1. Local Food Retailing Low Carbon Food Conference St. Andrews, 25 th August 2009 Patrick Hughes Food Marketing, SAC Consulting

2. Changing Business Environment Changes in the economy Change of focus in the market Consumer reactions?

3. Changing Environment Price Unstable pricing environment –Price inflation (now slowing) and slowing consumer spending Retailers with a focus on price and value are performing ahead of the market –Asda, Morrisons, Iceland, Aldi, Lidl Shoppers interest split between higher category products and a focus on price –Freshness, authenticity, origin, perceived healthiness, environmental impact, animal welfare

4. Environmental and Ethical Despite the economy, there remains considerable momentum behind ethical shopping. With the exception of Organic food, there has been an increase in shoppers claiming to be influenced by all other ethical attributes including local food, Fairtrade and animal welfare. Question; I have specifically bought... Source: IGD Consumer Unit, 2009

5. Consumer Questions?

6. Provenance & Local Scottish Origin –Separate studies have shown: 71% of consumers looking to buy local 49% looking to increase local food consumption 75% of Scots loyal to Scotch beef Retailers growing regional buying teams Still potential in local foods –rural Scottish consumers among the most likely to buy local food, –untapped demand in urban areas of Scotland

7. % of all respondents who agree to the Statement ‘I Try To Buy Local Produce Whenever I Can’ TNS Worldpanel – 52 W/E 9 th September 2007 () - % change v 2006 Buying local now (X10)

8. Reasons for buying local food

9. The Rural Food Opportunity Regionally produced food Local sourcing initiatives Food tourism Direct marketing Regionality - Still an opportunity?

10. Local Initiatives Farm & specialist retailers Farmers’ Markets Local foods into other routes: –Multiple retail –Foodservice –Public procurement Food Networks

11. The Next Generation…? 85% of produce sourced from Yorkshire & Humber Providing confidence - Auditing every producer Offer higher margins and a direct route to market Reduce, reuse and recycle is their motto Good quality, local food should be affordable and accessible for everyone

12. Credit Crunch Impact Shoppers are looking to retailers to prevent further inflation. More shoppers are willing to shop at discounters, As consumer attitudes shift, brands need to emphasise different credentials. Simple messages are proving the most effective It would be highly risky for any company to compromise its ethical standards in pursuit of ‘value engineering’ (cost cutting). Companies that can raise their ethical standards during a recession are likely to receive extra credit from shoppers for delivering in difficult times.

13. Implications for local food The recession presents a strong opportunity for producers and retailers of local food The growth in demand for local foods reinforces the importance of provenance and community engagement. For some this may simply require communicating more clearly. Growing interest in animal welfare presents opportunities There is no sign of people losing interest in health owing to recession Make the message clear, simple and easy to understand

14. Resources Thank You Your questions & comments?