The crisis facing fruit growers was again pulled into sharp focus with the announcement of the closure of Bardsley Farms. We know from the recent reports from British Apples and Pears that prices achieved by the sector are insufficient to make any meaningful impact on the cost inflation experienced over the past two years. One industry leader this week stated that the average grower has seen a margin erosion of 133%, something that is seeing average orchards being grubbed. How often have we heard a top fruit grower from the South East state that they won’t be planting more orchards, that they are moving into viticulture instead?
On 1 April the national minimum wage will rise by 9.8%, which, while it is needed for almost 20% of households across the country (and 25% in London) will seriously further impact on meagre margins for growers. Top fruit costs, on average, have gone up by over 30% and sadly costs recovered from most retailers are low single digit.
Camellia said in its announcement about Bardsley: “While consumers had experienced significant food inflation, key retail customers have continued to resist any meaningful selling price increases.” According to Bardsley’s last two Companies House filings, it posted two years of big losses – £2.8m 2022/23 and £1.7m for the nine months ending 31 December 2021. These are losses that are clearly game ending and, in the light of insufficient margin forecasts for the year ahead, it’s not hard to see how they came to their decision.
Another conversation I was involved in this week was around training levels in our industry. When a buyer joins a department in a major retailer, there is an intensive training course on negotiation skills, then comes the in-depth knowledge of the Groceries Supply Code of Practice GSCOP, trading law, trading standards and a wealth of skills that position them well at the table. Do we do the same for our teams?
In the past I have written about the development of overseas markets for British fruit; key, red apple varieties that translate to other markets, reducing the dependence on the British market place. Come on everyone, there are a few exporters making a great job of it. Perhaps you need to give your marketing desk a prod, send fruit abroad and spread your risk.
We still have prices being driven down. Food is cheap, has to be cheap and therefore is seen as without value. Retailers are still competing to price match with the discounter, but from profits being posted, there isn’t a reduction in the return to their shareholders.
We have a rising health crisis. Aside from the 800,000 admitted to hospital in the past year suffering from malnutrition (a large proportion suffering from rickets, which an apple or two would have prevented) we have the 64% of the British population who are overweight or living with obesity.
We have a society which sees that healthy fruit and veg is worthless in financial terms and therefore they are seen as worthless in nutritional terms.
Just think of the £2billion value of the weight loss and diet sector of the UK, all the meal systems, supplements, books, apps and wafer thin gurus. Could we just have a meaningful fruit and veg guru who encapsulates all this for the 80% that can afford a healthy diet but don’t get the message?
There are number of reports linking obesity to education levels. From recent experience this isn’t about education but about income and where you live. The poorer the area, the less likely you are to live near somewhere that sells fruit and veg, and nor are you living somewhere that makes it easy to cook and prepare them. Health is a poverty issue. It’s about income, location, job opportunities, aspiration and then some education.
Emily Norton, speaking at the National Fruit Show AGM last year, urged growers to say “no” and suggested top fruit growers needed to work together, build a broader variety of marketplaces, spread their risk and get trained so they could be strong in the face of well-trained negotiators doing their job and doing it well.
As a sector we are challenged by our market place, but we do really need to gear up, train our teams and work together.