Recession-proof Strategies

UK - Delegates at the 2009 Semex Dairy Conference welcomed a very positive address from IGD's chief executive Joanne Denney-Finch, as she emphasised the opportunities that can be born out of uncertain economic times.
calendar icon 19 January 2009
clock icon 3 minute read

Ms Denney-Finch began by describing the food sector as recession-resistant, whilst acknowledging that no sector could claim to be recession-proof. "Over Christmas, it seems that food retail sales held up much better than non-food, and in 2009, we expect roughly the same volume of food to be sold. The mix sold, however, is set to change dramatically, so what we must do is to anticipate and respond to these changes."

"My top three strategies for this recession are one, to adapt with consumers, two, build solid supply chain partnerships and three, to prepare for the long-term," Joanne advised.

"Every period of upheaval also presents a chance to shape a new future."
Ms Denney-Finch

"With regard to consumer behaviour, certainly we can expect this to change. Our research shows that last year 57 per cent of shoppers economised on food and groceries, however interestingly only 9 per cent felt they had down-traded on quality. Price is not the only thing that matters - consumers are increasingly concerned with local sourcing and animal welfare. They are better informed and extremely adaptable, and I have no doubt they will find new ways to get what they want without compromising standards."

She continued by emphasising that whilst price is not the only factor driving consumer purchase decisions, every penny of the asking price must be strongly justified. Any costs should be adding value - and building solid supply chain relationships can ensure that this is the case. She recommended an increased use of partnerships between farmers and processors as an essential tool to eliminate waste and unnecessary cost from the food chain, advising that although "businesses may be able to live with glitches in a supply chain during times of growth - in a recession they must be ironed out."

Thirdly, Ms Denney-Finch advised delegates to concentrate on "gaining competitive advantage not just by fighting fire but by getting ready for the next phase." This long term view would be crucial to business success. She pointed to energy efficiency as a key focus area, citing Robert Wiseman Dairies as a good example of this in practice - where waste has been converted into a new revenue stream. Another opportunity she highlighted was the current devalued pound - presenting an ideal window to start building new export markets and contribute to feeding the world's rising population.

"Every period of upheaval also presents a chance to shape a new future. Many of the long-term trends we've become accustomed to will be reversed, including I hope the fall in British dairy production. The industry must take advantage of everything in its favour and ride out these tough times, then we the upturn arrives we will truly reap the benefits of a resurgent industry," she concluded.

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