UK wholesale market sector still full of potential

Gill McShane

Despite being dogged by rumours of its impending extinction for years, the wholesale sector retains its position as a crucially vibrant channel into the UK fresh fruit and vegetable trade, offering opportunities to turn a real profit for those that respond appropriately to the needs of the fast-evolving marketplace. Produce Business UK hears of the opportunities and challenges in London and outside the capital from Richard Thompson of Leeds-based wholesaler Gilbert Thompson and Jan Hutchinson from New Spitalfields Market, in the East End of London

Watch the video interview here

“Thirty years ago people said wholesale was finished and people still say it now,” says Richard Thompson, a director at family-run
Gilbert Thompson. “But we see growth for our business and for the fresh produce businesses evolving around us.

“There are fewer businesses, but those businesses are a lot bigger – we’ve seen that in Leeds, especially. Thirty years ago there might have been 30-40 companies, whereas now there are three.”

Despite the widespread and necessary consolidation that’s taken place in the wholesale sector, Thompson says those businesses that have survived the cull are generally stronger and better-placed to invest.

“That’s the way wholesale is going, I think,” he says. “Even though existing markets might continue to shrink a bit, you’ll still be left with decent sized, well-capitalised companies that are investing for the future.”

Jan Hutchinson, chief executive of the Spitalfields Market Tenants Association, agrees that wholesale has stood the test of time; describing it as a “vibrant” and increasingly global business.

“Jim Prevor said [at the London Produce Show & Conference 2014] that when he started [in the produce trade] he was told that the wholesale sector was dying, yet it’s still here 50 years on,” she notes. “It’s still here and surviving. While you’ve still got those small independents in London that need serving, the markets in London will be there for them. We do an awful lot of business around the world in fresh produce.”

If the business opportunities are approached in the right manner, Thompson believes there is still money, and a fair bit of it, to be made in wholesale; as long as operators continue to adapt to the new market realities around them. The wholesale trade was a late adopter of technology, for instance, but it’s never too late. “We’re adopting technology, we’re even selling flowers online to florists,” he reveals. “It’s a professionally-run business now, and done right people can make a significant amount of money again.”

Offer what the customer wants

To achieve that, Thompson suggests wholesalers need to ensure they offer something for everyone.

“You can’t have a one-size-fits-all or one-quality-fits-all policy,” he argues. “There’s got to be something for everybody. There are some people that want the lower value and there will people who’ll always want that […] but there are people prepared to pay money for good quality produce.”

Hutchinson says quality produce is definitely already on offer at the UK’s wholesale markets. “Quality is there in the markets – it’s the same quality as you’d find in any other food sector,” she claims, adding that for those suppliers domestically and internationally who are looking to expand their businesses, wholesale is another potential profitable outlet for their produce.

The key, says Thompson, is to be ready to offer what the customer wants, and to understand exactly what that is. “Delivering what the customer wants and [offering] value for the customer means different things to different customers,” he notes. “I think the industry is responding [well], through the different niches. Catering is driving innovation too, with products like micro herbs.”

Challenges to overcome

It’s by no means all plain sailing, of course. While the wholesale sector remains a healthy, viable route to market, getting the next generation of wholesalers into the business to keep it going remains another question altogether.

“[The wholesale trade] has not got that sexy label attached to it,” Hutchinson admits. “The hours are very long and it can be very anti-social. But I think if you can get people in to it and let them get a taste for it, if they’ve got a passion for something they can channel that passion into the fresh produce industry. It doesn’t matter what side of this industry you’re in, the one thing you find is passion.”

Thompson goes as far as to say attracting new talent is still the biggest problem for the wholesale industry. “To actually make it sound interesting and make it sound like something an ambitious, educated, degree-qualified person would want to get into – that’s the challenge,” he explains.

A new generation with different perspectives could be vital if wholesale markets are to continue to remain relevant in the global picture. “We can’t put our heads in the sand in the UK and think everything’s going to stay the same,” Thompson adds. “It isn’t. Fresh produce is changing. There’s Africa, India and China that have emerged, and some of the products we take for granted will be harder to come by, or we might have to pay more.”

However, he retains his faith in the future for the UK wholesale sector, for those players who remain flexible and adaptable. “Some of the bigger wholesalers go home in nice cars to nice houses,” claims Thompson. “There’s quite a bit of money to be made in wholesale, if you do it right.”



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