How local sourcing buffers Weetabix against supply shocks: ‘It protects us from fluctuations in the wider wheat supply chain’
Weetabix Food Company famously sources all of the wheat for its name-sake cereal brand from within 50 miles of its factory in Burton Latimer.
Following this summer’s ‘temperamental’ weather, there were worries among the company’s Growers Group about a restricted crop growth and a repeat of last year’s disappointing harvest.
“Each year, harvest for farmers is an incredibly pressured time, especially when you rely on something like the weather,” Fay Johnson, Partner at Rectory Farm in Leicestershire which supplies wheat to Weetabix, explained.
These concerns will have been echoed by many wheat farmers around the world, with drought in North American and Russia hitting production and too much rainfall in the EU holding up harvests. According to data from Markets Insider, wheat prices are up almost 47% year-on-year, climbing to over €274 per tonne today (23 August). Tightened supplies, quality issues and higher costs are sparking concerns over shortages and rising prices for staples like bread.
But, for Post Holdings-owned Weetabix, the good local harvest and its strong commitment to working with local farmers has paid off.
ADM, one of the two merchant partners who supply all Weetabix protocol wheat for Weetabix Original, revealed the crop from the Growers Group is expected to total 15-15.5m tonnes this season.
“After last year’s unusually small harvest return, we’ve returned to more normal production levels this year,” noted Jonathan Lane, Head of Grain Trading at ADM Agriculture. “It’s a later harvest than usual and the wheat is of more variable quality due to the temperamental weather we’ve had this year, but all very usable.”
According to John Petre, Head of Supply Chain and Technical at Weetabix, this close relationship with the Growers Group insulates the company from some of the volatility seen in the commodities markets and provides it with the ability to manage swings in production levels.
“Our commitment to locally sourced wheat for Weetabix Original does protect us from fluctuations in the wider wheat supply chain and gives us control of quality and quantity of wheat sourced,” he told FoodNavigator. “Regular contact with our farmers also gives us great insight on how the crop is doing from when it’s planted, through to harvesting before it’s delivered to us.”
Weetabix’s local sourcing strategy
The Weetabix Growers Group is a collective of farmers established in 2010 as part of the company’s commitment to source the wheat for Weetabix exclusively from farms within a 50-mile radius of its mills.
“Since 2010, we have been guided by the Weetabix Wheat Protocol, which we set up in collaboration with the Growers Group to establish environmental standards and produce high-quality, great-tasting wheat. Working to the protocol brings many benefits; boosting the ability of local farmers to invest in higher standards and providing great tasting wheat for British breakfast bowls across the country,” the supply chain expert told us.
Over 350 local farmers have participated in the scheme, growing approximately 75,000 metric tonnes of wheat each year across more than 4 million acres.
Weetabix describes the group as a ‘key part’ of the it’s sustainable sourcing policy. The company describes it as being made up of ‘environmentally aware farmers’ who Weetabix trust to grow, harvest, store and deliver the finest quality wheat. The Group helps to keep food miles low and aims to establish sustainable farming practices, the company noted.
“Our relationship with local farmers goes back to the beginnings of the company,” Petre reflected. “The past year has refocused lots of minds on the importance of buying and eating local to support communities and to reduce food miles. We’re only as good as the wheat we buy, so working with our Growers Group in partnership on sustainability means we can make a bigger impact together than we could have done apart.
“We pride ourselves on our excellent relationships with suppliers, from our farmers and raw ingredient providers right through to our logistics partners. The strength of these relationships enables us to work closely with partners across our supply chain to ensure the highest standards of ethical and environmental compliance.”
Transparency and price
Transparency and an open flow of information is central to the relationship between Weetabix, its merchant partners and the farmers that supply it.
Jonni Henson, Grain Trader at Frontier Agriculture, explained his role is to ‘facilitate the supply chain, working closely with the growers and Weetabix’. “There have been challenges this season but the flexibility shown by all involved has ensured it’s also been a successful one. Our grower customers appreciate the transparency of the Growers’ Group and the flow of information.
“For example, part of the protocol is to send text or email notifications after each load and at the end of the year each grower gets a scorecard summarising how their deliveries have performed throughout the year,” the trader explained.
ADM’s Lane added: “The solidarity of our relationship and open communication with Weetabix is really important, especially as we enter a period of uncertainty with the upcoming changes in the agriculture policy. This understanding with Weetabix puts us in a strong place and will allow us to develop other opportunities across sustainability and carbon-retention in the future.”
In addition, Weetabix provides a guaranteed premium to all their protocol growers. “This transparency and certainty means the Growers Group is going from strength to strength. We’re looking forward to working on new initiatives such as sustainability; helping Weetabix growers to record and manage their environmental impact better,” Henson noted.
“We always look to pay a fair price over and above the market premiums depending on the type of wheat required,” Petre confirmed.
While Weetabix and its suppliers are celebrating a decent harvest, what would have happened if conditions had been less favourable?
Petre explained: “Through the Growers Group we’re kept well informed on the UK wheat crop as it’s growing, long before it’s harvested. We have options to buy UK wheat from more than 50 miles away or outside the UK if necessary. We do purchase some wheat on the open market for other Weetabix products so this would be an option if our locally-sourced wheat provided lower than expected yields.”
