(last updated July 2019)
What has been happening in the farm shop sector?
Shopping in farm shops has become increasingly popular with many UK consumers with the result that the number of farm shops has grown in recent years and there are now several thousand of one sort or another.
Farmers have been encouraged to diversify and have often had to do so in order to survive. A farm shop can be an ideal way to expand the business and grants may sometimes be available to help start one up. A relaxation of the 'change of use' planning rules from 2013 which allows agricultural buildings under 500 square metres to be changed to a shop without planning permission may also have made it easier for people looking to start up a modestly sized farm shop.
Food scares in recent years have made many people far more aware of the quality and safety of the food they eat, which has led to an increasing demand for fresh 'wholesome' food. After falling during the late 2000s and early 2010s, demand for organic food, which is a key product category for many farm shops, is continuing to increase and in 2017 was worth £2.2 billion according to the Soil Association. Customers are also keen to meet the people who produce their food and many are eager to show their support for local farmers. Similarly, concerns about the environment and animal welfare have encouraged people to buy locally produced and welfare-friendly food. Farms shops are ideally placed to take advantage of this growing market and many established shops have seen an increase in customer numbers in recent times.
Farm shops and farmers' markets fared surprisingly well during the economic downturn of the late 2000s/early 2010s despite selling many types of product that, in a similar form, are cheaper to buy elsewhere. Both farm shops and farmers' markets are popular with tourists and turnover of the sector may have been boosted by the increased number of people that chose to holiday and/or take short breaks at home in the UK rather than going abroad during this period. Although domestic tourism dipped somewhat during 2013 and 2014, it then increased again during the mid-2010s. The number of overseas visitors to the UK throughout the 2010s has also risen steadily.
After starting to pick up in 2013, the economic recovery stalled in the second half of 2015 and into 2016. Further economic uncertainty followed the vote in June 2016 to leave the EU. The continuing uncertainty over the Brexit negotiations, higher inflation, weakening growth of real wages and the loss of consumer confidence in the economy led to consumers reining in their expenditure during 2017 and little change is expected during 2018 and 2019. It is likely that expenditure on more expensive foods, like deli and organic items, will be reduced until the economy picks up.
Farmers' markets
The first farmers' market started in 1997, but there are now a significant number around the UK, which reflects the huge increase in public demand for fresh, high quality food. Markets are usually held on a weekly or monthly basis and the emphasis is on quality and freshness. At these markets, local growers and producers sell their own goods directly to the public - everything sold should have been produced by the stallholder. Many farm shop proprietors also take a stall at their local farmers' market and it can be an excellent way of boosting sales and raising awareness of the shop.
Vegetable box schemes
Vegetable box schemes, like farmers' markets, have really taken off over the last few years. Boxes of fresh, seasonal vegetables are delivered directly to customers' doors (or sometimes to a central drop off point). Deliveries are usually made every week, but fortnightly deliveries are sometimes offered. A set price is paid for each box, although the content varies depending on what is in season. Some farms offer boxes that also include fruit, dairy and meat products.
Recent developments
In recent years there has been:
- increasing public awareness about food quality
- increasing concern about environment and welfare issues
- growing awareness and concern over 'food miles' (the distance a particular food product has travelled between its point of production and point of sale)
- four years of reduced expenditure on organic produce in the late 2000s and early 2010s which was followed by six consecutive years of growth, with the market reaching £2.2 billion in 2017
- a growing demand for locally produced goods
- an increase in the number of farm shops, farmers' markets and vegetable box schemes
- an increase in customers at many existing farm shops - according to Farm Retail Association research, around a third of households now make some purchases from farm shops
If you intend to start up a farm shop, you will have to decide whether:
- there is sufficient demand to support your shop
- you will be able to compete against other shops selling fresh produce in your area
- there is a need for you to specialise in order to compete more effectively
- you can identify a particular niche in which you can specialise
- you will offer organic produce or your own specialities to attract customers from your competitors
- you will offer additional services such as a vegetable box delivery scheme
- you will sell other locally produced goods, or just your own
- you should offer additional products such as plants, craft goods or flowers
Keep up to date with the farm shop sector
The Farm Retail Association (formerly FARMA) represents the interest of farm shops in the UK and provides a number of resources to members including performance benchmarking, merchant services, a mystery shopper visit and supplier discounts. They also run a certification scheme for farmers markets and offer other benefits including training and discounts from preferred partners.
