Rows of strawberry plants

Adding value to surplus soft fruits at Brooksgrove Farm

11th December 2018

This case study demonstrates how businesses can transform their unavoidable surplus food waste into high-value products.

Key Facts
50% losses can be fairly typical for strawberries and raspberries due to the weather, losses from “pick your own”, and market forces, which can render picking uneconomic
Converting surplus strawberries into high-value fruit syrups could transform this loss-making resource into a product delivering a net profit of over £200,000 per year

Summary

This case study demonstrates how businesses can transform their unavoidable surplus food waste into high-value products.  

Using the example of Brooksgrove Farm, the case study examines the waste issues that farmers typically encounter with soft fruits and details the process employed for assessing potentially lucrative opportunities for surplus produce. 

Brooksgrove Farm – a 60-acre farm in Pembrokeshire – has been in the Rees family since the 1950s. It is run by Gary Rees who is keen to utilise excess strawberries and raspberries to create a new revenue stream by converting these berries into high value, artisan food products such as fruit syrups, fruit teas or fruit jerky.

WRAP Cymru therefore worked with Brooksgrove Farm to investigate options to develop added-value products from their surplus fruit and to develop business cases for those options with the greatest commercial potential. This exercise identified 10 opportunities for Brooksgrove Farm’s berry waste and has provided them with focussed, detailed commercial information to help them take the next steps to diversify and develop new products.

Introduction

This case study explores the potential to add value to surplus or waste berries generated on farms via a process called ‘valorisation’, using the example of Brooksgrove Farm. 

Brooksgrove Farm is a 60-acre farm located on the outskirts of Haverfordwest in Pembrokeshire. The farm grows a range of seasonal produce including strawberries, raspberries, gooseberries, pumpkins, and daffodils. It is a low-input operation, meaning yields are lower, but costs and risks are minimised. The farm’s produce is currently being sold to local retailers, the wholesale market, and through “pick your own” for the soft fruits.

WRAP Cymru provided direct support to Brooksgrove Farm to research valorisation opportunities for their surplus strawberries and raspberries through an initial options appraisal. The options were scored and ranked based on their suitability for the business and then reviewed with Brooksgrove Farm in detail. Two were then selected for further detailed assessment and the development of an outline business case.

The waste issue

Strawberries and raspberries account for the highest levels of waste at Brooksgrove Farm. This is often due to circumstances outside their control, including unexpected weather patterns and losses from “pick your own”. One of the key issues impacting on losses is market forces. If there is a glut of produce on the market, then prices can drop to the point at which picking is rendered uneconomic. In such instances, berries are left on the runners in the fields to be eaten by insects, birds and animals, or rot back down into the soil. This avoids the unnecessary cost of picking and waste disposal but represents a significant sales loss for the investment in growing the berries. Brooksgrove Farm therefore wanted to find alternative markets through which it could add value to its existing products, without significant levels of investment up-front.

Options appraisal

The aim of the initial options appraisal was to research and explore opportunities for adding value to the berries in a way that is practically feasible and achievable at an on-farm scale. It is also important that any value-adding activity fits closely with the well-established Brooksgrove Farm brand of fresh, healthy, local fruit produce.  

A wide spectrum of potential value-adding options were researched by WRAP Cymru and reviewed in close consultation with Brooksgrove Farm. This information was summarised and the options were scored according to three broad criteria:

  1. The readiness of the technology required to deliver added value; 
  2. The commercial potential of the value-added product; and 
  3. The ability to implement the opportunity practically on site.

Options identified

The options appraisal identified 10 potential opportunities, which fell into three broad categories of product, summarised as follows:
  1. Commodity products: sold to manufacturers as an ingredient with no, or low, use of Brooksgrove Farm brand (e.g. fruit powders);
  2. Branded pure fruit products: sold to consumers, with product differentiation achieved through the Brooksgrove Farm brand (e.g. fruit leathers);
  3. Valued-added products: made by Brooksgrove Farm using its fruit as an ingredient (e.g. fruit syrup) and branding.

This process provided the basis through which Brooksgrove Farm could together evaluate the options and decide which had sufficient potential for the development of a business case. 

It was agreed that the most promising options that were a good fit for the business and its brand were fruit syrups and fruit tea.  

Further business development work was  undertaken for these two options. This case studies describes the business case for fruit syrups as this proved to be the preferred option.

The fruit powder option scored well, but is movied away from the core brand into the manufacture of a commodity; something Brooksgrove Farm was less keen on. 

Business Case

Development of the business case for fruit syrup production

Syrups are used as an ingredient in fruit drinks, sodas and cocktails as well as a syrup / flavouring for coffee, sauces, desserts and ice-creams. They are made from a simple combination of fruit juice and sugar. The fruit should be a little over-ripe as it has more flavour and the juice is more easily extracted, but it must be fresh or the flavour will be poor.

There is the opportunity for Brooksgrove Farm to produce its own brand of fruit syrup using their excess berry produce. This would again fit well with its existing brand of high quality, natural, local produce. 

The market

Further research into this option was undertaken by firstly seeking to better understand the market for the product and whether there is space, as well as potential demand for, a farm-based product of this type within the marketplace. 

The research identified a large market leader and numerous other, smaller niche brands owned by independent manufacturers. Findings revealed that there appears to be space for new niche fruit syrup products in the UK market, if Brooksgrove Farm can demonstrate a strong, clear brand and differentiate itself from the competition.

Production technology

WRAP Cymru, in consultation with Brooksgrove Farm, then looked to understand the process for manufacturing fruit syrup and whether this was something that could be carried out on site without significant levels of investment. The research identified that the technology for production is relatively simple. The opportunity requires limited initial investment in capital expenditure and is scalable, allowing Brooksgrove Farm to test the success and popularity of the product in the first year. If successful, a greater proportion of produce can be dedicated to the production of syrups in the following years.

Brooksgrove Farm anticipates selling the product in corked 250ml glass bottles. There was a temptation for the business to run everything in-house. However, the support from WRAP Cymru identified that, given the limited resources available within Brooksgrove Farm and the large number of bottles of product likely to be produced, it would make sense for them to employ a specialist third party to carry out the bottling and labelling process on their behalf.

Such specialists can also carry out the pasteurisation of bottles for the client. This was agreed to be the most practically viable approach, but further analysis by WRAP Cymru also showed this to be the most commercially advantageous route for Brooksgrove Farm.

Accessing markets

Whilst fruit syrup production is a reasonably simple process, the key challenge for Brooksgrove Farm is market entry, particularly for a business that is new to the niche beverages sector. Brooksgrove Farm already has the capability to sell a proportion of its product via its own shop and website. However, fruit syrups are a highly specialist product and as such Brooksgrove Farm needs to be able to access quite specific sections of the marketplace. 

The research identified third party organisations specialising in supplying brewers, restaurants, cafes, and bars. Whilst these distributors come at a cost, they will be a necessary link into the supply chain for Brooksgrove Farm if it is to turn around product sales quickly and consistently in its first year of producing fruit syrups. This is particularly the case when trying to target niche markets with an un-established brand in a competitive market.

The business case research included a review of other independent brands operating in this space. It highlighted that a key role for Brooksgrove Farm in entering the marketplace will be to establish a strong, recognisable brand that sells the value and benefits of the product. This will be crucial to the successful implementation of this opportunity.

Economics

WRAP Cymru carried out a detailed three-year financial analysis of the business case for Brooksgrove Farm to diversify into fruit syrup production. This took into account multiple variables in relation to both the scale of production and the operational costs. As such, the financials presented Brooksgrove Farm with an illustration through which it could refine its business model as it moved forward to implement the opportunity. 

The financial analysis showed significant potential, even with the involvement of third party support for bottling and distribution. Year three net profit projections have the potential to exceed £200,000

Next steps

Brooksgrove Farm is already underway with implementing the fruit syrup production opportunity. A prototype syrup blend has been developed and tested locally.

The business is currently in discussions with both a distributor and a potential retailer of the product, subject to moving the prototype into commercial production.

With the preliminary business case research in place, through the support provided by WRAP Cymru, Brooksgrove Farm can now finalise the operational business model and the economics around production costs, pricing and the brand. From there onwards, they will be in a strong position to successfully launch their new product to the market.