Food chain pilot schemes show £14m savings

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Farmers and growers involved in a series pilot projects had saved a some £14 million the Food Chain Centre has revealed in the report on its five-year pilot programme.

The Food Chain Centre was set up in 2002 as part of a national strategy to improve the competitiveness and profitability of farming. It has been supported by the Institute of Grocery Distribution and Defra, and has given farmers access to information about changing patterns of food consumption and the evolving food chain.

The report shows a rise in the proportion of farmers benchmarking between 2002 and 2006 from eight per cent to 33 per cent. Farmers reported substantial benefits as a result: 52 per cent say they improved their practices and 34 per cent enjoyed better returns.

Through a business school farmers can now access the shopping habits of a million shoppers to test their business ideas. A pilot group of farm businesses enjoyed an average sales uplift of over 10 per cent from using this information.

Six companies involved in pilot projects based on assessing the potential for applying techniques first developed in the Japanese car industry reported total savings of £626,000 in the first year.
The report also showed a return on investment of at least 270 per cent across the whole programme.

Chairman Joanne Denney-Finch said: “Companies involved in 25 of our projects reported savings totalling a minimum of £14.4 million, much of which is repeatable in future years. However, the real value is not for these participants, but in demonstrating the potential returns for farm businesses of the work we have undertaken in applying marketing, lean thinking and benchmarking.”

Results from individual projects included:
* 400 farmers supplying Dairy Crest with milk for cheese-making, who saved £2m per year after a review of the supply chain for the product
* Jack Buck Growers, who reduced the distance travelled by their produce by 23 per cent – resulting in annual savings of over £50,000
* The NHS Purchasing and Supply Agency, which saved £3m in the cost of the 5 A DAY project through more efficient packaging and distribution.

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