Wensley's world

A combination of domestic and global factors have seen some massive increases in the price of meat in the past 18 months, putting many in the industry under severe pressure.

Gerry Wensley, managing director of Fairfax Meadow, one of the largest catering butchery companies in Britain, does not look like a man under pressure, although he has been in the eye of the present economic storm. He stops short of saying the trading situation over the past 18 months has been "traumatic", opting, instead, to say: "It has been a testing time."

The comment is mastery of understatement, as his explanation underlines. "The past two years have been the most 'topsy-turvy' I have experienced in more than 40 years in the trade. We've seen price increases of up to 45%. At one stage last May, we sat down with our buyers wondering if we were going to run out of meat. We even wondered if we'd have to start rationing supplies. Everyone in this industry sat down with their head in their hands at the time. What we all experienced was not predicted by anyone."

The market has calmed since then, but at the time it seemed surreal, admits Wensley. Although prices have stabilised for now, Wensley believes there are still tough times ahead for many in the industry. "Personally I think the end of this year is going to be tough," he says, speaking before the Christmas rush. "People will tighten their belts much earlier as they save up for Christmas. They'll spend a bit over Christmas and New Year, as they always do, then they'll tighten their belts again for a long time after, perhaps almost up to Easter."

Wensley says Fairfax Meadow is well-placed to weather the current economic downturn because of a talented team that he rates as some of the best in the business. He has respect for competitor companies, too, saying that there are not only a few other similarly well-run, well-known firms he mentions Russell Hume, Aubrey Allen and Nigel Fredericks but also plenty of smaller companies in the sector that are really good operators. The quality of the competition and the volatility of the market in which catering butchers work make for a cut-throat environment that keeps everyone on their toes. "We all operate on tight margins, given the amount of work and skill that goes into obtaining, preparing and delivering the products we sell," says Wensley. "But if you are too dear in this industry, the customer makes you work very hard."

Hotels, restaurants and pubs, along with schools and other institutions that serve food, have all been rushing headlong to their suppliers, demanding menu changes to cope with price increases caused by short supply and fewer customers coming through the door.

Wensley understands their need to make changes. "Our customers have been trying to keep bums on seats, so I don't blame them for wanting to make changes. A number have reduced the size of portions to offset the dramatic increase in price, particularly in the price of beef. Customers are getting used to smaller portions when they eat out."

The beef fillet, until recent times a staple of the foodservice trade, has virtually disappeared off the radar. Fillets, rumps and rib-eyes have been the cornerstones of many menus, but not any more. "Chicken has benefited," says Wensley. "Forequarter cuts are not replacing hindquarter cuts as much as a lot of people think they are. People are choosing gammon steaks rather than rumps."

changing demand

While the worsening domestic economy led to a cutback in the number of people eating out in 2009, it is political, economic and demographic events globally, as well as in the UK, that have led to dramatic price increases and shortages of meat in Europe. Wensley acknowledges that a number of factors have led to shortages and steep price rises. In the UK, farmers aged in their 50s and 60s are continuing to quit the industry, putting pressure on supply. Supplies from abroad have been volatile. Foot-and-mouth disease, reduced herd sizes and fewer livestock farms in Brazil, along with tougher European import rules for its beef have contributed to the problem. Farmers are also getting out of livestock in favour of crop production in Argentina.

A more profound, slowly evolving change has been the growing demand for meat in new parts of the world. "As people in some parts of the world become more affluent areas such as the Far East and China in particular they are starting to eat meat or buying much more of it," says Wensley. "Meat is now going to some parts of the world where it has never been before. Some of these factors have led to the almost bizarre situation in New Zealand, for example, where the national flock is declining because of drought and there is a switch into dairy production, but demand for lamb is rising because of the opening-up of new markets in places like Asia."

The current situation means the UK and many other European countries are effectively bust economies compared to the boom of the last 15 years or so, when virtually year-on-year increases in the number of people eating out were the order of the day. The tide began to turn in 2007, and came roaring in during 2008.

Wensley admits that sustained growth and changes in lifestyle have helped Fairfax Meadow position itself as a strong, successful company in the sector. "Back in the 1970s, it was mainly the affluent middle-class who ate out. When you drive down the road now, you see all types of people eating and drinking."

The company, which now employs 480 staff at three factories and four distribution sites around Britain, went through a number of owners and changes of direction during the 1980s and '90s, with Wensley at the centre of them all. His time in the trade goes back way before the Fairfax name first came to prominence in 1973, when he and accountant Adrian Bazar bought a number of butchers' shops from Dalgety. The new firm traded as Peter Fairfax.

A strategic change came about four years later, when the decision was made to move from retail into catering butchery. Two plants were established in Great Yarmouth and Birmingham and, in the early 1980s, a site was opened in Finsbury Park, London. Fears over the increasing amount of regulation in the industry led to a sale of the business to Pyke Holdings in 1983. Hillsdown Holdings bought it shortly after and also owned another meat firm called Meadow Farms and this was rolled into the other businesses to create Fairfax Meadow, with Wensley as managing director. He says: "I've either owned or developed a fair bit of the company, so I've always treated it as my own business."

Before BSE hit in 1996, Fairfax Meadow was turning over £100m, a far cry from Wensley's first start in the trade. "I was born over my parents' butcher's shop in Camberwell, south London. In fact, I was born on a Thursday afternoon, which was half-day closing, so it was a bit of a family joke. We lived over the shop. My father died when I was 12 years old and my mother continued running the shop. I grew up in the shop and, fortunately, I grew up liking it."

He worked in the business until he was 20, when he got a sales job with Weddel and found himself working with well-known industry veteran and current chairman of the Butchers' and Drovers' Charitable Institution Dennis Clark. Over the next few years, he had various jobs on Smithfield Market and in butchers' shops in south London. Eventually, he went back to Smithfield as a buyer for Peter Dumenil, where his boss was Graham Sharp.

business upheaval

The BSE crisis of 1996 caused massive upheaval for all meat companies, of course, and it was no different for Fairfax Meadow, which disposed of parts of the business, reduced its turnover and reorganised its senior management team and board.

Hillsdown Holdings sold Fairfax Meadow to Argent Group, with David Gray as chairman, and, hand in hand with the growth in eating-out, the company has gone from strength to strength.

Wensley believes some companies are stuck in the rut of doing what they have always done. Fairfax Meadow, he says, has always been forward-thinking in the areas of automation, IT and product development.

The industry has come a long way since the 1970s era of non-refrigerated delivery vans transporting prawn cocktail, steak and Black Forest gateaux. Wensley insists that his butchers today are as skilled at preparing meat and added-value products as they ever were, although they no longer break down carcases; all meat is prepared from delivered-in primal cuts. More effort now goes into added-value.

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