Sole supply agreements in the potato processing sector are helping to improve profits, reduce waste and raise quality. Louise Impey reports from an initiative in Norfolk
An £8.4m investment by H J Heinz at its Westwick factory, just north of Norwich, is good news for potato growers in the area, says Ian Rainford, production manager at the site.
“This is a big commitment from Heinz,” he says. “It has funded new processing and packing lines, which means that we will be able to process 100,000t of potatoes this year. That’s a 40,000t increase.”
Potatoes destined for Heinz’s Westwick factory will be made into a range of frozen products, so smaller tubers can now be processed rather than being thrown away.
The Westwick factory produces about 60,000t of frozen potato products for Heinz’s Aunt Bessie range (see panel), including chips, roast potatoes and mashed potato, he adds.
“Having the capacity to produce all these products will help us to reduce waste,” says Mr Rainford. “Potatoes which are too small to be made into chips, for example, can now be used for mash. Previously, they were thrown away.”
All the potatoes being used in the factory are supplied by the Higgins Group, which has entered into a sole supply contract with Heinz until 2011, says the company’s European buyer, Bryan Towell.
“Only a few years ago, we were buying all our requirements at weekly auctions,” he says. “It was high risk and we had no relationships whatsoever with suppliers or growers.”
The principal reason for moving to a sole supply arrangement was to raise quality. “It also gives us the traceability that our customers are asking for, as well as continuity of supply and reduced risk.”
Heinz is not equipped with potato growing and handling expertise, he adds. “That’s why we are working with the Higgins Group. They have the necessary skills.”
Graeme Byers of Higgins Group says the company is is involved right through the production process.
Graeme Byers, technical director with the Higgins Group, says the company’s activities encompass all stages of the potato lifecycle.
“We’re involved all the way along – from the development of new varieties for processing right through to installing potato handling facilities at factories and staff to manage stock.”
Forty varieties are in trial at Higgins, all of which are processing candidates, adds Mr Byers.
“There are three hurdles that they have to clear. The first is field performance, the second is the cook test and the third is their suitability to factory processes. It they’re expensive to grow or process, they won’t be used.”
Recent introductions include varieties such as Courage, Smile, Horizon, Olympus and Moulin Rouge.
SUPPLIER AIMS TO KEEP IT LOCAL
Norfolk potato producer Tim Papworth is one of the local growers who is supplying the Westwick factory through the Higgins/Heinz partnership.
But he also has seven other processors within the area, allowing him to keep his marketing options open.
“Our aim is to keep it local,” he says. “Heinz and Kettle are the two closest processing outlets to us, but we also have companies such as McCains in the region.”
Delivery costs have risen with the increase in fuel prices, he adds. “It’s true that imports are now more expensive, which works in our favour, but logistics costs have gone up for us, too.”
Supplying local factories helps to minimise these charges, as well as reducing food miles and the farm’s carbon footprint, notes Mr Papworth. “Our customers are looking at these things more and more now. We can tick those boxes.”
The ability to bulk load and store blitz has been useful. “Being able to move volume has made the operation much more efficient.”
Mr Papworth has grown Courage for Heinz this year and hopes that future contacts keep pace with rising production costs.
“Our fuel and nitrogen costs have doubled in the last year,” he points out. “Compound fertiliser has trebled in price, while land and machinery costs have gone up by 20%.
“It’s interesting to see that some companies are introducing contracts worked out on an agflation basis. That could become more commonplace.”
AUNT BESSIE SALES GROW
The credit crunch has helped the frozen market to achieve 6% growth this year having been in decline previously, reports Jane Jones, marketing manager for Heinz’s Aunt Bessie range.
“There’s been a trend towards frozen products, as consumers look for ways for their money to go further,” she says.
Aunt Bessie is the leading European brand in frozen mash. The “Delia effect” has played a role, she admits. “Our sales were up by 205% the week after her television programme was broadcast. There was a clear message about the quality of the ingredients and new consumers started arriving.”