By Pascal Simian, Director of Berry Alliance
The supermarket price war is one of the biggest challenges facing the fresh produce sector right now. With the price of fresh fruit plummeting on supermarket shelves, retailers are under pressure to protect their margins. To this end, there’s a growing trend for retailers to cut out the middleman—in this case the importer—and buy direct from growers. But what might seem like a cheap solution can be laborious, wasteful and, as a result, costly.
With a combined 40 years in the sector, there’s not a single challenge my colleague Steve Sadler and I haven’t seen, at both ends of the supply chain. I’ve been importing berries for Wellpak for over 20 years, and I’m delighted that Steve’s joined me from a six year stint as Senior Berry Buyer at IPL, ASDA’s sourcing and procurement arm. Together, we understand the efforts growers go to gain access to the UK market as well as the pressure that retailers are under to keep costs down.
Fresh produce is a fast moving market and it takes agility to keep pace. Watching retailers struggling to source direct from growers and knowing we had the knowledge, relationships and experience to provide a solution, it was instinctive for us to embrace the change.
After 18 months of careful research and refinement, we’ve honed a solution that’s mutually beneficial to all parties—Berry Alliance, a not for profit (NFP) company that supports growers throughout the world to supply direct to UK retailers, and for retailers to deal direct with growers.
Unlike an importer, the contract to supply is between the grower and the retailer, not with Berry Alliance. As an NFP, Berry Alliance can’t make a profit. It does not own the fruit and all supply chain savings, which are significant, are passed on as better prices to the retailer and enhanced returns to the grower. The model is entirely transparent, with the progress of orders and every penny in the process accessible to both parties, at all times.
Consultation was crucial in building Berry Alliance. We’ve learnt that, aside from the time it takes to develop relationships with growers, retailers’ biggest problem is importing. It takes time to ship fruit—anything from a few days to five weeks depending on the type, transit and origin—so retailers that buy direct from growers can’t respond fast to consumer demand. If sales are down, they can’t order less or return it. Anything surplus to demand or poor quality is wasted, as are the opportunities to source and sell more when sales are up. Buying direct can be an uneconomical exercise in which the retailer takes the financial hit.
Berry Alliance solves this problem by working with stock holdings in the UK that are based on retailers’ forecasts. If these change, it has multiple options to source additional produce and multiple outlets through which to sell surplus, so there’s no financial loss to the retailer be it through missed opportunities or excess supplies. And in Berry Alliance, growers have a sustainable route to retailers that allows them to be more flexible in their pricing.
Berry Alliance can also provide a seamless solution. It sits at the heart of an established ecosystem of independent but complementary companies that can be combined and configured to provide a unified service. This service ecosystem includes two highly automated fruit packing services (Ackio and Elision), which can both pack the fruit and monitor its quality. It also includes Wellpak, a leading supplier of fresh produce from around the world that is well placed to trouble shoot for the retailer if the need arises.
We’re confident that, in Berry Alliance, we’ve developed a solution that is robust and accessible to both ends of the supply chain. It’s supported by an established infrastructure, with the right growers already engaged and on board. Through Berry Alliance, we can get the freshest fruit at the best price for the retailer, while removing the cost and effort involved in managing the process.
To find out more about how Berry Alliance can benefit you go to www.berryalliance.org.uk