The benefits of shorter supply chains and different management models were scrutinised at the Oxford Farming Conference.
Laurence Olins, chairman of Poupart Ltd and a fruit producer and distributor with 45 years of experience in fresh produce, said that fewer physical processes meant better news for growers.
He said that much progress had been seen to that end, from picking and packing on mobile rigs and packing direct into retailer punnets, to supplying ‘hub’ distribution centres.
“All these initiatives have driven down costs and reduced the number of times a highly perishable item is handled, giving it a longer shelf life and higher quality product,” said Mr Olins.
“Most require collaboration from the retailer and an equitable sharing of those benefits, but, on balance, the more direct the physical supply chain the more to the grower’s advantage.
Where things became more complicated is in the management of those chains, he said, an area of attention from the ‘big four’ supermarkets as they face up to pressures from both top-end outlets and the discounters. And here the removal of extra links in terms of management could cause growers problems.
Farmers have found services which used to be the preserve of the supermarkets, from market analysis to straight up marketing and delivery pushed back down the chain, suggested the speaker.
“This sort of technical support is now an expected service for a supplier,” he said.
“There are costs, and some will inevitably fall on the producer.”
Interestingly, to avoid picking up management expectations, the discounters and top-end producers were often more attractive as they have tended to “stick loyally to their longer supply chains”, said Mr Olins.
“The real challenge is whether various forms of supply chain management are benefiting farmers.”
“In order to make a more direct relationship work with large retailers, producers must often be willing to show more involvement in the management side.
“If they have the appetite they should be able to make it work and benefit. If they think that the farm is what they are good at then there is a choice to be made.
“Farmers cannot choose the supply chain management style of a major retailer, but they can choose the major retailer they supply.”
