Chris Elliott is a Professor and Pro-VC at Queens University Belfast. He’s also the founder of the Institute for Global Food Security, and led the Government’s Elliott Review into the integrity and assurance of the food network after the horsemeat scandal. Continue reading
There is the need to challenge the mindset of farmers. They are into the cyclical processes. The better farmers challenge themselves to improve.
This is partly about consolidation – farmer will see greater and greater consolidation, as better ones swallow up those who don’t change.
Farmer has got to think about longer horizons – like water, there’s more that the industry needs to do save water. But farmers operate on short horizons – and it’s about forcing them to think in the longer term.
Farmers want a secure outlet for their raw material – more than 5 years but 10 to 12, to 15. We hear from another participant, who says they don’t deal with farmers, going instead to the open market.
We hear that the biggest issue is that farmers’ children don’t want to go back and work on the farm. There needs to be the opportunity for people to train at agricultural colleges. These institutions though are falling away. (This is partly about perception.)
Education and sustainability in farming
One suggestion is an apprenticeship scheme but agreement there needs to be new routes for young people to get into farming. This is also about the collapse of technical qualifications – with the change to university education.
Risk from Brexit
One risk in the 3-5 year horizon is from Brexit. This includes a concern over food standards and regulations and therefore food safety. One participant mentions that this might lead to a collapse in consumer confidence, which could be significant for the business – potentially prompted by the removal of standards from the EU and concern over practices used elsewhere, such as chlorinated chicken.
But one participant says this could be an opportunity: We are focusing on our standards, making sure they are recognised as the highest possible – we see it as a massive opportunity rather than a risk. It will allow us to demonstrate how good we are, and take advantage of that.
A changing market
We hear that taking advantage of opportunities is vital and much of this is about having a strong balance sheet – to drive forward and innovate.
We hear that if businesses do struggle, as a result of the change that too can be an opportunity for others: We are not actively looking – one participant says – but if some businesses are struggling we will look to consolidate and you can quickly take advantage and build a stronger business from that.
We hear that a number of businesses are up for sale. And that there are already significant changes happening to the market.
There is a concern that this is consolidation can be difficult for innovation, but again other participants think this is arguable. Some see it as quite a good driver for innovation, because larger businesses can take risks and invest, thanks to consolidation.
Parveen will speak about 3 areas:
- Consumer trends,
- Food security and supplier base.
Parveen Mehta of Minor Weir & Willis is now speaking to us. He joined in 81, graduating with a physics degree.
At the time, it specialised in importing fresh produce for the AfriCaribbean community. At that time, there were seven employees.
They are now a 300 million pound business – involved in growing around the world, specialising in the servicing the food retail sector. He says business margins are between 0-2per cent. “You have to do a lot of running to get to where you are.”
The changing business
Following the recession, there have been big changes – these are now being accelerated by Brexit. This includes consolidation in the business, which is now happening at a faster rate. It’s forcing businesses to strip costs out of the supply chain and allowed new entrants in the market – such as Aldi and Lidl “Until two or three years ago they were not on the horizon. They are appealing to demographics and will carry on growing.”
With lower cost supply chains and more sensitivity to the market they are making significant inroads to the traditional retailers market share.
The impacts of consolidation in the business include:
- There are also significant skill shortages in the business
- Fewer, larger and leaner relationships with our partners. If you are to survive you have to add value, he says.
- Survivors in this market will have strong balance sheets – because risks are being passed down the supply chain.
- Shorter supply chains: unless you add value you’re going to be driven out.
- It will also drive innovation.
- Going to create new markets.
- We are also becoming a grower, he says. “The business is capital intensive. And has its risks.”
- You’re going to see whole-grow deals. Once we only built size-12 mangoes. Now, increasingly we’ll be buying the whole of the crop.
Parveen will talk briefly about Brexit and what it will do to the business.
Over night there has been a 10 per cent change in costs – which was a shock. Lookng forward it will be difficult, particularly labour.
“Even this week I’m losing people, because the exchange rate doesn’t work for them.”
Finally, sustainability: we are competing for the same resources as other parts of the world, which creates competition.
We are also concerned by political risks – such as food terrorism. “If you want to survive you have to reinvent yourself.”
Tonight’s event is to horizon scan Birmingham’s food future – the first of a series of events. It will look at the future challenges, risks and opportunities that exist around Birmingham’s food and drink sector.
What’s happening tonight?
We’ll be discussing three horizon timeframes, with input from three speakers:
- 3-5 years: 2021-2024 – with Parveen Mehta, Operations Director of Minor, Weir and Willis, introducing this timeframe.
- 6-12 years: 2024-2030 – with Dr Helen Ferrier, head of policy at the National Farmers’ Union. For background read this blog post, ‘To 2030: Shaping the Future of Global Food Systems‘
- And 2030-2050, with input from Chris Elliott,Prof of Food Safety, founder of the Institute for Global Food Security. For background read this blog post on ‘To 2050: City Deals’. And this post, ‘To 2050: Climate Change agreement’.
These horizon mapping timeframes each have a board – where ideas (on post it notes) will go. Participants in tonight’s event will also be able to write on paper table cloths – and tonight’s conversations will be recorded.
We’ll be covering the speeches and the discussions on the blog and publishing posts on specific conversations and themes throughout the evening.
How to keep track of the Birmingham Food Futures event
You can follow everything here on the blog – and with tweets on #foodfutures – and on our Twitter account @bhamfoodcouncil.