Why we need exports

By Nick Joy

Travelling to Europe is a wonderful thing for widening the mind but also reminding me how much we continue to depend on the good taste of our customers. In Italy, where I am just now, it is the norm to spend 10% to 14% of income on food and this does not include going out to restaurants, which happens a lot. If, like the British, they were not so choosy about their food quality, then we would have a much harder time chasing a worthwhile price.

In salmon farming these days, companies are so much larger and this means that time can be spent on sales strategy to achieve the best price. In the old days, much like agriculture, smaller farm units were so busy actually farming that they couldn’t do much about where they sold their product.

If you have a good product, like for instance Scottish beef and lamb, but don’t spend time on finding the best market, then others will – and they will make the profits. That is the way the world works.

For a while, Loch Duart supplied one of the major retailers. There was a determined effort on their behalf to deal with smaller suppliers and to increase the quality and variety of their offering, while we felt that it would increase our brand exposure.

In a naïve manner, we assumed that they would be a highly efficient and structured organisation, able to handle a different message. We soon realised, however, that the relationship was not going to work.

One of the aspects that frustrated us was the lack of fluidity of price in a volatile market. In the light of the current farmer unrest, this is markedly relevant. The frustration we felt talking with a supermarket who felt they held all the cards was immense.

I remember one conversation well. The buyer said: “You are thinking of stopping supply with us. Aren’t you interested in 17 million customers?”

I replied: “Of course we are but at what price? You want to fix the price and we, a relatively small company, cannot lever our suppliers to lower their prices so we end up the meat in the sandwich, squashed on both sides.”

She couldn’t answer that, so she countered: “Well, you fly and transport your salmon all over the world; surely you would be more sustainable if you sold a great deal more in the UK through us.”

My answer was and remains: “If we did not have exports, you would know exactly how much we were selling our salmon for and we would have no means to counter your strength. Our exports give you competition in that they pay a better price than you, they are more loyal and they value what we do. The wholesalers we deal with need our product for their business; you don’t. So we can approach you knowing that we can talk price from a position of strength and you can never know the reality of our price structure. If we sold most of our product in the UK, you would drive us out of business.”

We eventually walked away from that retailer, not just over price but also from their sheer inability to handle the product well.

Once in a quality forum held in Nick Nairn’s cook school, I was asked my views on the supermarkets, with all the main buyers present.

My reply didn’t please them much: “It is the role of a food producer to try to connect with the public who eats what is produced. If that connection can be made, then all the companies between the producer and the public become service providers.”

This challenges the narcissistic view of the supermarkets that they are the gatekeepers of quality for the public. Of course they are not! Their main aim is to ensure that any food producer can be substituted by another or if not, by another product. This means that they can control supply and the price of supply, whilst at the same time controlling the price to the public. It’s a wonderful position to be in if you are a supermarket, but a pretty awful one for everyone else.

So when you are next filling out one of those awful export documents or cursing a haulier who has lost your shipment for the third time or listening to some customer shouting at you in not terribly good English, remember that these wonderful people are what hold the supermarkets back from total control. Otherwise we too would be out spraying manure at the police on the streets.