Challenges in Power-Imbalanced Food Supply: the UK Case of Small, Specialist, and Niche

Chapter 3_5: Challenges in power-imbalanced food supply: The UK case of small, specialist, and niche fresh produce relationships

By Martin K. Hingley,1 Allan Revill,2 and Adam Lindgreen3

Keywords: channel power, small business, intermediary, fresh food, relationships

1 Professor Martin Hingley, Lincoln Business School, University of Lincoln, Brayford Pool, Lincoln LN6 7TS, UK, E-mail: [email protected] Tel: +44 (0) 1522 835683. 2 Mr. Allan Revill, N. E. Revill and Son, Sandford Farm, Severn Stoke, Worcestershire, WR8 9JE, UK, E-mail: [email protected] 3 Professor Adam Lindgreen, Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive, Cardiff, CF10 3EU, UK. E-mail: [email protected] Telephone: + 44 (0) 29 2087 6668. Introduction This chapter seeks to identify and clarify successful business developments by specialist and niche businesses in the UK fresh produce market, related to the management of supplier–buyer relationships, and then relate the findings to the study of power-based supply chain relationships and networks. The focus is on the issues and challenges that face specialist suppliers when they work to improve their relationships with buyers. Serving a pivotal function in the link between primary producers and dominant retailers, channel intermediary organizations source from suppliers and then deal directly with supermarket retailers. This chapter will detail an enquiry, based on personal, in-depth interviews with the commercial directors of typical fresh produce intermediary businesses, into the best routes to market for small, specialist, and niche suppliers, as well as their best methods for managing channel and network relationships. Specifically:

1. Can satellite specialist suppliers manage channel power issues and business relationships despite their distance from the market?

2. What can specialist and niche suppliers offer, compared with large or generic suppliers? 3. How might small specialist suppliers benefit from learning about the mechanisms of business relationships? The following discussion thus features implications for relevant academic theory, as well as practice pertaining to small business development, in relation to the management of supplier–buyer relationships. The competitive environment for small, niche fresh produce suppliers In most developed economies, powerful supermarkets dominate the purchases of fresh food products, which are mostly unbranded by any supplier and marketed under the retailer’s identity. The UK fresh produce market (encompassing fruits, vegetables, salads, and herbs) has undergone rationalization, driven by retail chains, such that current suppliers have decreased in number, at both the intermediary level and in the form of small, specialist suppliers (growers). Hingley suggests that the progressively expanding a policy of reduced sourcing and preferred supply began to accelerate in the 1990s, under the designation category management (CM).i Thus, the fresh produce industry shifted from a horizontal to a vertically aligned network, supplying retailers through just a few growers, agents, and mediators, on the basis of CM principles. Retailers continue to seek ways to reduce costs in the supply chain and increase the value offered to customers, by being responsive to their demands, such that they require better supply continuity. In this structural alignment, a preferred supplier (or “super-middleman” that undertakes a vast breadth and depth of provision activities on behalf of its customers, the retailer chainsii) takes responsibility for the entire supply chain of a product category (including outsourcing to growers and suppliers), to maximize sales and profitability for the retailer (and, by association, other suppliers), by adopting an end consumer orientation. However, the existing, non-preferred suppliers must find a new strategy or else risk losing out to competitors, because they end up competing even more fiercely in a market with already low price returns. This deliberate retail strategy, to lower consumer prices and reduce suppliers’ margins, has taken its toll on both small and large independent UK growers.iii

Through rationalization, traditional, multiple competitive forms (i.e., many suppliers competing horizontally for many retail customers and outlets) have been largely replaced by vertical coordination by a few, large retailers that engage with select, large suppliers and value-adding intermediaries. Although for large, mainstream growers, this coordination can lead to “a more positive frame, encompassing collaboration, joint problem solving, and strategic supplier and distributor integration,”iv CM also has had profound impacts for smaller specialist and niche growers/suppliers, leaving them in a far more precarious situation, because they get reduced to mere satellite growers of the preferred intermediaries and removed two steps from the market. However, little research addresses smaller suppliers and their first-tier dealings with intermediaries of the retail market, including their routes to market and strategies for managing channel and network relationships. These specialist suppliers do not fit with a classic CM model (which focuses on category leaders at the retailer or large-scale supplier level). Ignoring them also may be a strategic error for large buyers; it is often the small, specialist, niche suppliers that produce innovations. Such a role is especially pertinent in unbranded sectors, such as fresh produce, where small suppliers can achieve both flexibility and key products to facilitate retail market differentiation.v Category leaders with large suppliers are keen to develop new and differentiated products, offer new product innovations and diversifications to existing supermarket customers, and maintain or expand their preferred supplier status. However, such goals often require global or large-scale supply sourcing, which rather perversely may exclude small-scale, local specialists. Extant literature notes the power imbalance in business-to-business vertical supply chains, including those in agrifood and retailing supply channels.vi In 2013, Philip Clarke, then-CEO of Tesco, the UK’s leading retailer and food buyer, announced “the most radical change between a retailer and producers that has been attempted,”vii arguably in response to a horsemeat contamination scare that rocked supermarket supply chains in Europe. The resulting attention also brought CM policies into focus. For example, Clarke admitted that they “haven’t always approached relationships with producers in the true spirit of partnership” and determined to change them for the better. He announced a series of measures to create a supply chain that would give customers complete confidence, in a speech peppered with terms such as “partnership” and “supply chain transparency.” Yet these promises must be considered in light of Tesco’s weakened financial performance and market share decline, as well as its powerful need to reestablish customer confidence. They likely say more about the company’s desire to alleviate consumers’ fears of food contamination, created by opaque supply chain arrangements, than to address suppliers’ fears of price squeezes, which might have led some desperate suppliers to cut corners or engage in illegal activities. Supply chain relationships and intermediaries In prior research into the nature of supplier–buyer relationships and the influence of power,viii some authors argue that power is central to any study of these relationships.ix Cox investigates the debate from the buyers’ perspective, suggesting that the most “appropriate” way for buyers to manage commercial transactions with suppliers depends on their power and leverage circumstances.x He also argues for a deeper understanding of the changing roles between buyer and supplier and procurement strategies, to ensure better rewards in the future. One model of the attributes of buyer and supplier power suggests that the relationships may be governed by their position on a matrix, which leads to buyer dominance, interdependence, independence, or supplier dominance.xi However, a different approach defines power as dependence, punitive capability, non-coercive influence strategies, and punitive actions, in which case the latter form constitutes the antithesis of trust.xii When punitive action occurs, power imbalance becomes intolerable (i.e., the final straw, such that a dominant buyer takes punitive action against a supplier for failing to meet specified targets or service levels). Therefore, these exchanges cannot be considered partnerships, and instead, retailers use the power imbalance to retain control of their “mini-fiefdoms.”xiii

For example, UK dairy farmers face the threat of business failure due to power imbalances in their market. Retail chains use milk as a low priced, commodity enticement, and the price cuts they demand from producers cause small farmers’ production costs to exceed their sales receipts. Legislation is starting to catch up with the previously unregulated food supply sector. The newly appointed Groceries Code Adjudicator sits in independent judgment on complaints from suppliers about treatment by retail buyers, including abuses of power and unfair practices,xiv such as delayed payments to the suppliers or even demands for upfront payments from those suppliers to support better in-store positioning of their goods. Such tactics can have particularly profound and negative effect on small businesses. Yet this regulatory body has little power; it relies on public sanctions to highlight retailers’ abuses of power. The large-scale upheaval of the UK agrifood industry and initiatives to address its problems, notably at the production end, also has led to some assumptions that retail channel power imbalances are standard, or a ‘normal’ phenomenon that do not necessarily result in unstable relationships.xv Suppliers then should simply factor this imbalance into their dealings with buyers in pursuit of their business objectives.xvi Yet as Cox explains, the degrees of power in different exchange circumstances can change and fluctuate, even in an ongoing relationship. A business’s response to the influence of power thus must match the particular and changing circumstances it faces. In supplier–buyer relationships, Cox highlights the vast misunderstanding between the two parties, arguing that more research is needed to comprehend and achieve appropriate relationships.xvii Hingley concurs, explaining that though an imbalanced relationship can work, it requires clear understanding between the parties.xviii No studies to date explain how small and specialist suppliers fit into these relationships though. Therefore, this chapter aims to explore power and business development in the intermediary supply channels inhabited by small and specialist food suppliers. To highlight and understand the issues and challenges facing small and specialist suppliers in achieving better relationships with their buyers, and specifically the mechanics associated with allocating appropriate resources to managing supply channels that also contain intermediary buyers and large retailers, we pursued a primary investigation, with an interpretive research approach. In-depth interviews provided insights into the attitudes of the supplier intermediaries, who constitute a relevant focus because of their status as the principal bridge from small, specialist, and niche suppliers to large retailer chains. In this function, they serve as a hub of understanding, bringing together small-scale supply and large-scale end customers. Interviews with the suppliers could not have provided a similar overview of the supply channel. The semi-structured interviews included six commercial directors from multiple fresh produce marketing organizations that matched the “super middlemen” definition, as we detail in the Appendix.xix They broker and consolidate a wide range of products sourced from diverse suppliers. They also are responsible for all operational and some strategic trading issues for their large retailer customers. The unit of analysis therefore is the relational level, because the participants represent the same sector but different fresh produce intermediary organizations that seek to add value and market products. To ensure their anonymity, we provide general descriptions of the companies and refer to the informants as, for example, Commercial Director 1 (CD1). The sampling relied on both purposeful and snowball methods, using existing contacts of known commercial directors to find additional participants, as required. All the participants and their organizations have functioned in the fresh food industry for at least a decade. The interviews were recorded and transcribed, then analyzed using thematic coding to identify comparable issues and challenges. The textual analysis of the interview transcripts involved a search for patterns of either consistency or inconsistency. All respondents were encouraged to express their perceptions of the nature, implementation, and monitoring of their business relationships, in particular with regard to issues of supply, power, and mutual interest for both parties, as well as whether any imbalance of power or mutual self-interest arose between the supplier and buyer. Fresh produce supply from an intermediary perspective From these interviews, we identified several common themes and structures. Tables 1–3 summarize the key findings, according to our three main research questions, using illustrative quotations. Thus the tables are designed to be read alongside our subsequent commentary. Can satellite specialist suppliers manage channel power issues and business relationships despite their distance from the market? Table 1: Imbalance of power in the supply chain for specialist suppliers

Findings Illustrative Quotation

Buyers dominate (as proxies of The problem is suppliers deal with one own-label retailer customer and have no other the ultimate retailer customers) options but to supply, because there is nowhere else to supply that product. (CD 1). over the specialist niche suppliers. Suppliers live with If the quality and price were good enough [from the niche supplier], then we would the imbalance, despite high take the negotiation forward…. Talk about yield of expected crop and agree the buyer demand for their niche grower’s expectations. (CD 3). products. Small suppliers are usually important accounts to us. They normally are very committed to us as we are very important to them, as we represent a large share of their business. An assumption is made [by suppliers] that power imbalance exists, which the Powerful intermediaries exploit buyer relishes. (CD 2) their positions and implement punitive actions. Huge imbalance—you [the supplier] will agree their [the ultimate retailer customer] prices or you will not supply … it’s that simple. (CD 1)

One of our current suppliers had dropped his other customers in order to favor us. If a The remedy is spreading supplier lets us down on supply ... they will lose their program or have their program exposure to risk. reduced to say 20% the next year/season. (CD 4).

Don’t have all your eggs in one basket…. Not more than 25% of any one product to one customer. (CD 1)

Suppliers are encouraged to live Small niche businesses need help and walking through the process [but it] depends on with the imbalance. But how much you need their products. (CD 1) intermediaries also want routes to sustainable “partnered The sales team could go out into the market and buy a lot harder for, say, the next year growth” with suppliers. on all lines, but it would only be in the short term. The prices we paid would not be sustainable, and the next year those suppliers might not be in business…. It’s not sustainable [to drive too hard a bargain with suppliers], and we would lose those suppliers, and they would not be happy as they were not treated right (CD4). Negative response to small One small carrot supplier could not understand the technical side or our expectation of suppliers and their lack of the business, both at the service level and specification level. The relationship did not understanding of the work and after one year we parted company. Other suppliers have tried, but the mechanisms of the supply chain business did not come to much in terms of volume and did not carry on the next year, that serves retailers. in my opinion due to a lack of understanding on the suppliers’ side. (CD 4)

Living with an imbalance of power for sustainable future growth All of the interviews contained some specific reference to an imbalance of power, in favor of the intermediary (and through them, the retailer buyers) over the small niche supplier. The informants believe that the small suppliers tolerate this situation, as an acceptable consequence of entering into the business. They contend that suppliers benefit from sustainable growth by developing closer working relationships in channel partnerships, though not as equals. A general view indicates that many small and specialist suppliers are disappearing, because the most successful of them do not remain small but rather grow their businesses in parallel with their intermediary customers. The interviewees could identify various, once small supplier companies that had grown into larger suppliers, with the same crops. In contrast, another described trend featured small suppliers forming alliances with more mainstream suppliers, to overcome the difficulties of remaining competitive in only niche product areas. These small suppliers have grown disillusioned with their trading position and either left the industry or joined alliances with larger, independent, mainstream suppliers. One intermediary (CD4) complained about such developments, because they shifted the balance of power to a monopolistic grower. In this example, the large supplier was actively purchasing or forming alliances with small and niche suppliers, increasing its business through mergers and acquisitions, and monopolizing many specialist product lines in the process. In turn, the number of small, specialist suppliers available to the intermediaries decreased, which meant that they had to pay higher, albeit negotiated, prices for product lines that they could not procure from anywhere other than the large supplier. The decline of small, specialist suppliers and first-tier rationalization therefore created threats to the business of the product- consolidating, second-tier intermediaries. High demand for new niche products The massive demand for new, niche produce products emerges as key to survival for the small, specialist suppliers and their customers. The perceived rewards are high; half the interviewees suggest that retailer customers are keen to supplement their existing product portfolio. However, if the supply chain intermediaries no longer want solely a niche presence and demand higher volumes, small suppliers often cannot deliver those volumes. The strong initial profit margins for niche products also attract new entrants to the market. The niche product then grows established, on the path to becoming a more mainstream product. Unless the innovative specialist supplier is prepared to grow sufficiently to meet new customer demand, it will lose market share, sales, and possibly business, especially as more mainstream suppliers move in with their cheaper production costs and economies of scale. Such situations are perennial challenges to all entrepreneurs and innovators, but in the unbranded, non– patent-protected world of fresh produce, it is a particular risk. Punitive action by retailer buyers and middlemen against suppliers Two interviews featured descriptions of punitive actions by retailers and intermediaries against suppliers that failed to conform with their demands on price, service level, or technical specifications. For example, one carrot grower seemingly has little understanding of the business, so the relationship lasted only about one year. In another example, a supplier failed to meet the requirements of a prearranged program, so the retailer cut the order by 20 percent for the next year. Some small suppliers who fall foul of the buyer lose the business altogether. What can specialist and niche suppliers offer, compared with large or generic suppliers?

Table 2: Specialist supplier offers, in comparison with large generic suppliers

Small and specialist suppliers Small producers supply better quality because they can focus and have better are more innovative and reactive understanding. Larger suppliers have varying quality. (CD 1) to change, such that they offer competitive advantage to Small suppliers are able to react more quickly to change and react accordingly as intermediaries. opposed to a much slower change process with a larger mainstream supplier. (CD 3) [Small suppliers are] More innovative and more willing to try new crops that large companies are reluctant to try. (CD 3) Small specialist suppliers have less overhead cost than large Customer service and flexibility are excellent. (CD3) suppliers and are more competitive. They focus on quality, continuity, and important customers.

The suppliers lack geographical [Smaller suppliers] Lack geographical spread. Too small to meet large orders, so need reach and are too small to meet other suppliers to fill the gap. (CD 3). large orders.

Small niche suppliers cannot Full lorries cost 1.5p to 3p per package, but if it is only a half load it can cost 15p per deliver economies of scale, package making [doing business with small suppliers of small loads] uncompetitive which affects supply chain and costly. (CD1) efficiency and transport costs.

Ability to change direction, diversify and innovate In four interviews, the intermediaries designated their specialist and niche suppliers as more innovative, creative, and willing to pursue new opportunities. They expected the small specialist suppliers to take more risks than larger, mainstream suppliers. For example, one interviewee suggested that larger suppliers tend to be more set in their ways and reluctant to change, with a narrow focus on volume, costs, and business expansions each year in the same product lines. Competitive edge Three interviews cite competitive edge as a principle success factor, such as when a supplier is first to market and enters into exclusive deals with retailer customers. A niche supplier can grant the retailer customers a point of difference with rivals, especially if it develops new crops. This provision reduces product commodification and supports premium pricing for high value, innovative, niche crops. However, one intermediary did not find anything different on offer or any true differentiation between niche and mainstream suppliers. Instead, this informant argued that high value, niche products were more trouble than they were worth, because their small volume led to them being excluded from delivery schedules or simply forgotten. Lack of understanding of retailers, poor geographical spread, and diseconomies of scale One interviewee offered multiple examples of suppliers that did not understand the technical side or business expectations in the supply chain, whether in terms of service or specifications. The failure of the relationship seemingly was due largely to the supplier’s lack of understanding of the customer side. Another negative view of small, niche suppliers cites their lack of geographical reach. If a small supplier operates in one county, which suffers adverse weather, it likely has no contingency to deal with its failed crops. A specialist or niche supplier may operate from a single farm, or even one field. Ideally, partners in other geographic areas should provide hedges against total crop failure. In three of the six interviews, respondents noted that the smaller, niche suppliers lack economies of scale and increase transport costs, up to five times as much, making the supply chain uncompetitive and costly. Small suppliers thus need to find ways to manage their loads better or consider shared or “hubbed” consolidation of their product supplies with deliveries by other suppliers. How might small specialist suppliers benefit from learning about the mechanisms of business relationships? Table 3: Benefits for small specialist suppliers

A good working relationship Keep with a buyer and an organization you are comfortable with and can do business with the buying organization is that pays a fair price. (CD1) essential. The [intermediary trader’s] sales team could go out into the market and buy a lot harder, but the prices would not be sustainable and suppliers would leave us or go out of business. (CD 4)

Partnered (but imbalanced) Suppliers big and small have grown with us as we have continued to grow, supplying growth for small, specialist us now and for the next 5 years. (CD 4) suppliers. Grow with the organization but not too quickly. Cash flow is more critical than anything else. (CD 1)

If new entries come onto the market and they have a point of difference by offering something new or a cost difference, then we will take a look a look at them. In five year’s time they could be a main supplier to us. (CD 5)

New niche crop products would Niche suppliers get you new business and keep you ahead of my competitors with new give specialist, niche suppliers a products and may get you new customers and eventually get you in with existing foot in the door to larger scale products, as you are already on their system. (CD 1) production. If there is a shortage of supply and it is not readily available, then it’s normally a straightforward process to get in and supply a supermarket that wants your product. (CD 1)

Niche suppliers and growers are more inventive and creative and will have to decide whether they want stay niche with their products in the future. (CD 6)

Small niche suppliers need the Talk to your customers and bang your drum about your products to the end users right small niche markets for through social media sites like Facebook and Twitter. [Organization] redirected and premium returns. diversified their business after talking to chefs about their wants and needs and preferred routes to market. They are now mainstream suppliers in their products. (CD 6)

Niche suppliers need to find the right marketplace; for example herbs like coriander are supplied to [meet the] demand of [Asian cuisine] restaurants in Birmingham. (CD2)

There is no point a being a niche supplier in a mainstream market because that does not work. (CD 2)

To address the difficulty of In my opinion it will become harder and harder to find niche products in the future. innovation in niches, talk to (CD 2) customers, namely, the end users. In reality we are in mature markets and now looking for ideas to re-invent our products with a point of difference and something new.… We need ideas to make this happen. (CD 5)

Sustainable working relationship A good working relationship, even if it is imbalanced, is essential for an exchange between the buyer and supplier to flourish. In an ideal scenario, both parties are comfortable doing business together, such that they provide the supplier some inclusiveness and engage in two-way negotiations, so a long-term, operational relationship arises, with extensive, close collaboration between buyer and supplier. Four of the six intermediaries were keen to point out that they believe they treat their suppliers fairly on price, despite difficult economic times, but also need suppliers who recognize the importance of building and sustaining successful relationships year after year. Development of niche supplier A common theme is the notion that it is up to the specialist to decide whether it wants to become a larger player and grow its business. All the interviews featured some description of a specialist grower that started small and grew into something much bigger, while still operating in a niche market, even over periods of up to ten years or longer. However, the interviews also made clear that maintaining the status quo was relevant to some of the intermediaries, because they saw few opportunities for new niche products (due to inherent risk). It was far easier in the short term to maximize and increase their reliable products and perhaps reinvent them, rather than try something too new. The smaller intermediary organizations instead seemed keen to gain a foothold with retailers by introducing new niche products that promised the potential to grow larger and more mainstream in the future, which would enhance their reputation and sales volumes. In three interviews, the scenario that led to the most successful relationship outcomes involved a niche supplier that started off small and then enjoyed increased demand for its products, such that it grew into a larger, mainstream supplier. These suppliers engaged end users (e.g., retailers, caterers) with their specialist product, so they could determine usage and uptake and directly consider users’ requirements and demand, while simultaneously growing in conjunction with the intermediary. 5. Discussion The intermediary interviews reveal that the majority of specialist, fresh produce suppliers live with a power imbalance that favors their buying customers. However, the intermediaries also have formed positive relationships with these small suppliers and experienced development in their businesses selling specialized crop products, such that they need the innovative offers provided by small suppliers. In a typical business pattern, a successful, specialist, niche supplier decides to grow, to keep up with demand and keep pace with its buying partner. The benefits to these suppliers include economies of scale, cost reductions, technical developments, and improved supplier–buyer relationships. The niche suppliers appear more innovative, entrepreneurial, and faster to react to opportunities in the marketplace than their mainstream counterparts. They offer competitive advantages by adding a point of difference related to their products, whether because they offer new niche products or alter the way existing products can be presented to customers. Yet it is becoming harder to find new niche products; direct engagement with end users (through personal contact, online, or social media) about existing products thus offers an effective means to achieve the potential of both new and niche products. However, once a niche product has been discovered, only a short time exists before the supplier must go into larger scale production, address competitive threats, and deal with acquisitive attempts by larger suppliers. There is no opportunity for market protection through branding and little opportunity for patent protection. Successful niche development thus means the specialist suppliers need to grow to satisfy demand, but the trade-off is lower prices and margins, year on year. If new entrants enter the market with a new product line, they are considered, tried, and tested by buyers, to determine if they are competitive with existing offers or if they can offer better service or quality. These developments have implications for existing niche suppliers, who continually face pressures to grow to achieve economies of scale, as well as competition from new market entrants trying to undermine them by poaching the few available customers as demand for their products increases. Yet in some descriptions, the imbalance of power creates a very negative situation. Some small, niche suppliers would prefer to stay small and niche, which might be fine as a business strategy but often leads to intolerable service failings. The resulting pressure on small businesses to professionalize their customer interactions and divergent expectations of the supplier and buyer (e.g., small supplier’s lack of understanding of the quality, value, and service required by customers) can result in punitive actions by buyers.xx

These responses align with extant literature,xxi in that small specialist and niche suppliers, as well as larger generic suppliers, live with power imbalances. The various stages of expression and application of power in exchange relationships are tolerable, up until the point that the dominant buyer takes punitive action against a supplier for not meeting specified targets or service levels.xxii

Extant literature on business relationships, and notably that focused on fresh produce markets, usually includes just the large mainstream growers, dealing directly with the major retailers, instead of any intermediaries. But as the interview findings of this study show, intermediaries bring an important perspective: Small, specialist suppliers live with power imbalances but also are more innovative, creative, and willing to try new things. The value that they add is critical, because the intermediaries walk the small suppliers through the relationship process. Ultimately the potential for new and niche products is desirable to both intermediaries and their retail customers, because it creates a point of distinction and a potential competitive edge. 6. Conclusions

Living with a power imbalance is part of the small supplier–intermediary relationship. On the whole, a positive, sustainable relationship between parties is the norm. Previous studies offer similar findings about the link between mainstream suppliers and their retailer customers in the fresh produce industry. This chapter emphasizes the delicate, important role of intermediary organizations in moving products from small and specialist suppliers to large retailers. As both the retailer and customer markets have concentrated, it has become increasingly difficult for specialists to engage directly with the market. In general, large retailers do not have the will, interest, or flexibility to engage directly with small, niche suppliers. Therefore, the successful working relationships of small suppliers with their intermediary partners are critically important (regardless of any power imbalance). Extensive studies detail buyer– seller relationships, but less research has investigated satellite relationships, such as those that arise when fresh produce growers are subjected to a retailer buyer’s power, rules, and expectations but do not come in direct contact with it. Instead, their primary relationship is with channel intermediaries. Although the role and influence of such intermediaries is relatively poorly understood,xxiii they serve an important function, in facilitating relationships, reinforcing and mitigating various types of power, and bridging the channel contacts of suppliers and powerful end customers.

Appendix: Intermediary interviewees

Commercial Case A employs more than 500 people. Sales turnover of >80 million pounds. Director 1 (CD1) Commercial Case B employs more than 1500 people. Sales turnover of >150 million pounds. Director 2 (CD2) Commercial Case C employs more than 1100 people. Sales turnover of >100 million pounds. Director 3 (CD3) Commercial Case D employs more than 1500 people. Sales turnover >150 million pounds. Director 4 (CD4) Commercial Case E employs more than 1500 people. Sales turnover >150 million pounds. Director 5 (CD5) Commercial Case F employs about 5 people. Sales turnover is approximately half a million Director 6 (CD6) pounds. i Hingley, M. (2005a), Power to all our friends? Learning to live with imbalance in UK supplier-retailer relationships. Industrial Marketing Management, 34 (8), 848-58; Hingley, M. (2005b), Power imbalance in UK agri-food supply channels: Learning to live with supermarkets? Journal of Marketing Management, 21, 63-88. O'Keeffe, M. & Fearne, A. (2002), From commodity marketing to category management: insights from the Waitrose category leadership program in fresh produce. Supply Chain Management: An International Journal, 7 (5), 296-301. ii Hingley, 2005b, op. cit. iii Fearne, A., & Hughes, D. (2000), Success factors in the fresh produce supply chain: Insights from the UK. British Food Journal, 102(10), 760–776. iv Stuart, F.I., Verville, J., & Taskin, N. (2012), Trust in buyer-supplier relationships: Supplier competency, interpersonal relationships and performance outcomes. Journal of Enterprise Information Management, 25(4), 392-412 v Hingley, 2005a, op. cit. vi Hingley, M., Lindgreen, A., & Casswell, B. (2006), Supplier-retailer relationships in the UK fresh produce supply chain. Journal of International Food & Agribusiness Marketing, 18 (1-2), 49-86; Touboulic, A., Chicksand, D., & Walker, H. W. (2012), Power in large buyer–small supplier relationships in sustainable supply chains. Piccola Impresa/Small Business (2), 13-28; Fearne and Hughes, op. cit. vii Retail Week (2013), Horse meat: Tesco boss Philip Clarke's full speech at NFU conference, http://www.retail-week.com/sectors/food/horse-meat-tesco-boss-philip-clarkes-full-speech-at-nfu- conference/5046777.article [accessed 6/2/15]. viii For example, Hingley 2005a, 2005b, op. cit.; Hingley, M. & Lindgreen, A. (2010), Living with power imbalance in the food supply chain. In Mena, C. & Stevens, G. (Eds.), Delivering Performance in Food Supply Chain, Woodhead Publishing Ltd., Cambridge, 37-57; Howe, S. (1998), Vertical market systems in the UK grocery trade: analysis and government policy, International Journal of Physical Distribution & Logistics Management, 26 (6/7), 212-225; Kumar, N. (2005), The power of power in supplier–retailer relationships. Industrial Marketing Management, 34 (8), 863–66. ix Cox, A., Sanderson, J., Watson, G., & Lonsdale, C. (2001), Power regimes: A strategic perspective on the management of business-to-business relationships in supply networks. In Håkansson, H., Solberg, C.A., Huemer, L., & Steigum, L. (Eds.), Proceedings of the 17th Annual IMP Conference: Interactions, Relationships and Networks: Strategic Dimensions. Norwegian School of Management BI, Oslo, 9–11 September. x Cox, A. (2004), The art of the possible: relationship management in power regimes and supply chains, Supply Chain Management: an International Journal, 9 (5), 346–56. xi Cox, A. (2001), The power perspective in procurement and supply management. Journal of Supply Chain Management, 37 (2), 4–7. xii Kumar, op. cit. xiii Blois, K. (1997), Are business-to-business relationships inherently unstable? Journal of Marketing Management, 13, 367–82. xiv Groceries Code Adjudicator (2015), www.gov.uk/government/organisations/groceries-code- adjudicator. [accessed 6/2/15]. xv Hingley, 2005a, op. cit.; Belaya, V., & Hanf, J. H. (2009), The two sides of power in business-to- business relationships: implications for supply chains. Marketing Review, 9 (4), 361-381. xvi Batt, P.I. (2004), Power-dependence in agricultural supply chains: Fact or fallacy? In Proceedings of 20th Annual Conference of the Industrial Marketing and Purchasing Group, Copenhagen, 2–4 September. xvii Cox, 2004, op. cit. xviii Hingley, 2005a, op. cit. xix Hingley, 2005b, op. cit. xx Kumar, op. cit. xxi Davies, G. (1996), Supply-chain relationships. In Buttle, F. (Ed.) Relationship Marketing: Theory and Practice, Paul Chapman Publishing, London, 17–28; Hingley, 2005a, 2005b, op. cit.; Cox, 2004, op. cit. xxii Kumar, op. cit. xxiii Hingley, M., Lindgreen, A., & Grant, D. (2015), Intermediaries in power-laden retail supply chains: An opportunity to improve buyer-supplier relationships and collaboration, Industrial Marketing Management, in press.