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Small food Producers finding new routes to market

Kath Dawson loves getting her hands dirty on her 120-acre farm. Following in the muddy footsteps of four generations of farmers, she was more accustomed to working with crops than computers. That was until three years ago — when her business went online to offer fresh, chemical-free produce delivered to the door at prices low enough to compete with the supermarkets.

“We had been selling our veg at farmers’ markets for a number of years but knew we would need to do something different to compete long term,” said the 53-year-old, who, with husband Ted, 55, runs Ted’s Veg from their farm near Boston, Lincolnshire.

Having been pushed to the brink of collapse by supermarkets offering “next to nothing” for their produce, the Dawsons turned their attention to specialist food markets and now have stalls at 20 of them. It was while trading at London’s Borough market in 2013 that they saw an advertisement for Hubbub.co.uk, an online grocery service that offers same-day delivery within the M25.

“We always wanted to do deliveries but we simply didn’t have the infrastructure, so joining Hubbub was the best thing we ever did,” said Dawson, whose business now offers everything from eggs to fresh juices online.

Ted’s Veg is one of a growing number of independents turning to the internet to compete with the supermarkets. According to the Soil Association, £1.8bn was spent by shoppers on organic goods last year, with £216.3m worth bought online.

While this is just a tiny proportion of the £177.5bn grocery industry in the UK, Lee Holdstock at the association believes the trend is a sign of the growing appetite for technology that enables shoppers to go local.

“Tech-savvy ‘millennials’ are the organic market’s fastest- growing group, with research showing they are more likely to care about the origins of their food,” he said.

Big-name investors have also been quick to spot the potential of giving farmers’ markets and grocers a digital makeover. Farmdrop, which delivers fresh local produce to customers’ doors, recently won £500,000 from backers including Zoopla founder Alex Chesterman and Quentin Griffiths, who helped to create the online fashion giant Asos.

The need for an online link between small retailers and consumers in her area inspired Marisa Leaf to launch Hubbub in 2010. A former human-rights barrister, she wanted to be able to choose fresh, local produce that could be delivered to fit in with her busy lifestyle in north London.

“I wanted the convenience of an online supermarket combined with the quality and personal service that small, local shops provide,” said Leaf, 37, who was inundated with requests to be involved. Today the site offers 15,000 items from more than 100 independent shops, which can be couriered to the customer’s door on the day they order.

Retailers that have signed up to the site pay fixed fees or commissions depending on factors such as volume of online sales, although Hubbub aims to take about 50% of a supplier’s gross margin. In return, the most established retailers on the site have reported that up to 10% of their sales now come from Hubbub customers.

“In the past year we’ve grown threefold and created a community,” said Leaf, who has 25 staff at her headquarters in Kensal Rise, northwest London.

The business has also attracted the attention of high-profile investors. Last year William Reeve, one of the entrepreneurs behind the movie-rental company Lovefilm, joined Hubbub as co-chief executive as part of a £2m investment that will allow the concept to be rolled out across the UK this year.

Anthony Davison has spent the past 15 years building the online community BigBarn to promote farm shops and local producers. Today its directory has 7,000 producers across the country, with more signing up every day.

“I’m a fifth-generation farmer and got the idea for BigBarn when we realised that the onions we grew on the farm, and sold for £120 a ton, were on the Tesco shelf for the equivalent of £800 a ton,” said Davison, 54. He recognised the need to reconnect consumers with where their food comes from and get the best price for both buyer and seller.

There are up to 4,000 visitors to the site each day, and its growing popularity has led to the development of an online market where small retailers can sell their produce, paying 6% commission to BigBarn.

The success of the online shopping experience has spawned a £1 BigBarn delivery service that is available in Bristol but could be rolled out nationwide. There are also plans to have the BigBarn interactive map added to websites such as the Soil Association’s to increase its visibility.

“Consumers are losing trust in big supermarkets,” said Davison, who runs the network from Bedfordshire. “They are finding seasonal, fresher produce often at a lower price, so there is a growing demand for what we are doing.”

Source: www.thetimes.co.uk - 3 January 2016