As milk prices crash (again), Tim Gelfs says it’s time for farmers to stop being ‘price-takers’, and to start learning from Coca-Cola
Image: Laura Hitchcock
Just when it looked like our dairy farmers were finally getting back into profit, milk prices have come crashing down around their ears – and the outlook for any recovery over the coming winter months isn’t promising.
Volatility now seems to be the norm across all agricultural sectors. Boom and bust in the pig industry is almost a given, but have we even asked why the beef and lamb prices have managed to stay firm over the past few years?
We are told time and again that we are ‘price takers’.
But why?
British farmers have some of the strongest selling points in the world. Our husbandry and food safety are second to none. We produce home-grown British food, and our customer base – the consumer – wants to support us. Yet all of this seems to get lost on the shop shelf. The messaging is poor at best, and often confusing.
Our farm assurance schemes are cumbersome and over-complicated, losing sight of their actual purpose – to assure. Their job is to reassure consumers that our produce is reared or grown to high, safe standards, so that when they place it in their trolley they can buy with confidence, knowing it’s been looked after from field to fork.
My biggest frustration with all assurance schemes is that none of them do what I call ‘the hard yard’ – actually marketing themselves to the consumer. Yes, I know Red Tractor currently has an advertising campaign celebrating 25 years (though how many non-farmers – i.e. actual consumers – have even seen it?).
But when I asked, ‘What are they following it up with?’ I got blank faces, shuffles of paper and a stuttering explanation of how much it all costs.
As they say, if you can’t do a job properly, don’t do it at all!
Caffeine and sugar
So, does some of the responsibility lie with us farmers? Of course it does.
I’ve always said we’re rubbish – not just at marketing, but at supplying the product at the right price, at the right time, and in the right amount. Take my own industry at the moment. Eggs have been riding high for more than two years. And what have we done as an industry? Invested millions to upgrade and produce even more eggs. We don’t need that many more eggs!
We haven’t spent a bean on marketing. We know we can increase consumption – we have a great product. Food inflation is out of control for many reasons, and here we have a superfood that provides a relatively cheap, on-trend protein … and we’ve done nothing. Nothing! At a time when the market is screaming out for it – and when, for once, as an industry we can afford it.
Do you think when Coca-Cola was making big profits and selling out, they said, ‘Let’s just up production and enjoy the good times while they last’? Of course not. They invested in their brand and their marketing. They are arguably the best marketeers around – selling carbonated water full of caffeine, sugar and chemicals, and putting a huge margin on it!
By comparison, we have products that are healthy and nutritious – things people have to consume every day, or they fall over.
It’s not rocket science.
Our big problem is that we’re fragmented, and we lack confidence in our industry leaders to manage and lead. We’ve never had to market our products before, because there was always someone to buy them – it’s only the price we didn’t like. That’s why we’re still ‘price takers’.
We need to invest not only in our farms, but in our products and our marketing. We really do have a choice: stay the same and hope for different results, or take a long hard look at ourselves – and make the changes that count.
