Produce Business UK examines how the success of the East of England Co-operative Society’s Sourced Locally range is a clear indication that provenance and quality are still of utmost importance to UK consumers
The resounding success of the discount retailers has understandably attracted a lot of attention – but this doesn’t mean that they are the only cause for celebration within the grocery sector.
The East of England Co-op, for instance, has been quietly enjoying its own success story after seeing sales of its Sourced Locally range grow by 22% during the year to January 25, 2015. This particular range has also amassed a turnover of £14.6 million – a figure that is impressive for a regional retailer whose range was only launched in 2007.
The growth of Sourced Locally also dramatically grew earlier this month (June, 1-14, 2015), when the co-op, which is the largest independent retailer in East Anglia, held a promotion called Sourced Locally Fortnight.
The initiative encouraged customers to buy from the popular range – and further increased sales by another 22%. Such achievements point to a business model that is evidently holding its own within a competitive market.
Around 140 suppliers from Essex, Suffolk and Norfolk – the three counties in which the East of England Co-op is based – supply the Sourced Locally range. Fresh produce accounts for a large part of this offering, with its list of fruit and vegetable suppliers including Norfolk-based tomato grower Cornerways Nursery – which earlier this year won the East of England Co-op’s Supplier of the Year award – Suffolk-based top-fruit grower (and juice producer) Stoke Farm Orchards, and strawberry grower Lodge Farm (also in Suffolk). Locally-produced food is now one of the key items purchased by East of England Co-op customers – but Roger Grosvenor, the group’s executive officer for retail and founder of the brand, reveals that this wasn’t always the case.
He explains: “Around seven years ago I was driving past fields of full of asparagus. Then I got to one of our stores and looked at a bundle of asparagus in our fixture and it was from Peru. I turned to my retail operations manager and said: ‘What are we doing?’ Initially, we were looking to sell 500 locally-grown bundles in our shops – now we are selling 40,000 bundles throughout the season.”
Quality and provenance
When asked why customers have clearly taken to the Sourced Locally range, Grosvenor, who has been working in the industry for more than 40 years, uses the analogy of a local newspaper. He believes that shoppers can relate to the “story” of a local supplier in the same way in which they relate to local newspaper stories about the community in which they live.
“People can identify with the product,” he says. “Products sell better if you can imagine and understand where they have been produced. We always name the supplier on the packaging as I think it’s important that people know the relationship between the East of England Co-op and our suppliers.
“I set it [the range] up on the basis that we would treat [our] suppliers fairly and honestly,” Grosvenor continues. “We are proud of that relationship and put it on the package. We don’t hide anything. We show them [the customers] everything. People know, for instance, that their strawberries were grown less than three miles away.”
In addition, Grosvenor employs six permanent demonstrators that go around the group’s food stores to “promote ‘local”. “They all know the story behind each supplier,” he says, adding that, given the co-op’s desire to support the local community, it opts to not sell products cheaply for the purpose of a promotion.
The co-op also does not sell “value products” within its Sourced Locally range. But while some of the prices may be higher than the multiples, the margins are generally still in line with normal category margins.
“We do not overprice – we are not ‘premium pricing’,” states Grosvenor. He uses the example of bundles of asparagus – suppliers of which include Suffolk-based J R & K Poll Asparagus – that have been sold by the co-op at £1.99 per bundle since 2007. This might not necessarily be the cheapest available price, but Grosvenor asserts that it’s still less expensive than some of the multiples. East of England Co-op customers are, he says, willing to pay for product quality and provenance, as well as the fact that they are supporting their local economy.
The supplier partnership
To date, the Sourced Locally range has created 400 new jobs in East Anglia and “protected a whole lot more” – facts that do not go unnoticed by the co-op’s customers. Grosvenor says: “Some of our suppliers have said if we had not come along they would have gone out of business.
The co-op takes a refreshingly flexible approach to business since it considers its suppliers to be its [business] partners. Rather than inking a contract, they sign what is called ‘the East of England Co-op’s Local Supplier Bond’.
“It’s a supplier partnership,” Grosvenor explains. “It works in such a way that we have a policy of three ‘p’s,’ namely (1) profit for the supplier partner, (2) profit for the society and (3) a price that’s realistic for the market [consumer]. And our suppliers also receive their money within 14 days.”
Given the current need for a Grocery Code Adjudicator in the UK, this simple yet effective approach to business commands respect. And, as fresh produce buyers continually seek out new and interesting products, it is perhaps worth their while to take note that UK consumers remain eager to know the story behind their food.