Development of the Farm Shop sector in the UK
Farm shops have evolved hugely from when produce was sold from a small stall at the farm gate. They generally started to appear in the UK from the mid-1970s, influenced by the US, as were farmers' markets, which are now also very much part of the British food and drink scene. What these two related areas have in common is primarily the emphasis on local provenance, a factor increasingly seen as relevant. Indeed, British origin was listed as the most important factor when buying food and non-alcoholic drink in 2013 at 34% (Mintel). Essentially, the sector is based on two models – either the large estate able to inject significant investment, or a small family farm with a stall that grows to incorporate new features. In both, there is a direct connection with the farm and the products on sale are often unavailable elsewhere. Additionally, mutual benefits can be gained by sourcing produce from local businesses at an early stage, helping them grow in partnership. Advantages to the economy are clear, with FARMA's calculations for 2013/2014 showing an annual turnover for its 302 member farm shops at £17.7 million with 2,300-2,400 staff employed.
One of the UK pioneers was Chatsworth House, which opened its farm shop in 1977. Its core business revolves around estate-produced lamb, beef and game, but their ethos also includes promoting local products. André Birkett explains: "First we concentrate on what the estate produces (50% sales) and then we promote tenant farmers, the best of local producers, quality goods from the rest of Britain and lastly overseas products (only 3% sales)." The turning point for the business came in 1984 when, after running at a loss, they opened an in-house kitchen and bakery, a progressive concept at the time. Birkett also illustrates how their philosophy benefits the community. "When the local fishmonger closed, we wanted to keep that skill base going, so we opened a fish counter at the farm shop and aim to source fresh fish from British waters caught by small boats." For Birkett, it is essential to establish a secure business appealing to local people, rather than relying on the tourist trade. "The regulars keep us going and give us feedback. If the shop doesn't work for them, it shouldn't work for anyone else."
Other estates have adopted similarly regional-minded approaches. Despite opening Apley Farm Shop during a recession in 2011, Lord and Lady Hamilton of Dalzell saw the potential of their country estate environment. Taking account of socio-economic factors to attract people from neighbouring conurbations in the West Midlands, they started their venture with a play barn and café alongside the farm shop. They source what they can from the estate plus local suppliers, reconnecting people with the appeal of good local food, as Lady Hamilton describes. "The link is too wide between producers and consumers. In focusing on being local, farm shops like ours are trying to reduce that distance and re-establish the real values of food."
Drewton's Farm Shop, located on East Yorkshire's Drewton Estate which also has holiday accommodation within the grounds, is another business that attracts both a strong, local following and tourists. "We appeal to customers who want to know where their food comes from and who want to support the local community", explains Katie Taylor. "We have full traceability on our products, the quality is as good as it gets, we know how fresh it is and there are low food miles, supporting the environment too." FARMA's Michael Mack continues this theme: "With greater consumer interest in the provenance of food and drink, farm shops can trade on point of origin, the story behind the product and the public's trust in that story, connecting with the ethos of their business in a manner that supermarkets cannot do. This is their main point of difference."
Tom Hunt of the Ludlow Food Centre, which launched in 2007, highlights advantages of in-house food production and retail. "Our centre was designed from the start to be the ultimate expression of a farm shop focusing on food produced from raw materials grown on-site or locally. Our own products are not available elsewhere, which is their USP and a similar strategy could help other farm shops survive, allowing them to compete against supermarkets. This model keeps costs down, ensuring money spent remains within the business, as each step of the process from growing/rearing produce to transporting and selling it remains in house, as far as possible, adding value at each stage."
A successful farm shop can also develop from a smaller, traditional, family farm. Historically, for many of these, farming was never particularly profitable and poor prices at livestock markets or changes in legislation led some to diversify and deal directly with consumers. One example is West Craigie Farm near Edinburgh, which changed from dairy to fruit production due to pasteurisation laws, opening an on-site shop in the 1980s. As business increased, in 2007 a new farm shop, ten times larger, was built and a café was added. Within these last eight years, turnover has risen tenfold and the farm shop has continued to expand. The owners retain a clear focus on how to grow further and one way they have identified is by developing their loyalty program, encouraging participants to visit more regularly, with incentives such as shop and café vouchers. Additionally, they benefit from seasonal factors, with their 'pick your own' facility generating more business during summer. Eighty-five percent of what they sell is Scottish (the majority produced on the farm), giving them a point of difference from the multiples. "We don't try to compete with them on price", describes John Sinclair. "We sell customers a story and the experience of being out on a farm, as much as the actual product."
Nevertheless, a FARMA-commissioned study from last November showed that in-season products were on average cheaper in farm shops than in supermarkets. This will come as no surprise to Simon Hirst of Hinchliffe's, whose grandfather founded their farm shop in 1974, having sold eggs straight from the farm in the mid-1960s. "Farm shops can be perceived as elitist and expensive. However in 2013, we did a price survey of 20 items from our butchery, compared with our town’s biggest supermarket and we were cheaper on 18 items."
Many farm shops are also involved in school education and charity initiatives. For example, West Craigie Farm works with the Royal Highland Education Trust, helping children understand how food is produced and at Chatsworth, they have always been committed to this too. As André Birkett illustrates, "One day our children will be in positions of importance, so we need to build our ethos into them early in life and warm them to our business."
On-site family attractions can be a big draw, but a farm shop's core principles remain key to its future. South Yorkshire's Cannon Hall, a struggling farm in the 1980s, was transformed into a successful, year-round tourist attraction, incorporating an adventure playground. Their award-winning farm shop has gained a reputation for selling top quality home-produced beef, pork and lamb. Fewer food miles (the slaughterhouse is four miles away) and reduced stress on the animals lead to a better product in their view. Co-director Richard Nicholson explains: "Since we opened the farm shop (1989), there has been a big growth in a now crowded market. We can stand out from the rest by, among other things, the quality of our produce". Customers would appear to agree with this, as even after the 2001 outbreak of foot-and-mouth disease, revenues were up from the previous year and have continued to grow.
East Sussex's Middle Farm exemplifies the value of a USP, benefiting from The National Collection of Cider & Perry. Its farm shop is one of the oldest in Britain, born of necessity due to water drainage problems on the farm. Originally it operated from the farmhouse kitchen in the 1960s, as Rod Marsh explains. "Diversification was the only practical way forward, so the owners taught themselves how to cut up carcasses, made what they could in the kitchen and sold eggs from their chickens. This sort of expedition into trade was very much looked down upon by the local farming community then, so they had to produce as much as possible themselves. Spreading the net further afield to give customers the very best of UK produce, they began to source cheese made in the West Country direct from the farms there. This interface with producers was to be the defining feature of Middle Farm." Marsh highlights another crucial aspect for survival, that of listening to their clientele. "By the late 1980s, we were being asked by customers who wanted to do their weekly shop with us, rather than use a supermarket, for all manner of things that we could not grow on the farm, so we did our research and sought to supply their needs."
Just as Middle Farm's cider and perry collection attracts customers to its farm shop, several drinks businesses have moved into the sector too. For example, Healey's Cornish Cyder Farm stocks its own and other local produce and also has a jam kitchen, encouraging customers to sample products across the range within a visually attractive setting, incorporating both traditional and modern features. "We’ve kept a rustic feel to the environment", explains Anna Pascoe", so that customers can easily find what they want, but also feel relaxed and not subject to too much of a hard sell". Drewton's Katie Taylor also describes the importance of considering the aesthetic of a farm shop building. "We converted our farm buildings to create a fabulous quality farm shop with big open windows, lots of light, high ceilings with original beams and stonework. The standard of conversion probably appeals to our main customer base, as they feel comfortable and welcome within our walls."
However, the USP of some farm shops remains their traditional nature, as long as they still offer a real alternative to the multiples. Ardross is a traditional Scottish farm shop, without a café or other attractions, winning the 'Retailer of the Year' award at the 2014 Farm Shop & Deli Show. Claire Pollock explains: "We originally set up the shop in response to the pressures of farming, so we began selling our beef direct to the public with the aim of providing a fantastic, high quality product. We now showcase a huge selection of quality foods made in Britain by farming families and small artisan companies and we price mark vegetables daily against supermarkets. With fantastic service too, we can sell through our shop, local home delivery and mail order." Pollock also believes that farm shops can benefit from adverse situations affecting supermarkets, such as the horsemeat scandal. "Consumers are desperately trying to do the right thing, which is where our honest and transparent shop appeals to them. They can ask about any part of our business and we can be 100% honest and happy with our answer."
In contrast to the traditional farm shop, there are several independent enterprises without a farm that share a similar ethos, promoting local, artisan food. For example, Holwood Farm Shop in Kent was created from a renovated, derelict dairy farm building. It has an on-site coffee shop and hosts two food festivals and two craft markets per year. Owner Gary Mercer has a clear vision for the future with plans that include adding a butchery and partnering with a local beekeeper. "Our ethos is to source as locally as possible if the quality and price are right."
An increasing number of supermarkets are now entering this market too. Last April, the East of England Co-operative Society opened The Darsham Hamper and Café. Designed on a farm shop style, 80% of its products are supplied direct from East Anglian farmers, growers and producers. Retail Executive Officer, Roger Grosvenor, says: "This is a bold new venture for us, which clearly demonstrates our commitment to supporting local growers and producers.”
In the face of such initiatives, Ludlow's Hunt believes that the farm shops that succeed will be those that broaden their operation into categories that allow them to compete more effectively in the market, providing new reasons for people to visit them and building on customer loyalty. With this in mind, the new generation of farm shop entrepreneurs may be particularly willing to embrace modern technology. In 2013, the Gurneys assumed control of one of Norfolk's long-established PYO sites at White House Farm. Adding a café and a butcher, they are transforming what was their vegetable shed into a small farm shop. Looking to the future, they have also invested in specialist software that helps farms develop their infrastructure along the lines of supermarkets and other large organisations, supporting their ambitious plans. Similarly, many farm shops are considering online retailing, as Claire Pollock of Ardross explains. "Customers appreciate the personal family feel, the helpful cooking advice and information from our staff. However, I believe that internet shopping is only going to get bigger and therefore may be an area we look more closely at in the future."
Key components for success
- Quality and provenance
- Diversification with a broad commercial outlook
- Promoting seasonal produce
- Responding to customer demand
- Strategies to build customer loyalty
- Tapping into agritourism and "day-out" culture
- Promoting rural economy through education
There are clearly numerous challenges facing farm shops, but there are also many strategies that could help them succeed. The key component will always be good quality home-grown produce and Mintel's 2013 findings that foods of British, local and regional origin are seen as more important in the wake of the horsemeat scandal should be encouraging news for the sector. Therefore, there is no reason to suggest that farm shops won't continue to be part of the food and drink landscape, despite the retail power of supermarkets. As long as they retain their USP, have a clear business plan and always look to provide new, innovative products, they can connect with the public in ways that the multiples cannot do. As Michael Mack says, "The key for growth is to focus on detail, transmitting a positive message based on quality, provenance and benefits to the rural economy. Farm shops should make best use of their environment and keep that connection between the shop and the farm for long-term viability."
This is the full version of my article which was published in the February edition of Speciality Food Magazine.
All photos provided by the businesses listed in this article.