Major provenance opportunities for Cereal Supply Chain

New research commissioned by HGCA has demonstrated opportunities to open new markets, add value, and increase margins in the cereals sector. The research identifies ways that growers and processors can use provenance as a marketing tool, a tactic that is proving increasingly successful in the meat, fresh produce and dairy sectors. Although relatively few cereal products currently have strong links with provenance, the research report highlights the possibilities for the cereal sector to appeal to consumers’ desire to know where their food comes from.

The research was conducted for HGCA by Bidwells Agribusiness using focus groups, as well as a review of current shopping behaviour. The principal areas of opportunity identified include:

- Targeting those consumers who are already buying into provenance in mainstream outlets, and who want to buy cereal products with meaningful provenance

- Artisan / small scale and larger producers developing an association between their products and the region that they source / manufacture their goods

- Better demonstrating the heritage, tradition, product origins and links with farmers, to engage shoppers who are interested in buying British or supporting local farmers and food producers

- Using provenance to differentiate cereal products from competitor lines (both branded and own-label)

Roz Reynolds, Market Development Manager at HGCA, said: "The report shows that the market for foods with provenance is evolving, with shoppers taking greater interest in food origins. Across various categories such as meat and fresh produce provenance is already impacting on consumer perceptions of food quality and taste. We wanted to see what opportunities there were for the cereals sector to add value to the products they deliver to consumers."

Richard Walters, Head of Food Consultancy, Bidwells Agribusiness added: "The results are very clear cut and identify significant opportunities on which to market successfully. The key is to understand which consumers to target and how to go about it. In a way the cereals industry is starting from an almost blank canvas, as there is currently only limited preconceptions about where cereal products originate."

Although the research showed that the term ’provenance’ itself was not widely understood or recognised by consumers, it showed that the idea itself is highly valued. A range of provenance attributes were identified that consumers aspire to, from which four recurring themes appeared which are considered important:

- Supporting the local community e.g. buying local or regional food, items with low food miles, or buying British

- How food has been produced e.g. to specific standards, using natural ingredients

- Where food has come from e.g. named producer, assured supply chain, producer with heritage and tradition, natural production methods

- Environmental issues, e.g. organic, welfare standards, chemical use

Roz Reynolds added: "The nature of these opportunities differ across cereal product categories, but by working together across the supply chain companies can maximise their value. The research has revealed significant opportunities for the baking, malting barley and rapeseed oil categories in particular. There are already examples of where provenance is being used successfully, such as Coors brewers in their Carling lager. Hopefully we’ll be able to help others in the cereals sector to take advantage of the report findings in their future business plans."

ENDS

For further information, please contact:

Peter Crowe, Ceres 0118 947 5956/07967 504034

peter.crowe@ceres-pr.co.uk

Roz Reynolds, HGCA, 020 7520 3975 roz.reynolds@hgca.com

Editor’s notes:

HGCA is the cereals and oilseeds sector of the Agriculture and Horticulture Development Board (AHDB) which was established on 1 April 2008. HGCA supports the UK cereal and oilseeds industry in improving its competitiveness in the UK and overseas markets.

For more information visit www.hgca.com