I’m regularly asked – what do you think about ‘the Brexit effect’ in food and drink and what should I do about Brexit?
For the past two years I have been giving much the same answer. “It’s all up in the air - concentrate on the things that you can control, stay on top of your financial performance, set goals and monitor your progress against them.” All good advice. All things that all businesses should be doing, now and all of the time. The trouble is that all of this can feel a bit passive and, to most of the business owners that I know, doing the above just won’t excite them.
So here is the challenge. We still don’t know what is going to happen, even if there appears to be the occasional positive noise in relation to a trade deal. This uncertainty creates challenging trading conditions. It affects consumer demand, supply chain costs, currency rates, interest rates, etc etc. All this you know. This year, more than any in the past three, it feels like the biggest challenge for businesses has been sales growth. Of course there are always exceptions and I do have clients that have managed to grow their turnover but, on the whole, it has been making the sale that has proven difficult.
In uncertain times we have surprisingly predictable behaviour. Commodity traders invest in gold as a ‘safe haven’; we stop moving house; we tighten our belts and we continue to eat and drink. It's this last point that perhaps informs us of what we should be doing. We must all continue to eat and drink – that is a fact of life. So we, the South West Food and Drink industry, have a role or perhaps a duty, to make sure that it is South West food and drink that is being consumed.
But I don’t think that ‘Brexit uncertainty’ gives us the full picture regarding supressed consumer demand. For those ‘in the know’ there is an understanding about what West Country food and drink offers but I think we are currently underestimating the scale of the task in educating the end consumer. A 2015 LEAF survey revealed that a fifth of children didn’t know that bacon came from pigs. We can infer that a number of parents either don’t know or don’t educate their children about the food they are eating and drinking. So three years on, how much have we moved the dial? Probably not. I believe that there are those whose principles, dictate that they will buy locally sourced, locally processed produce wherever possible. There are those that will not. And then there are those in the middle – ‘the marginals’ - that can be persuaded in either direction. In tough and uncertain times they’ll seek out cheaper, mass produced products readily available from supermarkets. In better times, they’ll give more thought to the food and drink they are consuming.
So what, as an industry, should we do? Well this is the bit that I think will excite most business owners. And I think Brexit is the catalyst. Doing nothing is not an option so here is my call to action. Now, more than ever you need to be banging a big, loud, unmistakeable drum about your product, the quality of the product, its provenance, its taste, its unique flavour etc. The challenge is to convert some of the marginals into those that always seek to buy locally sourced, locally produced products and to convert some of the current ‘non – buyers’ into buyers.
The strength of the West Country food and drink market is underpinned by the quality of the product. Lets make sure that everybody knows about it!