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Why our food industry must adapt to survive and grow

Cornwall is blessed with many of the world’s leading food experiences which along with our stunning natural landscape has created a strong association for the quality of our food and drink. Many associate our food with traditional values, family businesses and the benefits of outdoor life. This has created a premium Cornish brand, evidenced by several protected designations to safeguard the spirit or process of our heritage foods.

But we are seeing many of our larger food businesses struggle and in some cases close, with the loss of over 1,000 jobs in the last 12 months across our savoury pastry, desserts, meat and dairy sectors. We know that farm incomes are lower than the national average, some critically low, with major uncertainty facing the industry with Brexit and the Agriculture Bill.

We have a strong community of small and artisan food producers of which we should be extremely proud. But we should also recognise that they are not a unique nor particularly competitive sector of our economy. Most areas of the country enjoy a similar or often greater depth and breadth of artisan producers, who are evidenced at farmers markets, local produce fairs or on the shelves of premium food retailers across the UK.

While it is right that we promote and herald our food industry, I believe we need to take a fresh look at how we help more of our smaller businesses grow, both nationally and internationally. It is unlikely we will see any of the larger UK or international food businesses relocate their production to Cornwall, nor invest significantly into additional capacity, Saputo’s Davidstow expansion aside.

The reason is Cornwall remains remote from all of the major national markets. In the age of cheap food, distribution costs of relatively low value foods, let alone the import of raw materials, can add costs often equivalent or more than the average net profit expected from that particular market. So we have to be so much more efficient, or demand a higher price to be on a level playing field with many of our UK competitors.

Growing your business profitably outside the county requires a depth of consumer, customer and logistical understanding that is generally not needed nor understood if your traditional market has been local or seasonally based. We need to focus future training needs at addressing these leadership skills if we are to unlock growth. Exporting can be the icing on the cake but is rarely the cake itself, too often with small volumes, inconsistent order patterns and heavy time demands on management.

Increasingly, our food businesses will need to adopt new thinking to retain, train, retrain and motivate staff. The days of relying on imported labour or of finding the right agency staff are gone. The availability of staff, especially skilled staff, has been a key reason why businesses have not invested in Cornwall and that is unlikely to change in the near term.

So we need to open employees’ attitudes and confidence to training, identify funding and enable new models of delivery. Much is being done in this regard with some excellent case studies to learn from in our care and health sectors, but much more needs to be delivered.

This should become a higher priority for available cash than the replacement of key assets for most of our businesses. The principles of lean manufacturing, key engineering and processor skills and of food safety and compliance need to be more fully embedded in more of our workforce. In addition to the depth of commercial skills needed to unlock national and international growth, profitably. 

We also need to work more collaboratively as an industry to remove costs that add no value. Shipping empty space to and from the county is extremely expensive. In some instances the cost of delivery can be more than the value of the sale. Why do we all have our own finance, sales processing, telesales, payroll and accounting teams? Could we share key skills? Recruit collectively? Could we share apprenticeships? Savings in these areas could quickly offset the extra costs of doing business in our part of the country.

We are as a local economy quickly moving away from a grant culture in our ambition to grow and become a net contributor to the UK. This I think will be extremely valuable to our growing food producers, forcing us all to look critically at the robustness of business plans, the team and skills to deliver them, and the right finance model to support growth in the era of cheap food and political and economic uncertainty.

Mark Duddridge is Chair of the Cornwall and Isles of Scilly Local Enterprise Partnership and a former director of Samworth Brothers and Rodda’s

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Cornwall and Isles of Scilly Local Enterprise Partnership, PO Box 723, Pydar House, Pydar Street, Truro, TR1 1XU
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