Riverford Organic Farmers has announced price hikes across its site at an average of 5.6% in a bid to support producers in its supply chain.
The fruit & veg delivery box company announced its second price rise in a year to consumers via a newsletter earlier this month, amid a continuation of the high production costs that have blighted the sector over the past year.
In a letter titled “the inevitable price update”, founder Guy Singh-Watson wrote that input costs had increased substantially, particularly in the labour market, and it “would be fantasy not to expect growers to recoup at least some of that in price increases”.
“Somehow we must start rewarding people for doing useful stuff,” he added, though Riverford also stressed some items had remained at the same price or had even decreased.
According to Lucinda Turner, Riverford commercial director, the company had “absorbed as much as possible and made sure that we are still paying a fair price to the farmers as well”.
Turner this week told The Grocer that the 5.6% average hike represented the lowest possible increase it could offer its customers and was a “genuine increase” that was required to sustain its “committed long-term relationships” with farmers.
“It is about fairness to farmers, fairness to real living wage co-owners, growing veg in the right way for the environment and that comes at a cost,” she said.
The company chose to warn consumers through a letter as its “approach has always been transparency and honesty and our customers trust us to make the right decisions”, Turner added.
Riverford also announced a 5% price increase last September, meaning that overall year-on-year prices are up 10.6%, which is still below average food price inflation for the period.
She said that “most customers are understanding the reason” for the rises and have seen “what actual food inflation has been”.
“I think a lot of our customers are looking at our prices as the true price of food and they recognise that the price you see in supermarkets for example, that isn’t the true price,” she added. “It doesn’t take into account has the farmer been paid fairly, was there a real living wage worker that helped pick it and pack it, what about the health benefits of not having pesticides?
“There are all these hidden costs in food and people that shop from us do get that.”
Last month Riverford became employee-owned, which saw Singh-Watson sell his final 23% stake in the business, meaning 100% of the company’s shares will now be held by the Riverford Trust for the benefit of its employees.
“We have got no plans for further rises in the future and we hope this rise allows us to keep our prices steady for some time,” Turner said.