Clive Black’s romance with food started in the 1980s when he studied corporate strategy in the Northern Ireland food industry for his Ph.D. at The Queen’s University of Belfast. Black, grew up in Coleraine, Northern Island, where the smell of the countryside remains a poignant memory, and since 2003 has been head of research at London, UK-based Shore Capital Group Limited, likes to tell it this way: “this was a time when the scene was filled with agriculturalists who couldn’t spell food, in a time when the consumer was coming to the fore of the farming industry’s mind.”
Consider that the 1980s was the decade that Bovine Spongiform Encephalopathy (BSE) or ‘mad cow disease’ started its epidemic rise and former British MP Edwina Currie resigned over a misspoken warning over salmonella in British eggs. Both topics made national and international media headlines.
Pundit readers may have first read of Black last year. This is when the researcher, who is one of the UK’s top consumer analysts and rated No. 1 for retail in the 2014 Thomson Extel survey, was quoted in the June 2016 print issue of Produce Business UK Guide, The UK Grocery Retail Market, distributed at last year’s London Produce Show.
In the article, Turn & Face the Change, Black commented on the challenging changes going on in the retail industry driven by today’s consumer shifts in shopping habits. You can read the article here, starting on page 10:
This week, Black, as well as Chris Cowan, consumer insight director at Kantar Worldpanel UK, and Jan England, managing director of England Marketing Limited, will be panelists at the London Produce Show’s Retail Panel Discussion: The Future of the Retail Environment. The panel will be moderated by Claire Powell, former Retail Operations Manager of fresh produce at Sainsbury’s, one of the UK’s leading retailers.
To give Pundit readers a preview, Carol Bareuther, RD, contributing editor of the Pundit’s sister publication, Produce Business, talked with Black about his research over the past year and discussed views on how subjects such as the rise of online retailing, price consciousness in consumers and political climate will affect the UK’s fresh produce industry.
Clive Black
Head of Research
Shore Capital Group Limited
London
Q. Let’s start with last September, when you were the key speaker at the Appetite for Growth Conference, organized by the Northern Ireland Food and Drink Association. In your presentation, you provided the intriguing statistic that over 1 in 10 shoppers (10 to 12 percent) will shop online for groceries by 2025. What do you think this will mean to brick-and-mortar retailers?
A: Online will continue to gain share in the UK grocery market, but it will perhaps be on a more rational basis for the participants going forward as the last mile is very costly. Online grocery remains the preserve of the wealthier, whilst changing lifestyles often work against mainstream online; eat for today, for example. All eyes will remain on Amazon, which can be expected to nudge ahead, as its one-hour fresh food service perhaps bridges the convenience/online conundrum. For store-based retailers, online remains an opportunity and a constraint. Focus will remain on improving the operating models, so lowering costs, while remembering that the incumbent store players still dominate the market.
Q. More importantly for our audience, what is your advice to suppliers to be ready to best capitalize on the online shopping sector?
A. This is a big question. In short, understand the shopping behaviors of the generations and how to market to those shopping in their late teens and early twenties; that is ultimately the future.
Q. Also in your Appetite for Growth Conference presentation, you mention that price-consciousness has moved up on the customers’ agenda, yet at the same time affordable treats are important. What implications does this have going forward for high volume buyers and sellers of fresh produce?
A. Value is here to stay with the discounters embedded into the UK retail scene. However, price value does not mean the absence of fun, value-added, the virtues of provenance and so forth. High volume sellers of fresh produce will have to keep operating costs, efficiencies and scale benefits to the fore of their minds…
Q. Carrying the price theme forward once more, how is and will deflation and a climate of retail cost-cutting and price-promotions affect food suppliers’ ability to be creative and innovate?
A: We are moving into an inflationary climate from deflation where promotions often rise, not fall. However, over-promotion was a feature of the last economic cycle and so things may be different this time. Accordingly, simplification and base case price with the cost points in tow above are likely to be key.
Q. Is there any room in the budget left for suppliers to educate consumers about their products and collaborate with retailers in selling strategies? What are your thoughts?
A. Margins are likely to remain tight but health and well-being is a key growth trend in food markets that the fresh produce segment should nurture, capture and benefit from.
Q. Changing topics, in a 2016 article you wrote for The Grocer on the 2016 winners and losers of British grocery, you reference the big political changes seen in the UK and elsewhere in 2016. How will the current political environment — Brexit if you will — affect the food chain, especially with reference to cost of goods, ongoing consumer behavior and supply of labor?
A. Uncertainty prevails. One of the days that the London Produce Show takes place is a surprise UK General Election day. Expect more uncertainty to come. No one knows what Brexit will bring… no one. For the trade, it brings opportunities — import substitution, export abilities, and constraints — such as the security of labor supply.
Note that no one is suggesting that the UK will ban migrant workers. Unfortunately, all firms will have to work through the ebbing and flowing scene and make decisions accordingly.
Q. What will this changing political landscape mean for suppliers going forward?
A. Currency will be the key arbiter of the emerging geo-economy. If we bungle Brexit, then the British Pound will fall and labor may be a whole lot more available in the UK.
Q. Moving ahead to research from earlier this year, in the Shore Capital and EFFP Agri-Food Outlook: Spring 2017 you speak about a rebalancing of the UK economy in the wake of Brexit. What are the advantages and challenges of this rebalancing for fresh produce suppliers currently and in the future?
A. Rebalancing will bring greater access to the best young British talent who will not just be absorbed by the City of London, as an example. The food industry, in general, should like all industries and regions, benefit in time from a less financial services and south-east political class.
Q. Lastly, regarding your being a panelist at the London Produce Show, what is a question you would really like to be asked by the audience — and what would the answer be?
A. I’ll leave that one to your imagination.
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It was no less spirited a grower and capitalist than John Shropshire who introduced the Pundit to the wisdom of Clive BLack and in his interview he expresses the wisdom communicated by a quote varyingly attributed to Bernard Baruch or J.P. Morgan — when the great depression hit and the stock market collapsed shouting newspaper reporters are said to have asked one of these spirited capitalists ‘What is going to happen with the stock market?’ The response: ‘It shall fluctuate’
Come join us at The London Produce Show and Conference and learn the form these fluctuation of markets and commerce actually take. You can register here.
If you need a hotel room, end us your specifications here.
We look forward to a robust discussion at the LPS2017!
