Zero Carbon and us
We are all aware of the potential impact of CO2 emissions. Most of us have a level of concern and most of us are doing our bit to reduce it. Individual actions often feel too insignificant to matter and this often justifies inaction. We forget that ‘us’ is made of individuals and eventually individual actions cause change (unfortunately that’s how we got to where we are now).
CO2 emissions are all around us. Working with Lancaster University and the ECO-I project we’re (Thomas Jardine & Co), looking at pioneering a low carbon food and drink sector in Cumbria.
This ECO-I project has brought together a group of Cumbrian Businesses who really want to make a difference to the ‘Net Zero’ ambition in the food and drink supply chain and catalyse change. The first two days facilitated by Angela Moore and Jacqui Jackson brought the group together to look at the challenges they face and introduce them to how we could find some solutions over the coming months. This included looking at the challenges the current food supply chain poses to the low carbon agenda. It was backed up with thinking about how the food & drink supply chain ecosystem could offer solutions to those challenges.
Food Supply Chain: some thought provoking ‘agitation’….
Mike Berners-Lee (author of ‘There is no planet B‘ ) shared with the ECO-I cohort his thoughts on the main causes of CO2 emission in the food supply chain. Here’s his main points:
The world produces 2.5 times the amount of calories we need!
Stop giving good calories to animals and shift from over consumption of meat!
Fishing needs to be properly regulated!
Food miles is not clear cut…importing food by sea can be better than growing it locally!
Main source of food ‘waste’ is feeding animals and consumer waste, retail waste in advanced economies comes third to these!
Food Supply Chain: using its ecosystem to find solutions
Chris Ford has a raft of experience in encouraging multiple stakeholders to achieve change. He offered the cohort a few thoughts and agitations to help them over the coming months:
The end is usually not visible at the start!
Look at outside and inside change!
Become a magnet!
Develop energy in connection cycles!
Find place based solutions!
We have a shared fate!
Marginal gains or revolution!
Then landed the statement: ‘what if we become the leaders of innovation to NET ZERO for the Food and Drink Sector in Cumbria’…..the journey begins….
Cumbria Food and Drink
We were delighted to be asked to talk to Dr Radka Newton‘s International Masters Students about Cumbrian Food and Drink and frame the discussion around the external forces at play! When we ran our food stores, food and drink was a collection of clearly defined supply chain providers. We have watched these chains evolve into a complex, interconnected eco system. It was going to be interesting capturing this in a session with the students.
In the first few weeks of lockdown, everybody was reminded how delicate our food and drink supply chains have become . Our conversations with all parts of the food and drink eco system over the last year have highlighted the huge changes the food system has made because of COVID. Consumers and students have born witness to many of these shifts.
Making sense of the changes
Break out the PESTEL and some of those 5 forces!
Making sense of changes is made easier with business models. The two models Radka asked us to focus on were PESTEL and Porters Five Forces.
PESTEL (Political, Economic, Social, Technological, Environmental and Legal factors effecting business) hints at the directions a sector or industry might take because of changes in these factors. In normal times these factors tend to be fairly static, this is not the case for Cumbrian Food and Drink at the moment:
P – Political
- Regulatory change due to BREXIT
- Regulatory change due to COVID
- Potential regulatory change due to Independent Scotland
- More Scottish public sector support for food and drink businesses just north of Cumbria
- Potential split of Cumbria Local Authority
- Loss of EU farm subsidy changes way Cumbrian Farmers find economic sustainability
E – Economic
- COVID effect on available spend…poorer spend less, richer spend more:
- Cumbrian Local areas of social deprivation spend less on food and drink
- Lake District visitors spend more on food and drink
- BREXIT decreases export/import opportunities to Europe
- Large food producers relocate to continent (McVities, Nestle?)
- Large food producers relocate to UK (Heinz moves Ketchup production back to UK in Wigan driving up demand for NW Tomatoes?)
S – Social
- Move to buy local
- More support for artisan food producers
- Cumbria small local population, potentially food and drink producers lose out to more populated areas own local food producers
- Health and moves to Vegetarian, Vegan, Gluten Free
T – Technological
- Growth of online sales
- Larger potential market place for Cumbrian Food and Drink producers
- More online competition for Cumbrian Physical Food and Drink Retailers
- Blockchain and transparency
- Online replacing High Street
- Death of local high streets , no visitors for farmers markets
- Cheaper rents and rates encourage more local food and drink to set up stores
E – Environmental
- Global warming
- Increased flooding leading to different land use (forestry v sheep)
- Changing weather giving new opportunities …Lake District Wine?
- Carbon argument re livestock cut herds of sheep and cattle
- Reduce miles in supply chain
- More support for start up local producers
- Less opportunity for growing food and drink businesses to export to other parts of UK outside of Cumbria
L – Legal
- Adoption to new regulations due to COVID, BREXIT, Carbon Footprint Targets, Scottish Independence and local regulations due to split of local authority – HUGE sectors of our supply chains becoming TEMPORARILY ILLEGAL!
All these external factors are driving change within the sector. The next tool (The Five Forces) is traditionally used on industries rather on sectors. We would argue that industries within the food and drink sector have in many cases blurred because of PESTEL and it’s an interesting exercise to try to apply the five forces to a sector. So here it goes…
The Five Forces:
Competition in the industry…..Well this got blurry! A wholesaler is no longer a wholesaler, a farmer is no longer a farmer, a producer is no longer a producer in the strictest sense…
- Small producers selling directly to consumers (Kin Vodka)
- Wholesalers producing own products (Pioneer)
- Large producers buying small producers
- Farmers diversifying and selling direct to consumers (Tailored Goat Company)
- Competition in the sector
Force 1: Potential of new entrants into the industry:
- Non meat meat products
- Dark Kitchens
- Food banks, Freegle: non cash transactions (allotments/swops/grow your own)
- Hotel and catering supply chain severely damaged by COVID
Force 2: Power of suppliers:
- Supply chain is merging vertically and horizontally (online and BREXIT farmers effect)
- Globalisation and localisation can both increase power of raw material supplier
Force 3: Power of customers:
- More focused consumer : made for you versus price sensitive, seeking transparency, ethical drive
- Shorter supply chain: consumer buying direct from food and drink producer
Force 4: Threat of substitute products:
New supply chain solutions:
- Reduction of middle man role
- Satisfying the ‘last mile’ in a rural area
- Cheap food from USA, Canada (Canadian Beef bred for UK Market advert in The Grocer)
Facing the future with confidence
All the food and drink producers and all the other parts of the Cumbrian Food and Drink ecosystem recognise the external changes in the world we now operate in :
- WE have the fastest adoption of technology seen in the UK
- WE have a global pandemic
- WE are going through significant CHANGE: MARKET; CONSUMER and SUPPLY CHAIN
- WE have BREXIT
- The Biggest FOOD Review (July 2021) has happened and will be applied
- The current Farming Subsidy will be Removed
- WE as small businesses are VITAL to the UK economy
And we are proud to state that the sector has adapted to this world despite the fact that as businesses:
- We have one of the biggest transitions of ownership/leadership
- We have financial pressures
- We have Pivoting; People; Family; Changed board dynamics;
- We have rapid technology adoption
- We have huge safety concerns
- We have new ways of working (Hybrid)
- We have productivity challenges
- We have resistance to change!
We know how resilient and resourceful Cumbrian Food and Drink is. In July, Thomas Jardine & Co are going down to the Farm Shop & Deli Show with This is Cumbria a group of local producers to show just part of what we have to offer.
If you’re in Birmingham during the shows times come and have a chat. We are always happy to shout about the great work our food and drink sector does or to listen to how food and drink businesses are adapting and thriving to all the world has to offer…
To the outside world the food and drink supply chain is so straight forward. You grow something, you pick it, you prepare it, you take it to market and you sell it.
Working with the food and drink supply chain we find the trick is to use three eyes. One eye on future trends, one inside the business and one outside the business .
Eye on the future
Dean Van Leeuwen the Moonshot Futurist (at a business breakfast organised by Armstrong Watson) showed that specific future trends can be difficult to capture. He reminded us of the speed of change our society is currently facing. This change inevitably leads to redundancy of current operating systems and we have to learn to unlearn old ways. For us in the food chain this means real rapid change. We saw a real example of food retail change at the official opening of Pioneers new food store in Carlisle. The opening was truly a celebration of their journey so far (140 years and counting). The new store has created a hybrid where wholesale food services meets retail with style.
Eye on the inside
In beautiful rural settings like the Lake District and the Eden Valley business space for food producers is a valuable commodity. A recent visit to a well-established small family business demonstrated this. The lack of available space made them focus on constantly improving their systems and relearning the equipment they required. Similarly, a larger well-established food manufacturer kept their productivity increasing by constantly identifying new machinery for their processing. This now means they are ahead of the curve and looking for partners to work with to develop laser cutting equipment for the food sector.
Eye on the outside
We had an interesting conversation with a young business that is looking outside. The business had done its research well and knew who they had to talk to and what they needed to prepare. Their problem was getting key people to talk to them. The business wanted to talk to a local council officer and couldn’t pin them down to a time. The local council are a good bunch with business at heart BUT are pushed for time and this appears to be impacting on the support they can offer, we’re sure they will find the time soon.
Adding the third eye
The observant of you would have realised we reckoned you needed three eyes to succeed in food and drink. Our food and drink manufacturers are not aliens, they have simply learned the art of thriving in the modern business eco-system, they share knowledge with each other and work with agencies to ensure full visibility of the future, the present and the outside world. This is Cumbria demonstrated how these businesses can get things done and we (Thomas Jardine & Co) just love working with them.