 2010/11 financial year – most of these county organisations will survive this (except one), but for the following year there is a real danger that some more of these groups will disappear. For a new gourmet food producer just starting up, these organisations are a tremendous help and can help enormously in raising the profile of small food businesses. They also enable small producers to exhibit at trade shows without it costing a fortune. Clearly it will be detrimental to the food culture of the UK if the funding to these organisations is cut further.

Well, that is all for this week. Sorry to be a little depressing this week. Sorry about that, but do enjoy the next two and a half weeks. It looks like a very busy Christmas trading period for us all.

However, my blog this week is on the more general lessons we can learn from China, which is essentially a nation of entrepreneurs. Despite some of their business practices being either illegal or bordering on it, there are many within that growing economy that challenge our western small-mindedness:

• The Chinese are very open to taking risks. I think, possibly due to their history of traumatic cataclysmic events, the attitude is very much that “we have nothing to lose”, so let’s go for it. They back themselves to succeed and very often they do. If not they will pick themselves up and start again with no time for self-pity.

• They are great sales people. Anyone with any time to spare will get out on the streets and sell a “copy watch”. The guy who shouted “idiot” after I refused him perhaps hasn’t been to the latest sales training course, but he was certainly keen to do business!

• They are a nation of hard-workers. Most businesses seem to function six or seven days a week and the business owners put in a tremendous amount of hours – perhaps this is one that is not completely alien to many of us.

• Customer service and hospitality are high on the agenda. Yet again when travelling out of the west, I was struck at how customers are made to feel special in many places – and this isn’t in the hope of getting a tip. Tipping is not part of Chinese culture. Two examples of this. Firstly, the first hotel I stayed at in Hong Kong gave me two presents just for checking in! Secondly, in a restaurant in Shanghai when going to the loo, there was a guy who ran the water in the basin, squeezed the soap onto my hand and got the towels from the dispenser. (Fortunately he didn’t attempt to help me any earlier in the process!)

• Finally, they are very quick to see a new opportunity. They seem to be able to get on with a new venture incredibly quickly and grasp a new opportunity much quicker than most of us would. This is largely due to their short-term view of the future - a business plan of longer than six months would be slightly unusual for a start-up.

I have come back full of energy and inspired to go for expansion in my own business and start to take more calculated risks in 2010. Let us all open our eyes for opportunities in the run-up to Christmas and beyond.

Have a good week.