Why buying local has proved lucrative business for Co-op boss
PUBLISHED: 10:03 04 January 2016 | UPDATED: 10:03 04 January 2016
Roger Grosvenor, of the East of England Co-operative Society, has helped spearhead a local food revolution, writes ROss benTLeY
East of England Co-op’s vital statistics
– Staff: 5,000
– Stores: 200
– Annual turnover: £342.1m
– Profit before distributions and taxation: £6.9m
– Members’ funds: £221.6m
It was en route to Aldeburgh just over nine years ago that Roger Grosvenor experienced an epiphany about locally-sourced produce.
“I was driving past field upon field of asparagus on my journey but when I arrived at our store and had a look to see where our asparagus had come from, I couldn’t believe it was from Peru,” he explained.
“We decided to start selling local asparagus instead and in that first year we sold around 600 bundles in the growing season from April to June. This year we have sold 35,000 bundles across our stores.”
This is just one example of the success of the retailer’s local strategy championed by Mr Grosvenor. As executive officer for retail he oversees a host of areas in the business from post offices and pharmacy to travel and funeral services.
From a standing start in 2006, the East of England Co-op now works with 140 local suppliers who provide almost 2,500 locally sourced products for the organisation’s 200 outlets across Norfolk, Suffolk and Essex. In 2007 turnover from locally sourced products was less than £1m – this year it is expected to surpass £16m.
To give some idea of the size of the local food and drink operation in relation to the whole business, the East of England Co-op reported a turnover of £342m last year with a profit of around £7m.
Mr Grosvenor’s criteria for a local supplier is one that is based no more than 30 miles from an East of England Co-op store they supply to, although many will also have their produce in other stores across the region. The development of East of England Co-op’s local strategy has happened at a time when awareness of where food and drink originates from has increased significantly. It has also occurred during a period when East Anglia’s reputation for offering first-class produce is on the rise.
“Customers want to know about provenance and quality, and something they can have confidence in,” said Mr Grosvenor, who has been with the Co-op for more than 40 years.
A majority of the local suppliers the business works with deliver direct to East of England Co-op stores, cutting down on food miles.
In some cases, fresh produce such as strawberries will have been picked the same morning that it appears in stores.
And while some supermarket brands have a reputation for nailing down their suppliers, Mr Grosvenor’s approach is refreshingly progressive. “We have a ‘three Ps’ policy,” he continued. “Any arrangement has to make a profit for the supplier, a profit for the society and the products have to be sold at a price that is acceptable for the shopper.
“We pay the majority of our local suppliers within 14 days, but some we will pay quicker if they need us to. We try and pay on their terms.
“Some suppliers, such as fruit producers, will have to pay their pickers weekly, so we might pay them straightway to help them with cash flow.”
Mr Grosvenor says the company has worked hard at bringing local suppliers on board and a dedicated team within the business meets once a month to talk about opportunities to develop the local network further.
At the time of writing several new local suppliers have been earmarked to start supplying their produce soon.
One of the latest initiatives is to supply every store with artisan and specialist breads from bakers in the region. A mark of the company’s non-predatory approach is when it opened a store in Framlingham and rather than competing with the local baker in the town, it approached him to sell his bread in-store.
The East of England Co-op also sells its own branded beer in pale ale and golden ale varieties.
The beer is brewed by Adnams who, apart from brewing beer for themselves and the East of England Co-op, only brew beer for one other company – Waitrose.
“It tells you all you need to know about how highly they regard us,” added a proud Mr Grosvenor, who estimates the local strategy has created around 400 jobs in the regional food and drink sector and protected a whole lot more.
Some suppliers might supply one shop whereas others will ship produce to all the company’s stores but they all have something in common.
None of them have a contract with East of England Co-op – every arrangement is done on trust and a handshake.
Mr Grosvenor said: “We are a route to market for many suppliers and we can help small suppliers in a whole host of areas from labelling, due diligence, bar coding, distribution and health and safety.
“We hold their hand all of the way through if that is what is required.”
He added: “It’s a case of having legs long enough to stand away but arms long enough to give a hand.”