You can find fresh food for thought in unexpected places

‘Food markets have gradually been taken over by intermediaries’

By Hamish McRae

Independent, Business Section: 21 February 2001

One of the mixed delights of being a business writer is that a lot of management books land on your desk. At present, the collection includes titles such as How Digital is Your Business?, The Mind of the CEO and, more prosaically, Regulating Utilities ¾ New Issues, New Solutions.

I’m sure these are all worthy efforts, but I can’t say my heart leapt at the thought of having to read them. Instead, I found myself leafing through a rather more enticing book that someone had left on the next-door desk.

It is called The Farmers’ Market Cookbook, and in it there are more lessons about the business world than any management book I have read in the last six months. No, not the recipes ¾ I didn’t get as far as that. The lessons are in the story of how the author, a young American journalist working in London, brought the concept of farmers’ markets to Britain [sic ¾ should be London].

Nina Planck was brought up on a farm in Virginia. Her parents sold produce at the first farmers’ market in the Washington, DC, area, starting in 1980. Now they sell at up to 15 and without them would not be able to make a living out of farming. The author was a reporter for Time magazine and became a speechwriter for the US ambassador in London. She found she could not get the fresh local produce that she was accustomed to in the States and decided to set up a farmers’ market here.

The concept ¾ that farmers should sell direct to the public ¾  is not at all new. We have lots of pick-your-own farms in Britain and I recall my parents selling vegetables from their garden at a farmers’ market in Kilcoole in Co Wicklow. The farmers’ market used to be the main way producers sold their output. But food markets in Britain have gradually been taken over by intermediaries – traders – rather than producers, and the whole food industry has become dominated by supermarkets.

So Nina Planck rented a site, ignored indifference from the National Farmers’ Union (“our members wouldn’t be interested”), persuaded a few farmers to give it a try and got the Agriculture Minister, Nick Brown, to open the first farmers’ market in Islington in June 1999.

Since then, the farmers’ market movement has had explosive growth. Ms Planck opened two more in London in the next three months and gave up her job to start farmers’ markets full time. The movement took off; there are now 250 farmers’ markets in Britain.

So what are the lessons here for the business community? I can find at least 10.

The first is that Americans are wonderfully entrepreneurial. I go to the Islington market every week, but I never realised it had been set up by a young American journalist in her spare time. There are lots of other examples of American entrepreneurship in Britain: First Tuesday and the Seattle Coffee Company, to take just two. We benefit enormously from this ability to grab an idea and make it work.

Lesson two is that London in particular benefits from its enormous foreign professional community, the largest on the planet. Figures last week showed that the three local government districts with the highest rate of business start-ups per head of population are Kensington and Chelsea, Camden and Islington ¾ all areas where young foreign professionals live. The figures do not show what proportion are started by foreigners; but foreigners form a great market for the new businesses and hence drive local entrepreneurs to create services for them.

Lesson three is that the UK is a good place to start businesses. There are few barriers to entry. You could hardly imagine even a sassy American exporting an idea like this to, say, Germany. As for roping in the Agriculture Minister to open the show, that would surely be unthinkable.

Number four is that despite our position in a world of instant knowledge transfer, there are still entrepreneurial opportunities, particularly in the service industries, in taking an idea that works in one country and trying it in another. A good test case of whether a British idea works in America will be Pret-a-Manger’s expansion there. The first outlet on Wall Street seems a success, and with McDonald’s as a partner, the group will have the money to scale up the idea.

Five is that there is fat in the distribution system which ¾ if you can trim it ¾ enables producers to make more profit than they would were they to sell through intermediaries. In the case of many farmers, this makes the difference between profit and loss. One of the people selling in Islington told me that they had completely reorganised their business round farmers’ markets and this was what had enabled them to survive.

Lesson six is that people like dealing directly with producers. The brief conversation, the bit of knowledge about the product, enriches our enjoyment of the purchase. Bespoke manufacturers wisely offer the opportunity to their customers to involve themselves in the production process: buy a Morgan and you can go and watch it being made.

Number seven is that season still matters. With air transport and freezing you can buy anything, any time. One of the ways in which the supermarkets build their margins is by beating the seasons. Some years ago a supermarket director told me proudly how they had introduced strawberries for Christmas. It involved developing the right variety to grow in Kenya, training the farmers how to pick and pack them, streamlining air-freight procedures, sorting out Customs and so on. The result is strawberries that look great and taste like cotton wool.

We had the last partridge of the season a couple of weeks ago from the farmers’ market, enjoying them more because we knew there would be no more for many months.

Lesson eight is that people will pay for quality. Some of the produce at farmers’ markets is expensive, but handmade butter tastes so utterly different from the industrial stuff that it is worth paying the premium. But there has to be value: some of the traders at the market have not survived, I suspect because sometimes the quality did not justify the price.

Lesson nine is the power of an idea in business. Farmers’ markets have boomed not because a giant corporation invented them, nor because there was an EU initiative, but because they were a good idea.

And finally, for me at least, the most important lesson is the importance of serendipity in the information business. I did not know I wanted to read about farmers’ markets until I picked up a book on a colleague’s desk. And you didn’t know you wanted to read about them, either.    ¨