Investment is essential to grasp post-Brexit opportunities

Britain's food and farming sector has global opportunities in the wake of the EU referendum but must invest to capitalise on these, Sainsbury's head of brand Judith Batchelar told the retailer's farming conference last month.

Batchelar: invest in innovation, technology and skills - image: HW
Batchelar: invest in innovation, technology and skills - image: HW

Batchelar, who also co-chairs the Government's leadership council implementing the Agri-Tech Strategy, said: "Britain is a trusted brand, associated with quality and safety, so has an advantage. We have to invest in innovation, technology and skills to exploit this. We already have a world-class science and research base, we are world leaders at things like precision agriculture, and we have one of the best supply chains."

Global trade in food and drink has tripled over the past ten years, she added. "With Brexit, we could play a role in a much more dynamic global food system."

But she warned: "We can't make the most of that if output stays the same. In labour productivity we are behind the USA, Germany and the Netherlands, and while we have grown exports, our imports have grown more. You can drive profitable agriculture businesses without subsidies. We need to be best placed for that with data, technology and innovation. But we want a fair share of the spending on industrial strategies."

On the Government's apprenticeship levy, due to come into force in April 2017, she said: "There is a lot of work to be done on this. Our sector doesn't have many apprenticeship plans in place, though we have been working to address this." The company expects to pay £12m into the levy but to get back £11.4m to train its own workers, she added.

Sainsbury's head of agriculture Sue Lockhart said the retailer and its suppliers need to be alert for opportunities to recruit and upskill staff. "We need to be competitive inside and outside the UK - in our own team, our farmer and grower groups, getting new young people into the industry, especially those not born into it," she said.

The supermarket's own horticultural apprenticeship scheme "has been a success, with seven out of eight remaining with their employers", compared with four out of eight on its "more challenging" livestock scheme, and now has a partnership with Reaseheath College to deliver these, said Lockhart.

Meanwhile, its Farming Scholars programme has so far focused on soil health and management. One of the seven growers on the scheme, Greg Colebrook of Green's Farming in Cambridgeshire, said: "A lot of good practice doesn't lend itself to beetroot growing. How to control fen blow from seed beds? Fleece? Seed technology to suit a less fine tilth? Different companion crops? The last two years have taught me that one size doesn't fit all, and that resilient soil is vital to overcome the challenges of the weather."

Fellow farming scholar and Kettle Produce field and procurement director Pearson Whyte said: "Soil is a process that needs to be preserved and enhanced. There is no magic formula to soil health, just a mix of techniques suited to soil type, organic matter, land ownership and the weather."

Kettle grows 1,500ha of carrots from the south coast to Aberdeenshire, "meeting the majority of Sainsbury's requirements", he said, which entails some strawing of the crop to maintain year-round supply. Whether this could be incorporated into the mostly sandy soils involved, and what can be done to minimise compaction, are ongoing topics, he said. Lockhart said the theme of the next round of scholarships will be new farm technology.

Shift from promotions

Sainsbury's commercial director for food Paul Mills-Hicks explained recent changes in strategy at Britain's second largest retailer, including a move away from selling on promotion, which now accounts for less than 25 per cent of its sales, and the abandonment of "Brand Match".

"Mike (Coupe) and I have tried to persuade suppliers that promotions are a bad thing," he pointed out. "We don't want boom and bust - more forecastable means more efficient. It's also about keeping the store experience simple. You get more people through the door by being the easiest and most convenient. Promotions do nothing for our market share."

Since implementing this "we have pulled away from the pack, with transactions and volumes up", he said, "though we are still losing sales to both Waitrose and Marks & Spencer at one end, and Aldi and Lidl at the other - retailers who are also distinctive in what they offer".

Sainsbury's also aims to work more directly and therefore efficiently in the supply chain, Mills-Hicks added. "Anything that takes away from profit is 'waste', yet some products move location five times before being sold."

Chief executive Mike Coupe said the rise of the discount retailers "is slowing down and we are heading for a different but stable equilibrium". With online now accounting for 15 per cent of sales and growth continuing at eight per cent, Sainsbury's has opened a "dark store" for London order fulfilment, allowing it to offer "one-hour delivery slots, including by bike", he said.

"Household waste has risen up the agenda and we have set out to help them - for example, with our 'Waste less, Save more' initiative, but there is still a lot we could do. We have seen waste in our own business fall by nine per cent in the last year and are working with suppliers preand post-harvest. It's not just about being philanthropic. There is a commercial incentive." He added: "British sourcing remains a top priority for us."

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