Supply chain group urges closer work with farmers

By Rod Addy

- Last updated on GMT

Related tags Supply chain Food industry Food Industry

Supply chain group urges closer work with farmers
Food manufacturers must invest in supply chain collaboration as well as brand development to offset price volatility and secure viable long term raw material supplies in the next decade.

That's according to Sion Roberts, chief executive of the European Food and Farming Partnerships (EFFP). Speaking at Cranfield University's food production symposium held at its Bedford campus, Roberts said: "The agri-food supply chain is well developed at the retailer and consumer end. The other end is far less secure. There's going to be a lot of things happening down that end.

"One branded manufacturer told me: 'we've spent the last 20 years building our brand and becoming more efficient, but relatively little in investing up the supply chain.'"

Roberts said that would change. "Relationships with raw material suppliers are going to become a lot more important."

EFFP was working with producers and processors in precisely this area, he added. "We are working with food companies to secure lines of supply. Margins are going to be so affected if there are problems along the supply chain. This is where the value opportunities are going to sit in the next five or 10 years: the interface between food companies and the farming community.

"Most food companies' supply chain strategies used to be based on falling raw material prices. That has now changed. All things lead to a place where an urgent new approach is needed in the supply chain."

The food industry would rely more on large farmer co-operatives to cushion itself against increasing price volatility as oil and grain costs experienced their biggest hike since 1973, demand for food rose and climate change hit production, he said.

Milk was the greatest sector of current change, said Roberts, with livestock lagging behind. Retailers such as Asda had been leading the way in terms of a strategic approach to liquid milk with farmers, he said.

English Food and Farming Partnerships became European Food and Farming Partnerships on October 1 in a restructure that also created allied firm the Food and Farming Foundation to fulfil EFFP's objectives.

Commenting on food prices at the consumer end, Roberts said: "Food affordability got better until 2007. My view is the more pessimistic scenario over the next 10 years is the most likely: in 2017 food will be no more affordable than it was in 2007 in the UK." That contrasted with several decades in which food had been getting cheaper relative to income and overall cost of living, he said.

As a consequence, the food industry was going through what Roberts termed "a paradigm shift the like of which nobody in the industry has seen before". There would be a much greater focus on increasing supply chain efficiency, reducing waste and increasing collaboration, he said.

Related topics Supply Chain

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