危 wēi danger
For Riverford Organic, a UK-based organic food producer, selling to the increasingly powerful large supermarkets would potentially be painful – the big 4 retailers hold all the cards. Although the nationwide supermarkets unlock volume, it comes with serious pricing and supply control pressures.
机 jī opportunity
Riverford Organic found a way to sidestep these dangers – they started selling ‘vegetable boxes’ straight to the consumer. This also enabled them to celebrate their seasonality, predict demand better (by setting up many customers on a direct debit) and to communicate directly to the end consumer. In order to meet increasing demand Riverford also set up a co-op with other organic farms – enabling them to deliver to 20,000 homes in 2005.
- shifting the pricing model to subscription from units to make the customer stickier
- dropping a step from the value chain, perhaps even the retailer