Customers willing to spend on produce from small producers

Consumer demand for small food suppliers is high, but it takes organisation to manage the contracts

Farmers markets in the UK are becoming more popular than ever before. Nearly 600 regular farmers markets across the country bring in a combined income of £220m a year, showing that customers are increasingly willing to spend on produce from a small producer who specialises in a limited number of products. This trend for buying local ingredients from a known source means that more and more consumers are now asking where the ingredients on their restaurant plate come from. Although bulk buying is often cheaper, customer interest means restaurateurs who don't use local suppliers for specialist produce, and make it known on their menus, are missing a business trick.

Chef/Owner of Isinglass in Manchester, Lisa Walker, says that 55 per cent of her produce comes from small suppliers (45 per cent of this produce is grown especially for the restaurant), with the rest mass supplied. Although she admits that on paper it may look difficult to turn a bigger profit when you're buying from someone who doesn't have the large economies of scale that a big corporation has, one advantage is that usually the person who grows the produce is also the person who sells it, so negotiating on price and supply is much more viable.

The flexibility required makes buying from small producers ideal for independent restaurants who change their menu daily or at lunch and dinner. Oliver Rowe, Chef/Owner of Konstam at the Prince Albert in London's King's Cross, is one such restaurant. He says, "90 to 95 per cent of our stuff comes from small suppliers. We change our menu twice daily. If the supplier's not able to provide us with enough for one service, it becomes untenable. If I opened a chain I would build in menu flexibility. But if you say we need to have this now, therefore we must have a supplier who can do this, you won't get small suppliers." The way around this is to turn a negative into a positive marketing tool, a unique selling proposition, or USP, he says.

It's widely known that at Konstam all ingredients are sourced within the M25, so if there's an item on the menu that can't be sourced that day, floor staff will explain this to customers and tell them why. "It's part of our brand, so it's reinforcing the company identity," explains Rowe.

Using local suppliers sets you apart from the competition and "helps to draw people in. It's part of your USP, so why not shout about it?," he adds.

Of course, by cutting out the middleman (ie the market) and buying straight from a supplier, restaurateurs should pay slightly less. Walker says, "For example, I'd pay £3.50 per three kilos of courgettes at the market, and from my farmer it's £3." Not a huge price difference admittedly, but "there is a massive amount of difference in quality." The farmer also grows three different kinds of courgettes for her, so she gets exactly what she wants.

Doron Zilkha, owner of London's Brompton Quarter Café, Dining Room and Grocer, agrees that this is a big benefit in dealing with small suppliers. He gets all of his meat from Rhug Organic Farm in Denbighshire and approaches price negotiations personally. "In terms of meat and poultry production the suppliers are very small, but the customer is guaranteed to get good produce and the benefits of dealing with one person are huge. It's about a good deal for them and us."

The deal is usually also a two-way street since farmers may have been squeezed on price by selling to supermarkets. "My vegetable farmer used to grow for a supermarket and it almost drove him into bankruptcy,"

says Walker. The problem with this is that because of previous experiences like these, many small farmers are wary of entering into long-term signed contracts with no get-out clause, Walker explains. "Business with small farmers is usually based on communication and handshakes."

Be warned though, using lots of small suppliers means better organisation is essential, adds Walker. "If you use small farmers you've suddenly got 14 or 15 suppliers and you're having to juggle orders coming in and payments going out."

Do:​

• Agree a price beforehand. Paying promptly – on delivery if possible – fosters trust.
• Prepare for paperwork. There will be plenty of invoices flying around.
• Maintain communication. If something is unavailable, forewarned is forearmed. You might even learn something about growing your own.

Don't:​

• Forget transport. If deliveries are an issue, consider sharing a pick-up run with other businesses nearby.
• Expect a contract. It can frighten off small suppliers, especially farmers, too soon.
• Keep your customers in the dark. If something's off the menu, take the opportunity to explain how you do things and why.