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08Sep

Professor John Moverley writes...

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CHALLENGES & OPPORTUNITIES IN THE FOOD SECTOR

Redfox works closely with a select number of associate partners and high level contacts who we ask to regularly write for the benefit of the sectors.

Over the economic recession, food has remained relatively resilient and indeed there has continued to be growth in the supermarket sector. This is something that cannot be said for many other areas of the economy,  albeit much of the growth reported was linked to increases in non food sales and inflation in food prices. However, there is increasing evidence that the situation is tightening. Recent supermarket results have showed significant falls in sales growth for food purchases. Food inflation has fallen. The closer inflation gets to zero, the more that retailers must steal share from each other to increase sales.

Recent times have emphasised that customers continue to seek ever increasing levels of value in their purchases especially for staple items. This prompted a cascade effect early on in the recession prompting all supermarkets to introduce their own brand of value lines. At the same time, they have shown ever increasing interest in provenance, and there are clear signs of many seeking to balance some of their thrift in regular purchases by seeking ever more quality in purchases such as meat etc.  Overall there has been a dramatic change and with continued uncertainty on employment and ever tightening finances and the potential impact of government cuts, there is real caution in consumer spending. . As a senior member of a supermarket chain said to me recently, ‘‘The savvy shopper is now very much a feature of the high street and it is impacting on how all of us respond’’.

In dealing with the very difficult economic decisions, there are dangers of ignoring the issue of food security. Whilst food supply to UK markets remains reasonably plentiful, globally there are considerable challenges. As they say, they don’t make land anymore and yet populations continue to increase. In the past the gap has been made up by greater yields and productivity. Whilst such advances will continue, there are different factors impacting now. We are using land for other uses, namely the production of energy crops to provide alternative energy sources. Water is increasingly becoming a major limiting factor to agriculture. We are also seeing greater restrictions in cultural practice and then there is that factor of global climate change. We can argue about the merits of genetic modification (GM) but whilst Europe continues to limit its application, we must be aware of a further barrier we present to food producers in driving up productivity.

Already over one billion people globally do not have adequate access to safe and nutritious food. The world faces a potentially even greater crisis in food security as expected global population growth to over 9 billion is coupled with increasing affluence and urbanisation in rapidly developing countries. To meet this, the FAO forecasts that world food production will need to increase by 40% in the next 20 years and 70% by 2050.  Professor John Beddington, the Government’s Chief Scientific Advisor, recently said: “. There is the potential for a full food security crisis in the future. The growing global population combined with changing consumption patterns and increased urbanisation, set against the backdrop of a changing climate, means we cannot continue with ‘business as usual’.

All this can sound really depressing and yet there is so much happening in our food sector to cheer and celebrate. However, there are real signs that the going is to get ever tougher in all parts of the food chain. The right approach to deciding upon strategy and implementation plans is crucial for all organisations in the food sector. Interesting times we live in indeed.

JOHN MOVERLEY

SENIOR CONSULTANT AT AZURANCE

Azurance is a management consultancy business specialising in the food, regional food and agri-food sectors

www.azurance.co.uk

Category: Blog Posts1 Comment Email to a friend

Hello John, thank you for producing a well written and thought out article.

I absolutely agree that the shopper is becoming increasingly more savvy about the way they shop. I believe that Provenance will play an increasing role in the shopping baskets and habits of the consumer. But also that consumers will start to question even more the activities within the food particularly the fresh food supply chain - and will examine more closely the waste issue with a view to reducing the amount thrown away.

I also believe that a re-examination of exactly what "value" means in the purchasing deicsion is needed in order elevate food (and other products) into a precious product as opposed to a disposable one.

I believe that as food security becomes a more pressing issue then we, as an industry, have to respond in building and developing working relationships in a more cohesive way, for example cross-production sharing of knowledge from Organic to Conventional via GM, maybe. I have myself written a small blog article about this very issue ( http://www.growingdirect.org/blog/ ).

I look forward to seeing more articles from yourself and the other contributors.

Kind regards,
Carol Ford
Growing Direct Ltd
Posted by Carol Ford on Wednesday the 8 of September, 2010 at 12:16pm

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1 comment for "Professor John Moverley writes..."

  1. Hello John, thank you for producing a well written and thought out article.

    I absolutely agree that the shopper is becoming increasingly more savvy about the way they shop. I believe that Provenance will play an increasing role in the shopping baskets and habits of the consumer. But also that consumers will start to question even more the activities within the food particularly the fresh food supply chain - and will examine more closely the waste issue with a view to reducing the amount thrown away.

    I also believe that a re-examination of exactly what "value" means in the purchasing deicsion is needed in order elevate food (and other products) into a precious product as opposed to a disposable one.

    I believe that as food security becomes a more pressing issue then we, as an industry, have to respond in building and developing working relationships in a more cohesive way, for example cross-production sharing of knowledge from Organic to Conventional via GM, maybe. I have myself written a small blog article about this very issue ( http://www.growingdirect.org/blog/ ).

    I look forward to seeing more articles from yourself and the other contributors.

    Kind regards,
    Carol Ford
    Growing Direct Ltd

    Posted by Carol Ford on September 08th 2010 @ 12:16pm

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