Food, Farming and Countryside Commission

Cooperatives

By Andrew Faichney

East of Scotland Growers

As the farming industry is challenged to produce more food, more efficiently, for more people, the industry needs to seek out innovative ways to increase sustainable production, competitiveness and profitability. Coops are uniquely positioned to drive forward the innovation and supply chain collaboration that is required, enabling shared risk taking and scalability amongst farmers and supply chain customers.

East of Scotland Growers (ESG) is a farmer-owned cooperative established in 1987 that specialises in large scale vegetable production.

We plan, market, administrate, haul, advise, and control the production of around 6000 acres across 16 farms. Innovation along with R&D is a critical part of what we do.

Some of the recent work we’ve done includes: planting and harvest automations, securing UK exclusivities on new varieties/ products, adjusting fertiliser application and timings, reducing the input by 25%, developing organic production, investigating the use of hydroponics for plant propagation, developing new crop production to achieve a 52 week production for members, and we’re in the planning process of a vegetable drying and powder mill.

As part of a board strategy, we developed ways of utilising waste from our production to add a revenue income. After a year of concept creation work we had eliminated several projects and product ideas and focussed on creating a broccoli-based crisp that would be healthier than alternative crisp snacks. The group’s intentions were to create a branded snack using the waste from our own broccoli – stems, leaves and trimmings – as the primary ingredient, whilst outsourcing the crisp manufacturing.

We had unintentionally created a world first – using fresh vegetables in an extruded crisp – so could not find a manufacturing facility anywhere, let alone the UK. This led to a slight rethink and back into the market to carry out more consumer testing. The product was still receiving very strong feedback which led to the board’s decision to price up the project of building our own factory.

This required a significant cash input: large enough that should the new business be unsuccessful, the capital outlay would destabilise the group and its core function. At this point the decision was to create a standalone company under the umbrella of ESG: this is when Growers Garden was created. The cash was essentially ‘crowd funded’ within the confinement of the ESG members under an EIS scheme and ESG’s IP was converted into a shareholding – so essentially the new company has the same shareholders as ESG, just under a different format. All of this has only been possible because of the collaborative structure of ESG.
As an organisation, the key lessons we learned from the process were about the brand process and the real costs associated with this. In hindsight, we should have put a greater emphasis on the strength that becoming a manufacturer has given the organisation – it is almost an unforeseen business in its own right. However, when I reflect on the overall business development and business structure, I genuinely don’t think we would do anything differently.