Monday, October 11, 2010

Artisan food producers unite!

In my last post, I briefly touched on a problem endemic to artisan food producers - the fact that to train and retain skilled people costs money, in a marketplace which undervalues quality food.

Why does it undervalue food? Doesn't everyone complain about the high cost of feeding the family these days?

Actually, our fresh produce is high quality and incredibly cheap, compared to other countries, because Australia covers a huge range of climate zones. It can grow anything, anytime, and freight it great distances, maintaining those all important supermarket shelves all year round. And while we pay a premium for products with a lot of food miles in them, the overall supply and demand equation is such that prices are low, in the main, for raw ingredient.

So we have lots of cheap produce. Historically, companies with access to more resources and capital can process these large volumes of raw ingredients very efficiently too - huge investments in technology, packaging, freighting and marketing by corporate food conglomerates has ensured that this abundance can be processed, distributed and sold rapidly, with growers and primary producers becoming small and often troublesome cogs in a very large wheel. Technology is expensive, and often too expensive for small producers to be able to acquire, and marketing is also expensive. Thus, many small producers have effectively become ensnared in the corporate food chain, working for the equivalent of slave wages.

As a result, we have seen in recent years the emergence of many small secondary producers, whose main interest is to create sustainable, independent businesses, either outside the corporate food chain, or at worst, in it, but in a limited way. The common feature of these niche producers is they aim to minimise their capital for maximal effect by leveraging smaller and more accessible markets.

On the face of it, this is a healthy development. However,  in many cases you have a very competitive local marketplace with tiny producers clubbing each other to death in the process of building 'sustainable' businesses - because it becomes evident to each of them that the real market for their products is very small - too small to justify capital without more sales.

Some producers, having ruled out 'big capital' as an option for them, come to realise that skilled people are the next best thing. With them, their business thrives. Without them, business owners simply spread themselves too thin, trying to do everything from payroll to payables to production.

As such, producers are often more than happy to headhunt skilled artisan practitioners from their competitors. Skilled artisans are often easily bought, as in the main these people have not been well reimbursed for their dedication, and when someone offers them recognition, their egos respond immediately.

This especially happens in restaurants, cafes and bakeries.

It points to the need for training and dialogue between small scale producers to enhance our skilled artisans and build the labour pool collectively.

It also points to the advantages of offering the committed and passionate staff in these types of businesses a share in the enterprise itself.

Enter the cooperative structure. Stay tuned as the story unfolds...

1 comment:

  1. Love it, this is a detailed description of the industry and the market conditions.I liked the coop proposals for the truly passionate small artisans. I personally think there is another factor that we need to consider before entering the market which is timing.... when knowledge, talent and hard work meet the right time and there is a critical mass out there waiting for you, it is time to act.