11 May 2010

Two Business Decisions That Will Shape Steenbergs Over Years Ahead

Two Business Decisions That Will Shape Steenbergs Over Years Ahead

We've made a couple of small, seemingly innocuous commercial decisions in the last 10 days that will probably have a dramatic impact on Steenbergs as a business over the next 5 - 10 years.

Firstly, we had a visit from Waitrose at their behest to discuss some own label lines of flavoured salts that they would incorporate into exclusive recipe based adverts by Heston Blumenthal and Delia Smith.  We decided to turn down with working with them any further for many reasons, but the key thing really just boiled down to the fact that own label,  non organic work for a high street retailer just didn't fit with where Steenbergs wants to go, particularly where neither of these chefs have any leanings towards "green issues", i.e. Hugh Fearnley-Whittingstall might have made our decision harder.

Secondly, we have just asked to stop our FLO-Cert Trader Status for Fairtrade spices as the commercial basis for it didn't stack up.  We can still trade Fairtrade spices in the UK and Ireland, but having to market Fairtrade spices across Europe for tiny margins was just not economic for us - we were actually not making any money on that side at all except for some sales of organic Fairtrade vanilla extract, but that work died away for us late last year when Divine switched their supplier.  Also, allied to that, there was no real interest from major chocolate makers for good Fairtrade vanilla as Green & Black's has managed to get a derogation and so uses a non-Fairtrade vanilla extract in its Fairtrade chocolate bars, while Cadbury's Dairy Milk contains industrial vanillin rather than a gorgeous vanilla alongside it's "glass and a half of fresh milk from the British Isles".

Why have we said no to both?  We believe that the next stage for small, ethical food producers is building out our use of the Internet.  We believe that media, communications and shopping will come closer together and over time those specialists with a web presence that has rich media content will be able to more than hold their own against the big behemoths that are the high street retailers.  The key is rich, unique content and the creation of web personality, rather than just being a database of products loitering on the world wide web. 

Why can small businesses like us succeed? (a) we have a personality that is not created in the marketing department; (b) software and technology is free and open on the Internet ranging from blogging tools to Twitter and via Youtube, which will kill any uniqueness that big business gets from their technology investments as it will all become free - look what the Internet is doing for newspapers and music and watch it creep out into the physical world; (c) who really would want the hassle of managing a portfolio of expensive freehold/leasehold property like Tesco or Sainsbury or Whole Foods or Holland & Barrett which cannot be moved around nor is it being constantly advertised as in the retailing etherworld?