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Impact of economic pressures on UK hospitality

 Our single largest client base is the UK hospitality sector (hotels and restaurants).  Because of our high price high-quality products, we feel far less the impact of this crisis, but it would be wrong to say that we are not impacted.  There is pricing pressure at several levels of our production process.  

In 2019, 99% of our production was for the hospitality sector, and 100% was for the domestic market.  In 2022, 85% of our production was for the hospitality sector and 95% for the domestic market.  In 2023, 70% of our production was for the hospitality market and 85% for the domestic market.  These changes were entirely driven by our wholesalers.  They are the ones that optimize sales of our products to match market demand and our pricing points.

We will never be a farm that focuses on the UK retail market, we will never sell to the likes of Waitrose Safeway or other supermarkets.  For two reasons; our products are too expensive and too niche.  We sell heirloom fruits and vegetables to restaurants.  

Nothing in life is forever.  As a farmer you have to adapt to the trends and market demands, the key is understanding who is your market and what is your product.  Over the past two years, one wholesaler has expanded its European operations and now ships our products every day to the Netherlands, where it seems there is a great deal of demand for our fruits and vegetables.

We are unlikely to export any of our meat to the continent.  First, because it's not that special to warrant the additional cost.  However, the UK direct-to-consumer demand has exploded.   Our wholesale (again did a lot of the work) has since Covid been very successful in selling our products directly to consumers.  The difference in price for us is staggering.  Our wholesaler tells us that demand for our meat in this segment has grown by more than 50% per annum.  The only difference for us, aside from the price, is the size of the cuts (a lot smaller than what we do for restaurants).

We have seen some high-name recognition restaurants close over the past two years, and they often were clients of the farm, so we've had to retarget our sales.  We never expected that the hospitality trade would be 100% of our business, although we never thought that the direct-to-consumer business would be something either, so sometimes you have to roll with the punches.

The addition of 12 high tunnels is entirely driven by these new markets.  Our wholesaler takes a hefty commission on our products, we know exactly what is their cut and we don't have an issue with these numbers.  They provide the farm with great value, especially in the current market conditions.  


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