Tesco’s John Kirkpatrick interview: Putting the customer first

John Kirkpatrick, Tesco agriculture manager for poultry and eggs, reveals the retailer’s top priorities amid shifting welfare demands. 

John Kirkpatrick is Tesco’s agricultural manager for poultry and eggs. He describes himself as a farmer within Tesco, having grown up on the family beef and sheep farm in Northern Ireland, now a fourth-generation operation. He studied agriculture at Greenmount Agricultural College and then went on to study poultry at Harper Adams university.

Kirkpatrick initially joined the civil service with the Scottish Government’s environment & rural affairs department as an agricultural policy advisor, before returning to Northern Ireland aged 22 to work in poultry production at chicken processor Farm Fed, which was wound up in 2006.

In the five years he has been at Tesco, Kirkpatrick has been positioned at the interface between retail and farming. Although he’s firm about where his priorities lie – “delivering for Tesco customers” – it’s clear he has an instinctive empathy for producers.

John Kirkpatrick pic

Compromise is one of his favourite words. And he’s had to deliver it in spades this past year, not least in helping to deliver the new barn egg standards, which were signed and sealed by BEIC Lion in November 2019 for its egg packer members.

It was a fiendishly complicated process, with many competing interests. Tesco had been clear it wanted an industry-wide standard for barn egg to replace eggs from enriched cages, which all the UK’s main retailers have opted to stop selling before 2025.

What was less clear was what barn should look like, given some stakeholders had suggested simply removing the fronts from the cages as a low-cost option. In the end, this was considered unviable and a higher welfare open aviary barn standard was agreed upon.

Tesco’s two main egg suppliers Glenrath and Noble Foods are now investing heavily in converting their caged systems and combi cages have been banned under the Lion barn standard.

The importance of an entry level egg

Kirkpatrick says the process was far from straightforward. Back in 2016 when Tesco decided to move away from cages, there was a debate about whether retailers should shift to 100% free-range. In recent months, it’s emerged both Sainsbury’s and Morrisons have decided to go down this route.

“We took a very different view,” says Kirkpatrick. “Going 100% free-range wasn’t right for our customers, it didn’t really drive the proposition in the right way and offer the value our customers desire.”

He cites the risk to business continuity of a disease outbreak, which is harder to manage on free-range units, and the “welfare metrics coming out of free-range at the moment”.

“And if we look at it from a land use perspective, looking at the amount of feed we are having to put into free-range birds versus put into barn, barn was a good sustainable and efficient compromise.”

Serving the poorest people in the country with an affordable egg is another key factor. At the BFREPA conference in October last year, Kirkpatrick delivered a talk that focussed on the most vulnerable customers Tesco serves.

“There is a hard core of Tesco shoppers for whom price is really, really important,” he told delegates. “These are people with a £12K household income a year. That customer has really stark choices to make in their food shop. These are consumers who will switch for a penny; they notice that on shelf.  We as a food retailer need to be responsible. For the entry shopper, price is their first priority. They have very little disposable income and we have a duty of care to that customer.”

Getting to the standard

Once the choice had been made to pursue a value egg to replace cages, the priority was agreeing a standard that would be sustainable for the long-term.

Working with its egg supply base Noble Foods, Glenrath and Skea Eggs, as well as the wider industry and Compassion In World Farming (CIWF), Tesco looked at how different countries around Europe produce barn eggs sustainably and affordably.

“We looked at many different systems,” says Kirkpatrick. “We needed to make sure it was a sustainable offer for them, not just a short-term offer. That is why we took as long as we did, we took three years, to look at the science, to look at the evidence, to look at the production from those systems, to look at the commercial output from those systems as well to really get to understand what those systems are capable of.”

Another essential component was getting the mark of approval from a welfare NGO, in this case CIWF.

Kirkpatrick describes this process as extending to CIWF “an invitation to the table” rather than seeking its approval. He said CIWF was asked to “come and sit and have a grown up conversation with people who are key stakeholders in this conversation who have got skin in the game, who are investing in this sector, who are aligned to us as a retail business, and really work out what is the right thing to do.”

This process has, he admits, been “challenging”. “My job in the last three years has been to collaborate with suppliers, with NGOs, with our business to really get in and understand the nuts and bolts of what the proposition would look like to work through the standards with the certification body Lion, and also to get agreement from CIWF and it was challenging.

“One of the meetings I had was with subscribers of the BEIC Lion. And I sat beside Mark Williams from Lion and Dr Tracey Jones from CIWF.  Never before did I feel like I would be sat with people with such opposing views. But we worked together, we collaborated, we listened, we understood the challenge, and we worked very effectively as a group – industry, welfare NGO, retail – as one group to deliver what we believe to be a sustainable offer for customers.”

Kirkpatrick pays tribute to the way CIWF was prepared to work closely with industry. “They have been a lot more considered in their approach than other welfare NGOs,” he says. “They have come in and have actually listened to some of the challenge areas we have talked about. Other NGOs tend to be very focussed on an end objective and really don’t understand the intricacies and detail of what we are trying to do in terms of serving a customer and making sure we have a healthy, sustainable, affordable supply chain, that delivers for all customers, not just a privileged few.

“And I believe CIWF has really understood the challenge that we face as a business, in shell and in liquid. And I think the relationship is a trusted relationship, challenging yes, but trusted, and a respectful one.”

Long term sustainability

Now the standard has been agreed, the packers are converting their operations. This is not cheap. The estimated cost of conversion is between £18 and £20 per bird. Noble Foods, working with Vencomatic on its equipment has invested in new aviary barns and also in its rearing farms. Glenrath is well underway in converting its colony cages, with Big Dutchman providing the equipment.

The extent of the investment means packers need long term commitments from Tesco, and Kirkpatrick says he is prioritising “the long-term sustainability of our sector” with feed linked contracts between three and five years. “I would envisage that would continue, I don’t see that changing,” he says. “So, the commitment to our farming supply base is there.”

For those producers who invested heavily in colony cages less than a decade ago, this may be hard to swallow. But Kirkpatrick says producers with older units were actively seeking guidance about where the market was heading.

“We were getting to a place with some of these colony cages where they were coming to the end of their useful life. So, I had suppliers talking to me prior to their extraction saying, look, where do we go next?

“One of the challenges that has been put to me is that some are within useful life still. And what I would say to that is, we’ve still got until 2025 to covert. While there is conversion going on now, to meet the demand, we still have until 2025, so those cages will still get a full life up until then.”

And of course, within the wholesale market, caged egg will still play a role for those who can’t or don’t want to covert, he adds.

Liquid plans

So, what are Tesco’s plans for converting liquid egg out of caged production? “It’s something I’m working on,” says Kirkpatrick. “Where do we go with liquid? Two years ago, I modelled our entire liquid pool for Tesco, so I have a solid view on what that looks like. I have done that piece of work again very recently. I am now looking at a timeline, as when we convert that to barn, whether that should be 2025 or whether than should follow on later.”

He says he is now working with Bord Bia in the Republic of Ireland on a project to covert some production to barn. If and when all liquid production is switched to barn is as yet undecided. “There is no significant pressure at the moment. However, I am not complacent and I’m clear there is a piece of work to do there,” he says.

Better Chicken Commitment

The other major issue affecting poultry at the moment is the Better Chicken Commitment. Tesco made news last autumn when it was revealed it had decided to launch a new range of indoor-produced fresh chicken, with 30kg stocking densities, marketed as an RSPCA Assured higher welfare option.

Tesco already offers Finest Free Range Corn Fed and Organic chicken, and shifts in excess of 100,000 per week of organic. The decision to launch another higher welfare tier was therefore “a really interesting discussion”, Kirkpatrick says.

He sees the range as being “an opportunity to talk to a customer that is not prepared to step up to Finest but wants to have higher welfare, so moving away from the 38kg stocking density Red Tractor product to a 30kg RSPCA product.”

A lot of criticism aimed at the Better Chicken Commitment from the likes of the NFU is that there is no clear evidence base that shows lower stocking densities automatically lead to welfare benefits. Kirkpatrick takes this seriously and has commissioned some animal welfare trials. Alongside this is Tesco’s Welfare Outcome Measure reporting that suppliers have been completing and this is now in its fifth year which will help inform decisions. “These will be useful to challenge the so-called science and evidence going forward,” says Kirkpatrick. “That is very important because it allows us as an industry to move this forward.”

The challenge is a lot of scientific data is historic, from ten years to 15 years ago, he adds. “There is not enough science that reflects the bird, the diet, the genetics have changed very significantly. The housing and the management of the birds has changed significantly.”

Although there is significant unease about welfare NGOs leading the direction of travel, Kirkpatrick is clear it’s consumers who are pressing Tesco to offer higher welfare chicken.

“We are not in a position of do nothing,” he says. “It is a proactive move to demonstrate clear retail leadership to our farming base and our customers. We are listening to customers and customers are talking to us about health, sustainability, affordability and animal welfare. We have listened to customers, so it will be interesting to see what the customer response is.”

Customer first

And as Kirkpatrick notes, it’s the customers that need to be front and centre in any discussion. He emphasises Tesco wants “to be working with long term strategic partners who are aligned with us and are very customer-focussed.”

“I spend a lot of time with farmers talking to them about what their expectations are of retail and I work extremely hard with our business to make sure we are trying to align with what they require. I am the commercial interface between Tesco, the farming supply base and processors and packers and that sometimes is a challenging place to be but at the end of the day I have a commercial business I work for I am clear in my expectations.”

The relationship he says, means the whole supply chain can invest for the long term and create sustainable businesses. “It is a very open, honest transparent conversation. It’s got to be. If we look at the relationship we have with the NFU for example, it’s an excellent relationship, very strategic, co-operative partnership, really driving value for the farmers that supply us, not just the three major integrators that work in partnership us, but also for the wider industry.”

It’s partly for this reason he believes the growth in dominance of limited range retail, has been damaging. Their low -cost model with contracts repeatedly put up for tender has “cannibalised significant value from the supply chain and that has been a challenge for all of us, including the big four.” Tesco, he says is committed to working with its supply base for the long term, so “not short-term promiscuous deals that really deliver for nobody in the supply chain.”

That strategy will continue at Tesco, he says. Last year has been one of uncertainty for many in agriculture, but the clarity of December’s general election result and the certainty that Brexit will go ahead in 2020 means the industry can start to look ahead. “Agriculture is a long-term business and we have got to be very minded of that,” says Kirkpatrick. “I think now there will be considerably more clarity than there has been previously and hopefully things will move forward to keep British agriculture at the forefront and continue to deliver healthy, sustainable and affordable products for customers.”

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