The real question for the UK is whether Brexit means shrinking back to the British Isles, maintaining the status quo with Europe as much as possible or an opening to the non-European world. The European Union accounts for about 10 percent of the world’s population; surely there must be opportunities to reach out to the other 90 percent! And what Trump wrote about when he was talking about leverage reminds us of the secret to trade negotiations with Europe – the more the UK opens to the rest of the world, the more pressure Europe will feel to cut a deal.
It is doubtful Henry Ford ever really said that if he enquired, people would say they wanted faster horses, but it doesn’t matter. The idea expressed is an argument for audacious innovation, a rebellion against cautious incrementalism, and this is what brings us to Amsterdam today. It is what underlies The Amsterdam Produce Show and Conference.
The Perishable Pundit Jim Prevor believes that the pressure on executives at a shareholder driven organization such as Tesco to chase a quick buck gives family-owned discount chains a big advantage
I had assessed the run up to the vote in a piece for Produce Business UK titled, Considering the UK’s Referendum on the EU from an American Perspective. Afterwards, I have to confess that, even though almost all the business people I know in Britain tell me they voted to remain, I do think that the vote outcome offered one very important point for optimism: It reaffirmed the British character.
Jim Prevor, the Perishable Pundit gives his unique take on the great Brexit : Bremain debate looking back at history and forward to the implications for the UK’s relationship with the US, the fresh produce trade and beyond
There is an assortment of varied names – and numbers – across the globe. There are many different kinds of programmes, some under public management, as in the UK, and some under private management, as in the US. What all these programmes share, though, is a lack of evidence that they have caused produce consumption to increase.
There have been two recent announcements… one represents an immediate shift of the American position in the market from a private equity owner to an operating company, while the other is a flare across the British landscape reminding the industry of the potential of another American interloper. The announcements, of course, are that Sysco has agreed to acquire Brakes and that Amazon has agreed to distribute certain products supplied by Morrisons.
There is a new investigative report by the UK’s Groceries Code Adjudicator out on Tesco. The many investigations of Tesco remind me of an Internal Revenue Service (IRS) investigation that took place many years ago on the Hunts Point Market, New York’s main produce market, when this columnist was just a boy. The IRS had got wind that there was a lot of cash business done on the market and that owners were pocketing cash and not paying their taxes. In reality, they were 100% correct about the cash sales and unreported income. The problem was that they didn’t know enough about the business to know how to effectively investigate and who to investigate.
As we move into the New Year, the challenge remains the same: How do we position ourselves and our organisations for success in 2016 and beyond? One answer is to understand more accurately the changes we see in our industry.
It is hard to count the number of growing and packing operations around the world that we have visited, but it is many hundreds. So when this columnist watched the C4 News report, he was outraged – not at the alleged working conditions but at the so-called journalists who violated so many of the rules in the book.
Produce Business UK is a youthful publication. In a few months, PBUK will mark its first birthday when we hit Fruit Logistica 2016. This publication grew, however, out of something older. In fact, this month marks the 30th anniversary of the founding of Produce Business in the US. The first issue was unveiled at the Produce Marketing Association’s (PMA) Fresh Summit convention in San Francisco. Yet the roots of this publication go even deeper than that.
The thought is that Amazon Fresh will reach the UK sooner rather than later. Amazon has leased an old Tesco warehouse and has, in general, been building up its logistics capabilities in the UK and, especially, in London. This is a matter of great concern to UK retail executives, and it should be. And not just for the obvious reason.
Transparency. It has become a truism at retail that what retailers should want is perfect transparency down their supply chain. The reasoning is obvious: vendors would like to make money, and if a retailer knows exactly what the vendor’s costs are, it can make sure the vendor keeps its profits in line and these low vendor margins can keep down the price the retailer pays. With mainstream retailers flummoxed by the growth of deep discounters, this focus on a transparent supply chain is seen as a necessary tool to keep costs low. Yet there is real reason to believe this approach is misguided.
Ian Craig, CEO of Fresca Group, was interviewed for a PRODUCE BUSINESS UK piece titled, Fresca calls for support to bolster squeezed produce middle ground, and in the piece he pointed out that although there was strong demand in many sectors such as upscale and convenience, sustaining the great middle market was becoming increasingly problematic. Why? Consumer quality expectations are high, while the pressure on pricing is acute. Indeed the phenomenon of the “shrinking middle” - in which what was once seen as the mainstream heart of the industry is under siege - is now global.
This month, the 2nd edition of The London Produce Show & Conference takes its bow. Many of the most progressive firms in the industry have seized the opportunity to utilise the event for their own marketing purposes. Others have engaged because they want to support our efforts to combine the iconic appeal of London, which has simply become a magnet for people of intellect, ability and enterprise from all over the world, with our unrivalled access to the best and brightest minds in the produce sphere, to create a unique event, combining education, networking and commerce. Yet, it is also sad to see that some who could gain value from the event, choose not to.
All the top produce companies in the UK now have operations in Spain or the Netherlands or eastern Europe. Some say an independent UK could negotiate access to the market as have Switzerland and Sweden, but this seems a great challenge as the remaining countries would be anxious to prove that leaving is deleterious and so would resist negotiating favourable terms for quite a while. Even if negotiations succeed, they may require all the things – such as open immigration – that people do not like about the EU. As an American, I have mixed feelings.
Our opinion piece, Tesco must go ‘cold-turkey’ to overcome crack-cocaine-like addiction to supplier cash, has brought many responses, including this thoughtful letter from Richard Kochersperger. Richard weighs in not to disagree but to point out the hopelessness of urging retailers to take a hard road when an easy one is available. We don’t disagree.
Tesco has announced a restructuring of supplier relations, with plans over the next two years to reduce supplier incentive payments, such as slotting fees, promotional fees, etc., from 24 types to just three. That may simplify the process, but it won’t solve the problem, which is that Tesco and many retailers are hooked on supplier cash and need to bite the bullet of a few horrible quarters as they switch to a more sustainable business model.
If we could ban one phrase from the lexicon of retailers, it would be “price investment”. Retailers use this phrase in the context of competing with the growing discount segment. Since the discounters won’t be ending their discount strategy anytime soon, “price investment” is not an “investment” at all; it is just an acknowledgement that the competitive environment has changed and that, permanently, prices must be kept at lower levels. Unless expenses also drop, it means that profits will also be squeezed.
I am, once again, preparing to board another plane -– this one to the United Kingdom (UK) and then on to Fruit Logistica in Berlin, Germany, – to celebrate the launch of PRODUCE BUSINESS UK, a digital publication designed to offer the industry a new perspective on the conversation, innovation, insight and analysis that paves the way for industry improvement. Building on the launch last year of The London Produce Show and Conference, this new publication grows in rich soil.