Many businesses have received valuable help from their regional food groups. Now those groups are seeking the support of members as they face a future with far less government and EU funding, writes Suzie Horne.
Regional food groups are undergoing sudden and massive change as government cuts force them to become more self-sufficient and to compete for limited funding.
Eight of these groups work across England to champion and promote the products of their membership of about 5000 local and regional food and drink businesses. Business advice and support is also an important part of their work. Each Regional Food Group (RFG) operates slightly differently, but funding for all in recent years has come mainly through Regional Development Agencies (RDAs). However, income from membership fees is also important, while some also have support from local authorities.
The eight English RDAs will come to an end in March 2012 and some will continue to fund RFGs until that time.
Some groups had funding cut last year, others such as Yorkshire RFG “deliciouslyyorkshire” learned only recently that funding from Yorkshire Forward will cease at the end of March this year rather than in 2012 as had been expected. As a result, staff numbers were abruptly reduced in late 2010 from 27 to 12. Its main activities will continue to promote and raise awareness of members’ businesses, provide market intelligence, bring buyers and suppliers together and provide technical business support through training and workshops.
The cost of this will largely have to be covered by the group’s 625 members, although there is the prospect of some EU funding and some initiatives may be eligible for support from the government’s new Regional Growth Fund.
This discretionary £1.4bn fund runs from this year to 2014 to stimulate private sector enterprise across all sectors of business and includes a requirement that proposals must create long-term private sector-led economic growth and employment. Both of these sources require groups to tender for the cash in competition with others and to provide match funding from their own sources. There is also the possibility of Big Lottery funding, which also needs to be match funded.
RFGs are now working to become self-sufficient within a climate of limited public funding, says Jonathan Knight, chief executive at “deliciouslyorkshire”.
“It’s clear that the days of public funding are over and we should plan to depend only upon the income we can generate from membership and the activities and services we provide.”
Food Northwest is working alongside universities and other organisations to promote regional, ethnic and organic food as well as technical and business advice, as required by the terms of its current funding.
Chief executive Pat Foreman admits times are challenging and that services will have to be paid for in future to cover the group’s overheads. However, like most who are involved in the RFGs, she is enthusiastically pursuing new ways of securing the group’s future, including the reinstatement of a trading arm, partnerships with other businesses and the possibility of Regional Growth Fund funding in the next round of the scheme.
Most of the South East Food Group Partnership (SEFGP) RDA funding ended last year, but this group also attracts funds from levy body Seafish and is hoping to get RDPE funding for a London Food Hub, which is at business plan stage.
Aside from this, it is continuing to help local food producers in many ways including providing that all important link between producer and buyer. SEFGP is also involved in trade development work with producers, multiples, the food service sector and wholesale markets as well as working with the public sector to increase the level of regional food in schools and hospitals.
Regional food in the south east is also supported by several county councils, with each county often having its own initiative, although funding here is also under threat.
“It’s going to be quite a tough year but local food has come through the recession and many farm shops are doing good business,” says SEFGP managing director Henriette Reinders.
Corporate sponsorship and partnership with businesses ar other routes being developed.
While each group is fiercely loyal to its region, all eight came together to form the English Food & Drink Alliance about two years ago. This co-ordinates their activities and has helped reduce costs by allowing them to share best practice and reduce duplication of effort. For example, the SEFGP has developed a very successful retail training programme for farm shops also used by other groups.
“Our intention is not to promote an amorphous mass of English food and drink, but to champion the individuality and quality of characterful local products at local, regional and importantly, international levels,” says Mr Knight. He also speaks for the alliance, which will lobby government on behalf of local food interests.
In March, the alliance will bring together suppliers from all eight regions in a pavilion at IFE, the UK’s largest food and drink exhibition.
Support and loyalty for local food is still growing, says Mr Knight, and farm-based retailers are picking up ideas from national retailers.
The most popular areas of support for farm-based food businesses in the “deliciouslyorkshire” area are:
• Supply chain advice and support, especially meet the buyer/supplier events
• Commercial advice and trade development support
• Merchandising workshops
• Farm shop work – customer profiling, driving basket spend, product range analysis
Other services offered by this and many other groups include:
• Business advice
• Hazard Analysis Critical Control Point support
• Food hygiene ratings
• Food safety manuals
• Food safety, health and safety and product development training.
• Design and layout of premises.
Membership benefits vary between regions, but often include free business directory and website entries, legal helplines, newsletters, access to networking events, use of the group’s brand and help with PR. Discounted rates for technical training and compliance, help with product development access to food industry seminars, workshops and events is also useful.
Annual membership fees of £300 (or £100 for start-up businesses) for the Yorkshire group have not been increased this year and membership is still growing, although at a slower rate since the middle of last year, said Mr Knight.
“We have surveyed 140 members since Christmas. Half were positive and the other half said that things were tough and would get tougher. Some are currently holding back from big decisions on extensions, for example.”
The biggest challenges for farm-based food businesses include the complexity of labour, employment law and the environment, making it more difficult to keep things simple, says Mr Knight.
He stresses that the foodservice sector, which represents 55% of the market, is an increasingly important potential customer which is often easier to engage with than the retailers.
Knowing costs of production and understanding how to control them is hugely important and something with which business advisers at the group are often called upon to help.
Case study: Wharfe Valley Farms
The Kilby family began pressing its home-grown extra virgin oilseed rape oil in 2006 after successfully securing a grant from RDA Yorkshire Forward.
After 18 months’ production, things were going so well that the original plant and building at Wharfe Valley Farms, Collingham, West Yorkshire, could no longer cope and expansion plans had to be quickly put in place.
The business has now grown sixfold since that first year and has a turnover approaching £250,000. Its products are sold in 200 independent shops nationwide and 200 supermarkets – including Asda, Tesco, Morrisons, Booths and Waitrose.
Sallyann Kilby describes the help the family had from its regional food group as invaluable. “At the start it was all those simple little things that often get overlooked or that you don’t know about when you do your first show, what you need and how to present things.”
However, the crucial benefit was the introductions that “deliciouslyorkshire” provided to potential retail customers.
“There’s no way we would have been able to meet those sort of people or get access to them in the way that we did through the group. They can seem very scary people before you meet them but they are actually not at all scary when you get to know them.”
Help with calculating costs, prices and margins was very important, as was knowing what to expect and where and how to pitch things, says Mrs Kilby.
“They helped us to understand how the buyers would look at our product and how they would integrate it into what they were already offering.
“The group’s annual awards also give publicity and help create a general feelgood factor. We won producer of the year in 2008/09. It gives a great boost to small producers.”
RFG membership is something that Mrs Kilby strongly recommends to farm-based food businesses. As well as the direct contact with potential customers, networking links between producers are also important as businesses can exchange tips and experiences between each other.
The Kilbys are now having to look at how to maintain margins with a tough economic background. Many competitors have put their prices up but the Kilbys have not yet taken this step.
“In the past two years, things have plateaued to some extent. Farm shops are finding things more difficult so they tend to do smaller orders, which cost more to administer and to deliver per unit.
“The beauty of our business is that if we grow too much of the raw material, we can sell the surplus into the traditional markets for oilseed rape,” says Mrs Kilby, who runs the business with husband Geoffrey and son Stephen.
The business is run with family labour, apart from one part-timer during term time for three short days a week. In the intial stages, the Kilby’s daughter Amanda’s experience as an environmental health officer was also important.