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Analysis: How we will look back on the summer of 2022

An industry under pressure: Is the opportunity for tech here for agriculture?

After a challenging two years where Brexit and COVID have often dominated the headlines, in the summer of 2022, the UK produce supply chain is again being challenged more than ever in terms of its resilience.

The combination of factors at play make for something of a “perfect storm.” This is not a situation peculiar to just the UK. We have found that the same sort of conditions can be found in the U.S., Chile, Peru, Colombia, East and Southern Africa, the rest of the EU and the Gulf – and others too.

A lot of coverage has been given to the issues of recruiting enough, and the cost of, farm and packhouse labour. If there is no let-up in the shortage of labour on farms, what can be done?

Implementing new technology is clearly one answer. There is certainly no lack of exciting developments in the horti tech space to consider. In addition, far more effort needs to be employed to simplify work on farms and to use management practices, like “lean” to save minutes then hours from every aspect of the workload.

Supply chain relationships

Inflationary increases had been already seen across a spectrum of fruits and vegetables and all areas of input supply such as labour, transport, energy, packaging, crop protection products and seeds/planting materials.

The ability of growers and packers to pass these cost of production increases onto customers has been mixed, but it can be done. To get these farm gate price increases though, needs excellent supply chain relationships. These still need improving.

Hot weather – a need to do things differently in the future?

On top of the ag inflation being experienced for most of this year, we have had one of the hottest and driest summers to date on record. What it has shown is that few farmers in the UK are adequately set up for temperatures of 35 – 40 degrees (100-110 F). Again, this presents the opportunity to do things differently in the future in terms of building design, management of heat stress in plants and water usage/storage.

Changes in consumer markets

At the other end of the supply chain there is a good deal of pressure too. Food inflation based on estimates by the UK Institute of Grocery Distribution, is likely to reach 15% this summer, hitting most vulnerable households hardest. Monthly food bills are set to rise by another US$60 per month for a typical family of four. Food inflation is now set to hit its highest level in more than 20 years.

Consumers are expected, going forward, to moderate some purchases and seek value for money deals. None of this is especially encouraging for growers or packers. But will we see consumers stop buying fresh produce altogether? This seems unlikely.

Fruits and vegetables are still very good value for money for consumers, and we think that consumers will cut back on other non-essentials before food.

Sustainability and food security – still key opportunities

With the ongoing situation in the Ukraine highlighting the need for better food security, some of the more radical recommendations of the UK National Food Strategy to address this now appear to have gently been put to one side, at least for the time being.

But the opportunity to replace imports of fruits and vegetables with domestically produced products, and increase our own food security, is one of the big market opportunities that produce companies can look to tackle going forward.

Regardless of all the other factors in the “perfect storm,” consumer and retailer sentiment towards UK produce is probably as high as it has ever been.

About the Author: John Giles is a Divisional Director with Promar International, the consulting arm of Genus plc and has worked on fresh produce assignments in the UK and some 60 markets around the world. He is also the current Chair of the annual City Food & Drink Lecture held in London.


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