Tesco on mission to win over smaller producers

Growing consumer demand for healthier foods and a greater interest in local produce has prompted the UK’s biggest grocery retailer to improve its relationships with smaller producers.

According to chief executive Terry Leahy, Tesco will make it “easier for the small suppliers to tap in to Tesco”.

In a recent speech to the Campden & Chorleywood Food Research Association, an independent research and development body serving the interests of the food chain, Sir Terry said the retailer will be holding a series of regional open days for producers to meet its buyers.

It also plans to introduce regional counters in its stores and improve on-pack labelling to highlight local produce.

“Customers’ attitudes continue to change, and one of the changes we are seeing is a growing demand for local produce,” said Sir Terry.

He emphasised that the research does not suggest that “Britishness” is the most important factor to the consumer, but “there does seem to be growing interest in ‘local’ and seasonality”.

“We have to be realistic.

Most people are still going to want to be able to buy fresh fruit and vegetables all year round, and for health reasons we shouldn’t discourage that.”

Sir Terry also revealed details of the changes in consumers’ buying habits since the retailer began labelling foods with Guideline Daily Amounts for calories, sugar, fat, saturates and salt in April 2005.

To illustrate, he described how Tesco compared weekly sales eight weeks before and eight weeks after GDA signposts were added to packaging.

“Over that period, sales of standard salmon and cucumber sandwiches fell by 30%.

Our healthy living alternative – with lower saturated fat and salt – rose by 85%,” said Sir Terry.

The same pattern emerged with ready meals, with shoppers switching from dishes high in saturated fat to healthier alternatives such as vegetable curry.

Similarly, meals containing high levels of salt also fell. It’s a trend he expects to continue.

By spring 2007 Tesco will have incorporated the GDA into the packaging of all its 7500 own-branded products.

“These are not marginal changes,” said Sir Terry.

“A shift in the market of this size over such a short period is extraordinary.”

“Bear in mind that these are still early days so this has huge implications, not just for the health and nutrition, but also for the food industry,” he added.


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