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Small British firms benefit from resurgence in local authentic heritage products

  • Rise in small businesses creating British products driven by consumer demand
  • Waitrose and Tesco lead the way in taking on more British suppliers
  • Growth of niche firms, with 20% pick-up in smaller businesses joining GS1 UK
  • Upswing in beverage producers joining GS1 UK, up 41% annually, as buyers pick craft drinks

London, 14 March 2017 - The UK is seeing a resurgence of small businesses producing authentic, heritage products according to Buying British in 2017”, a report from GS1 UK, the supply chain standards member organisation with a community of over 31,000 UK businesses.

New GS1 UK membership data reflects current business and consumer trends as it shows an uptick in more modest-sized new joiners compared to previous years, as consumers increasingly want their food, drink and clothing to demonstrate their local heritage and have fewer air miles. In 2016, 78% of new members had a turnover of £500,000 or less, compared to 58% of all members in 2015, demonstrating a strong shift towards smaller businesses.

UK apparel industry shows strongest growth

The apparel industry was the most significant source of new joiners in 2016, with 21% of companies coming from this field, pushing their total numbers beyond 4,000. Following various sweatshop controversies, consumers now pay more attention to the ‘made in’ labels in their garments. And a ‘made in Britain’ tag is increasingly important to buyers not just here, but across the globe, with a 25% rise in the export of British-made clothing since 2011.

Food and groceries one of the fastest-growing industries

Businesses in the food and groceries sector account for the largest single percentage (20%) of GS1 UK’s membership. The sector is also one of the fastest-growing, with 12% of new joiners in 2016 originating from the food and groceries sector as shoppers seek to buy British.

In terms of actively thinking about the provenance of food, 79% of consumers said it was a consideration (63% some of the time, 16% all the time) and just a fifth said they never thought about it . Three-fifths of shoppers say place of origin is at least as important to them as other factors, such as price and quality, and 55% specifically say they prefer buying UK brands to support British businesses (citing reasons, such as increased trustworthiness and being more attuned to needs and tastes).

Upswing in beverage producers as buyers pick craft drinks

The British beer brewing sector has grown from just 140 breweries in 1970 to an excess of 1,700 – with the UK now having more breweries per capita than any other country . Other craft drinks are also seeing an upswing in demand. The number of gin distilleries has doubled in six years and sales of the spirit recently surpassed £1bn for the first time .

This increased demand for craft drinks is reflected in the growth of GS1 UK beverage members. And although drinks manufacturers account for a relatively small percentage of overall members – less than 1% of GS1 UK’s total membership – the rate at which they join is increasing significantly. In 2016 they made up 3% of new joiners, swelling their ranks by 41% from 316 to 447 over a 12-month period.

New opportunities to bring products to market – online and in-store

GS1 UK data reveals that the most popular sales channel for members is online via their own websites, with 71% doing this. Following closely behind is online marketplaces, such as Amazon and eBay, with just over two-thirds (67%) utilising such platforms that allow them greater scale and visibility than they could achieve under their own steam. Reflecting the trend towards more smaller local companies, only a third (35%) use wholesale or distribution channels, and just a quarter (26%) use other retail stores (i.e. not their own premises).

Of the major supermarkets, Tesco as the largest retailer (28.1% market share ), affords the most opportunities to GS1 UK’s new joiners over the past five years (33%). But it is Britain’s seventh largest supermarket Waitrose that sits in second place – defying its 5.3% market share – by providing opportunities to 18% of GS1 UK’s new joiners. Indeed, many of the 2,500 local and regional products Waitrose stocks regularly outsell their big brand equivalents . This shift isn’t without motive and is driven primarily by consumer demand.

Supermarket Market share* Analysis of opportunities
for GS1 UK joiners
Difference
Waitrose 5.3% 18% 12.7%
Tesco 28.1% 33% 4.9%
Lidl 4.5% 6% 1.5%
Co-operative 6.0% 7% 1.0%
Iceland 2.3% 1% -1.3%
Sainsbury's 16.5% 13% -3.5%
Aldi 6.2% 1% -5.2%
Asda 15.6% 8% -7.6%
Morrison’s 10.9% 3% -7.9%
Source: Kantar World Panel, 29 January 2017

Gary Lynch, CEO at GS1 UK says: “Buying British is back in vogue. And it’s the smaller companies that are driving this trend. Brits love an underdog story and this affinity to the unlikely hero isn’t limited to the sporting arena, with shoppers being just as likely to back the small guy at the checkout. GS1 data shows consumers are becoming more domestically focussed when it comes to their spending habits. Heritage, provenance and traceability are no longer nice-to-haves but increasingly important factors that can make the difference between where consumers choose to spend their money. While there will always be some products and services we’re happy to go to major multinationals for, supporting the local start-up is back on the agenda.”

Andrew Cairns, CEO at Mammy Jamia’s, a premium preserves and dressing producer, says: “As the owner of a British company that makes its products here in the UK, I’m delighted to see that buying British is back in vogue. Buying British food and grocery is essential for the sustainability of UK food businesses, food self-sufficiency, jobs and growth. There are surely a variety of great reasons that buying British products from British companies has a positive effect on the whole picture of our economy.”

1) HM Revenue and Customs (2016)
2) Waitrose Food & Drink Report (2016)
3) Nielsen study of shoppers’ attitudes (May, 2016)
4) UHY Hacker Young (Dec, 2016)
5) Business for Punks by James Watt (Nov, 2015)
6) Wine and Spirit Trade Association (Dec, 2016)
7) Kantar World Panel (2017)
8) Waitrose Food & Drink report 2016

- ENDS -

About GS1 UK

GS1 UK is a community of over 31,000 members working in retail, foodservice, healthcare and more. GS1 UK is one of 112 independent, not-for-profit GS1 organisations operating across 150 countries worldwide. GS1 UK helps everyone involved in making, moving and trading goods, automate and standardise their supply chain processes using the common language of GS1 global standards.

www.gs1uk.org

For more information contact:

Tim Brown
GS1 UK
+44 (0)20 7092 3527
tim.brown@gs1uk.org

Henry Conner / James Staunton
Instinctif Partners
+44 (0)20 7457 2024 / +44 (0)20 7427 1404
henry.conner@instinctif.com / james.staunton@instinctif.com