news By PATRICK MCGUIGAN Multiples Green organic and local signs

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 Multiples: Green ‘organic’ and ‘local’ signs are being replaced by red ‘price cuts

 Supermarkets switching
                                                                                                       Food groups: Staying ‘local’ won’t let businesses grow, says Sheaves

                                                                                                       Taste of the West to put
 from ‘local’ to ‘cheap’                                                                               quality message first
                                                                                                       By MICK WHITWORTH
 By PATRICK MCGUIGAN
                                                                                                       Regional food group Taste of the West is shifting its message from ‘buy local’
 Supermarkets have put local sourcing on the back burner after becoming embroiled in a price-          to ‘buy quality’ to help its producer-members grow their businesses to the
 cutting war sparked by the credit crunch.                                                             next level.
      A slow-down in consumer spending, combined with the growing popularity of discounters                Chief executive John Sheaves said consumers had been “side-tracked” by
 Lidl and Aldi, has prompted supermarkets to adopt aggressive price-cutting tactics and to             the message that they were only supporting their local community if they
 promote value lines at the expensive of more expensive ‘ethical’ ranges, such as regional food.       bought foods produced within a short drive of home.
      “The climate has changed and regional sourcing is definitely on the back burner,” said Nick          “If you support the ‘buy local’ message and you’re a purist, you are only
 Gladding, retail analyst at research company Verdict. “Consumers are trading down and the             ever going to buy products from within a 15 mile radius, in which case you
 supermarkets are responding.”                                                                         are not supporting the development of business across your region,” he said.
      Natalie Berg, a retail analyst at Planet Retail added: “Supermarkets are replacing their green       Sheaves said Taste of the West’s primary function was to support the
 signs highlighting organic and regional foods with red ones promoting value lines.                    economic development of companies in its territory, which stretches from
      “A few months ago prime shelf space was dedicated to regional products, now this is being        Wiltshire to Cornwall, and the ‘buy local’ message limited opportunities to
 used to promote price cuts. The change in focus is likely to have a direct impact on sales of         sell to other parts of the country.
 ethical products.”                                                                                        “We need these companies to develop and grow,” he said. “We need them
      She added that the supermarkets’ increased focus on price promotions, paid for by their          to get into the London market, for example, And that’s not about ‘local’ - it’s
 suppliers, could spell trouble for small producers: “Promotions are harder on small suppliers         about quality product.”
 because they don’t have the economies of scale of large manufacturers.”                                    “We have our own quality accreditation scheme
      Asda was due to open three local sourcing hubs last month, in Luton, Hampshire and the           – our Taste of the West Awards – and we are going
 North West, but a spokesperson told Artisan that only two were now planned and these would            to be beefing up the quality message. ‘Buy local’
 now open later in the year.                                                                           is part of that, but everyone knows that just
      “This is not due to any change in focus. Locally sourced foods fit with Asda’s every day low     because it’s local doesn’t mean it’s better.”
 pricing policy and we remain fully committed to local sourcing,” she said.                                Sheaves acknowledged that very small,
      Asda announced over 5,000 price cuts in September, cutting the price of every food product       micro-businesses need a “a different level of
 in its Smart Price value range, while Tesco responded to the threat of Aldi and Lidl by launching     support” – ‘safe-and legal’ hygiene training,
 a 350-strong range of ‘discounter’ products – a move that it claims makes it the country’s            labelling advice, etc – which could be
 biggest discounter.                                                                                   delivered by local or county-level groups such
                                                                                                       as Somerset Food Links and Dorset’s Chalk &
                                                                                                       Cheese.
                                                                                                           “These businesses need support and advice
                                                                                                       to grow in a market that is broadly local,” he
                                                                                                       said. “But some will need to develop into regional
                                                                                                       suppliers, and some of them, narrowing it even
                                                                                                       further, will want to promote on a national
                                                                                                       or even international stage. They are the
                                                                                                       people we will be taking to shows like
                                                                                                       IFE09 or the Speciality & Fine Food
                                                                                                       Fair, and we will support them
                                                                                     Tesco is          in different ways to the people
                                                                                     going head        that just want to reach the               John Sheaves: Consumers have been
                                                                                     to head with      local market.”                       ‘side-tracked’ by the local foods message
                                                                                     discounters



    Sussex producers pay price of the slow-down                                                        New service helps smaller
    Two of Sussex’s best-known small producers have gone out of business within a few weeks of
    each other.
                                                                                                       producers get ‘retail ready’
        Bexhill-based Battle Bakehouse, which won a listing with Sainsbury’s under the Supply          Consultancy group Bodycote LawLabs has launched a technical support programme
    Something New scheme, went into voluntary liquidation at the end of August following               for small food and drink producers who want to supply the supermarkets.
    cashflow difficulties, while Shoreham-based chutneys and sauces company Woody’s                        The modular Retail Ready programme has been designed to help producers
    Homemade has also ceased trading.                                                                  meet supermarket requirements in areas such as labelling, production control and
        Battle Bakehouse founder Kate Kent told Artisan that cashflow dried up after a major           ingredient composition.
    distributor suddenly changed its payment terms. Receivers were called in at the end of August          Food companies can pick and choose from the various modules, depending on
    after attempts failed to secure funding from the bank or an outside investor.                      their requirements. Bodycote LawLabs can also provide technical assistance to help
        “Sainsbury’s has been very supportive and is keen to re-stock our products, if we can get      suppliers meet ‘safe and legal’ requirements and advise on scaling up production.
    back on our feet. Hopefully, we can find someone to invest in the business,” said Kent.                “We are aware of the problems small producers face when supplying the
        Woody’s owner Peter Wood blamed the economic climate, a slim order book and the closure        supermarkets and know that they can seem daunting,” said advisory team leader
    of several retail customers. “Sussex and the City – one of our biggest customers – closed          Fiona Scholes. “Under local sourcing schemes retailers will advise producers of
    recently and others were reducing their orders because of the slow-down. Farmers’ markets          their requirements, but smaller manufacturers often aren’t sure how to go about
    aren’t what they were either,” said Wood. “We came to a point where we needed more jars and        meeting them.”
    ingredients, but it just wasn’t worth spending the money. It’s been hard work for not much             As part of the programme, Bodycote LawLabs will verify recipes to make sure
    money – I could probably have earned more working at McDonalds.”                                   that they are legal and meet retailer requirements on issues such as food additives.
        Battle Bakehouse, which employed four staff, won a contract to supply 60 Sainsbury’s stores    The specification module helps producers with the NPD process, providing a generic
    with chocolate and beetroot, carrot and sugar-free fruit cakes in August 2007. It also supplied    specification template and completion guidance notes, while the labelling module
    Waitrose and independent retailers.                                                                ensures packaging copy meets legal and retailer requirements.
        Woody’s was set up in 2005 and supplied Budgens and Asda. At its peak the company                  Membership with Bodycote starts at £500 and this would cover most small
    turned over £250,000 with four staff.                                                              producers’ requirements regarding labels and specifications. Site visits and auditing
                                                                                                       cost extra.

4      artisan · November-December 2008