25 August 1995

SLOTTING THE ORGANIC LINK INTO POSITION

In the second of our features on winners and finalists in

the ADAS/ Sunday Telegraph Food and Drink Awards, we focus on Wilts-based Eastbrook Farm Organic Meats. Helen Browning explained to David Cousins how her policy of producing added-value, branded meats is meeting market demands

WHEN Helen Browning took over the running of Eastbrook Farm, near Swindon, from her father nine years ago, she probably never bargained on becoming famous. But being enthusiastic, articulate and down-to-earth has made her not just a spokeswoman for the organic movement but has guaranteed acres of national Press coverage as well.

However running one of Britains biggest organic farms and meat processing operations is tougher and bumpier than the glossy images suggest.

The 550ha (1350-acre) farm, tenanted from the Church Commissioners, runs two Friesian Holstein dairy herds totalling 260 cows.

Until now the milk from the herds has been going to Milk Marque. But the farm has just joined an organic milk co-op and from this autumn all its output will go there. A 4-5p/litre increase in milk price is expected and the milk will ultimately end up as branded organic milk/cheese/yogurt.

The dairy herd also produces up to 200 calves for beef-rearing each year and 80 Saddleback sows supply 1400 pork and bacon-weight pigs. Sheep are represented, too, with 650 North Country ewes and ewe lambs producing 900 lambs annually and 600 Warren free-range hens are kept for egg production. All livestock are slaughtered nearby and then processed, packaged and sold under the Eastbrook Farm label.

On the cropping side, the farm grows 140ha (350 acres) of milling wheat and 100ha (250 acres) of oats, triticale, peas and roots for fodder. The milling wheat is all organically grown and goes to local millers.

From the start, Helen Browning took a hard look at the future for farming and decided that, in the light of probable CAP reform, the prospects for farming in the UK were uncertain.

She concluded that the only way to establish any degree of independence was to develop a specific markets for the farms produce. This would mean getting involved much more directly with the consumer.

She had recognised that many consumers are concerned about the way that their food is produced and its eating quality and they want more information about the food products they are buying.

The farm acts as the supplier of most of the livestock for the meat business, but it is the processing side that adds value and strongly brands the beef, lamb and pork. It is this initiative, too, that is recreating a market for quality meats – even among some vegetarians!

Since demand is outstripping supply on most fronts, Eastbrook Farm Organic Meats also buys in some of the meat it sells. At the moment it has half a dozen farmers from neighbouring counties supplying it. As turnover rises that number is likely to increase. People are queuing up to supply beef but theres a pressing need for suppliers of organic pork, according to Tim Finney, who manages the meat side of the business.

The output of Eastbrooks small processing plant is diverse. On one end of the scale are whole carcasses and sides suitable for butchers shops. But the joints, steaks, cooked hams, chops, sausages, bacon and high quality oven-ready dishes appeal across the board.

About a quarter of the meat goes through the farms shop in nearby Shrivenham. Customers consist of both locals and those from further afield. The latter tend to stock up three or four times a year, spending significant amounts at a go.

Mail-order accounts for about 20% of Eastbrook Farm Organic Meats output. Where several deliveries can be grouped together, the farms own van is the most efficient means of transport, says Mr Finney. But the sheer volume of output – typically 25-40 boxes a week – means that a courier service has to be widely used.

The next biggest single outlet is a contract to supply 2t a month of boned-out pork to Denmark.

The rest of the output – about 40% in fact – goes to "small outlets" like butchers, farm shops, restaurants, schools and caterers.

These smaller customers could provide a lot of potential in the future, says Mr Finney, and numbers are increasing. Most butchers, for example, have traditionally tended to be sceptical about organic meat. But they are more receptive to the idea nowadays, realising that the threat from supermarkets makes it important for them to be able to offer something different.

There are 15-20 farm shops on their books and a new one signs up every two months. Eastbrook Farm Organic Meats supplies about 12 restaurants around the UK and Britains biggest private hotel is a regular customer. They also have a contract to supply a group of special-needs schools and are beginning to target contract caterers.

"Our main problem at the moment is scale," he says. "Everything we do tends to be relatively expensive. Although everyone works as hard as they can, its hard for a business of this size to be as efficient as a larger concern."

As it stands, the farm and meat processing side are run separately and Eastbrooks 20 staff are split roughly between them. The farm still accounts for the bulk of revenue, says Helen Browning, but with turnover now past the £0.5m mark the processing side is catching up fast.

Sales of their organic meat have risen fast in the last year. "We took two years to consolidate the business and prepare for growth," says Ms Browning. "Since last year turnover has grown rapidly. We hope that will continue for a while, then well have to reassess the business again!"

She is well aware of the many pitfalls of selling organic produce, among them the small size of the UK market. But after years of slow-but-steady growth, it could be about to expand dramatically, she believes.

"Sales of organic food are small at the moment – probably 1% of the market for food generally, though higher for fresh vegetables," she says. "There is latent demand in the UK and actual demand abroad, but we have a real problem of economies of scale."

"Two years ago I would not have advocated conventional farmers converting their farms to organic on financial grounds. But Im starting to change my mind; theres now enough security in the market for many farmers, especially mixed ones or those in ESAs to make the change."

"They must be committed to what theyre doing and they must be prepared to put the work in. I would hate to see a farmer who has converted not feeling 100% happy about it."

Theres also the problem of lack of continuity of supply and a shortage of information on almost every aspect of the market. No wonder the supermarkets, used to dealing with big suppliers, rapidly scaled down or stopped selling organic food, she points out.

Then theres the tricky business of getting enough of a price premium to offset the extra production costs. While consumers are happy to pay extra for a more welfare-friendly product, too high a margin soon puts them off, says Ms Browning.

"Supplying organic milk is already profitable and organic grain commands a strong premium, but theres no guaranteed premium on meat," she points out. "In fact 50% of the beef and lamb produced gets no premium at the moment."

To try to resolve this a group of organic producers including Eastbrook Farm has gained a grant from MAFFs Marketing Development Scheme to carry out a feasibility study on improving the supply chain management of the additional meats needed to meet rising demand.

This is hoped to lead to a livestock brokerage system through a network of organic meat producers and bring more discipline to the market.

"For beef and lamb you really need around a 10% price premium compared to conventional meat," she says. "For pork it needs to be 30% or more because of the higher grain costs and for poultry youre talking about a 100% premium to make it economically viable. Were just about getting that premium, but it can be a problem for some organic producers."

Eastbrook Farm Organic Meats own customer survey last year showed that education level, not income, is the common denominator of customers. A high proportion have degrees and most tend to be broadsheet newspaper readers. Not exactly a wide cross-section of society generally, but organic sales are now said to be moving outside this niche.

And while UK consumers are proving slow to convert to the organic cause, theres no such diffidence in many other countries. Northern Europe is leading the way (25% of all milk sold in Denmark is now organic). Sales in Japan are rising and in the USA there are now two chains of organic supermarkets.

And though she has been approached by supermarkets, Ms Browning has resisted any move to supply them. Chief among her fears, she says, is putting Eastbrook Farm Organic Meats in the vulnerable position of relying on one big retailer for much of its business.

Since consumers need to be prepared to pay the extra for organic food, could a return to recession in Britain jeopardise the slowly-growing organic market? Ms Browning admits that while organic food is price-sensitive, the long-term future for the sector looks rosier.

"It did go a bit quieter in the last recession, but we didnt go backwards, and since last year sales have been rising again," she says. "In 20 years time Id hope and expect to see 40% of meat bought in this country to be organic, but a lot depends on external factors like market demand and government support."

Two-year-old Hereford steers and 18mth heifers – part of Eastbrooks beef herd. All stock are slaughtered nearby and then processsed and packed under the Eastbrook label, but 25% of the beef used has to be bought in.

Left:Chris Pearce with some of the Eastbrook Farm shrink-wrapped and vacuum-packed organic products. Above: They are experimenting

with reducing the concentrate part

of the pigs diet and using forage.

Chris Pearce, who is in charge of the butchery at Eastbrook Farm, slices organic bacon in the processing plant. A total of 1400 pork and bacon weight pigs are produced each year from the farms outdoor-reared sows.

Helen Browning (above and right) took over the running of 1350-acre Eastbrook Farm near Swindon, Wilts from her father in 1986. Since then she has gradually converted it to organic, with the last 150 acres due to go into conversion this autumn.