Brand growth accelerated by supermarket presence
Having your products in a supermarket is a great way to promote your brand but you work hard for it, according to Tim Fussell of Fussels Fine Foods, whose rapeseed oil has graced the shelves of Waitrose, Sainsburys and Morrisons on and off over the last 15 years.
Tim and his brother Andrew are third generation farmers in Somerset. They set up Fussels Fine Foods when the price for their rapeseed fell below £100/tonne.
“We started processing the crop to add value, but this also added complexity,” says Tim. “Rather than simply selling seed to a merchant, we now had to market our product and find someone to buy it.”
Like many other farmers, the brothers began by using local markets and shows to give their product visibility and grow brand awareness. “It’s time-consuming but was really the only route to market open to us.”
Since then, the business has grown to where it is today – a product range of over 15 rapeseed oils, dressings, vinaigrettes and mayonnaise found in foodservice as well as retail.
Retail comes in many forms for Fussels Fine Foods – including farmshops, independent stores and online – serviced both directly and through wholesalers. Offering online retail was an essential addition to their presence at markets and shows in the early days, explains Tim. “If we ran out of something at a show or customers didn’t have enough cash, we needed another way for them to access our products.”
But Tim admits the move into supermarkets was prompted by greed and delusions of grandeur. “To gain a national listing, you think you’ve made it!”
The brothers started as a regional supplier to Waitrose in 2012 and have remained in 15 stores across the South West ever since. “As a company, Waitrose stresses its support for British farmers and buying local produce, so we fit well with their ethos.”
But the seemingly big break came when Sainsburys wanted Fussels rapeseed oil in 500 stores and Morrisons in 300.
“You take what you’re offered but that’s possibly a mistake,” reflects Tim. “Looking back, it may have been easier to start in 60-70 regional stores and increase steadily from there.”
Working with supermarkets is all about relationships and promotions, he says. “Your relationship with the buyer is central to your success and with staff regularly moving around you can’t rest on your laurels; building relationships is a constant part of the process.”
“You also need to be aware the sales cycle depends on promotions, so you must factor this into your price to ensure you still make a margin.
“You take the hit on the price promotion, not the supermarket. But you will see volumes increase markedly, possibly four-fold.”
And price was their undoing with Morrisons. Unable to determine a supermarket’s retail price, Morrisons set it too low for Fussels to run any promotions, resulting in inadequate sales and consequently being delisted.
In contrast, sales growth in Sainsburys was impressive running at around 20% per year, achieved largely through the ‘three weeks on, three weeks off’ promotion cycle. But again, as soon as sales waned, the inevitable de-listing occurred.
“You have to prove your worth every week, so you must be able to run promotions. If you don’t hit your sale targets, you could be out – and we were. The review process of what’s being stocked in any supermarket is both complex and ‘robust’!
“I don’t take being delisted personally. Like most farmers, we’re a very small supplier in the retail world and you are treated no differently to the large multi-nationals so it’s going to be tough,” says Tim.
“I’m immensely proud to have been a national supplier of two large supermarkets and continue to value our ongoing relationship with Waitrose.
“Each part of our sales strategy has informed another. Growing brand awareness initially through the local markets has supported our regional supermarket and online sales.
“Unless you are seriously over-capitalised at the start, you simply have to put in the hard yards, but that’s nothing new to farmers.
He concludes: “I advise anyone building a business like ours to start by knowing your exit strategy, so you can work backwards to know what you need to do to achieve it.”