With consolidation clearly the name of the game in today’s fresh produce sector, it is little wonder that Fresca Group has been able to carve itself a firm position in the marketplace and become a force to be reckoned with.
Fresca was formed in February 2005 from a reorganisation of the M&W Mack group. Still privately owned, it now acts as parent company for eight very diverse businesses, employing 1,000 people overall and generating group turnover of £325.2 million in the last financial year.
The company has set its stall out clearly, according to its latest mission statement: “To be the best supplier of quality fresh produce to the UK; to source, supply, prepare, pack and deliver the finest quality fruit, salads and vegetables at competitive prices.”
And it does this through a number of different outlets, some more established than others. M&W Mack Ltd is the 130-year-old parent company for several separate operations: Mack Wholesale, which works from key wholesale sites across the UK including Birmingham, Bristol, Cardiff, Southampton and Wolverhampton; Mack Multiples, which was established to serve UK retailers with six major business units - bananas and pineapples, salad and vegetables, berries, grapes, melons and stonefruit; Mack Service, a high-care packing facility in Southampton offering value-added fruit salad orders to Somerfield and other retail customers, as well as airline catering and fruit basket products; and Mack International Trading, a primary importer focusing on citrus and top fruit, with access to retail, wholesale and catering customers.
There have been many developments within the Mack businesses in the past 12 to 18 months - Mack Multiples opened a new high-care facility at its Paddock Wood operation in 2006, which is now producing a range of washed and ready-to-eat produce snack packs, including grapes and cherries, while Mack Service has teamed up with London livery company the Worshipful Company of Fruiterers to sell fruit baskets directly to the public, with a charitable focus. Around 50 per cent of its profits are converted into fruit and then delivered to homeless shelters in London each month.
The Mack operations, of course, are well established on the UK produce scene, and have provided the strong base Fresca needed to start looking for opportunities to expand the business into new, innovative areas. Fresca chairman Chris Mack says: “It’s been a busy year in the development of the group, with a lot of work going into providing the business with a broad base for future growth. This work has been underpinned by a very strong performance by the established Mack operations.”
But all eyes in the last 18 months have been firmly fixed on Fresca’s most recent mergers, acquisitions and proposals. Last year, Fresca-owned potato and vegetable supplier DGM Growers Limited entered into a 50:50 joint venture operation with Bakkavor/QV, creating fresh vegetable supplier Manor Fresh in Spalding, Lincolnshire. “The aim there was to put two businesses together, drive some costs down and create a better, more rounded supply of vegetables into Marks & Spencer and Morrisons. We have put together a team which is focused on providing high-quality product into high-quality retailers,” Mike Musk, Fresca finance director, tells FPJ. Sourcing a mixture of organic and conventional vegetables, but concentrating largely on potatoes, Manor Fresh maintains links in Evesham, Inverness, Israel, Jersey and Portugal to ensure year-round supply.
But the Manor Fresh merger was just the tip of the iceberg. MMG Citrus was formed in 2007, a joint venture company owned 50 per cent by Fresca and 50 per cent by Spanish citrus exporter Martinavarro. Headed up by Garry Cirillo, the team operates out of Fresca’s Paddock Wood base, which also houses Mack Multiples and various other Fresca operations.
“MMG was the culmination of a very, very long courtship,” explains Musk. “We have dealt with Martinavarro since 1948, but finally felt we should cement something that had been in place on a handshake alone.
“MMG is about combining the best of the supply base with the best marketing resources we have, thus shortening the supply chain to the consumer and making the process much more cost-effective and efficient for us. A shorter supply chain gives us much more opportunity to be responsive and boost quality, tightening up procurement and logistics along the way. Consumers and supermarkets want to feel much closer to who is growing their produce, and MMG gives them the chance to do this.”
“This business has a competitive edge that comes from its unusual structure, whereby the grower links directly with the importer to remove a layer of cost from the supply chain,” says Mack. “I believe that this new structure, created around an extremely motivated and capable team, offers us a real competitive advantage and could only be created between partners with such a long-established relationship.”
Fresca then moved on to the acquisition trail. In April this year, it wholly acquired Jack Buck Growers, a specialist vegetable grower based in Holbeach, Lincolnshire, focusing on chicory and celeriac, with side lines in pak choi, fennel and artichoke. “This was a very small acquisition - a £4m company with a staff of 55,” says Musk. “Jack Buck is a supplier of niche products, which means it has built up a broad portfolio of customers across the high street. It’s a very interesting little business and we hope we can develop its specialities. The UK consumer is getting a taste for different products, and Jack Buck’s niche lines are very much something we think we can build upon.”
The addition of Thanet Earth to the Fresca umbrella over the summer heralded the unveiling of what will be the largest-ever glasshouse development in the UK. Based in Kent on the Isle of Thanet, Fresca has chosen three Dutch glasshouse growing specialists - Rainbow Growers Group, Red Star Trading and A&A - as its partners for the £80m investment, which is set to add 15-20 per cent to current UK salad production area. Seven glasshouses, each averaging 7.2 hectares in size, will produce tomatoes, peppers and cucumbers 52 weeks a year, selling product via Mack or Thanet Earth Marketing, its own specialist sales arm.
Evesham-based importer Primafruit, a specialist in grape, stonefruit and kiwifruit, became a wholly-owned member of Fresca in 2006. But earlier this month, the group announced the addition of ValeFresh to its companies, a specialist packing and ripening operation to be set up at Primafruit’s facilities. “Our facility in Evesham was not being fully utilised, and has historically been driven by Primafruit’s requirements, which only used 50 per cent of the facility’s capabilities,” says Musk. “Now, in a bid to counteract this and make Primafruit a much more efficient import and marketing company, we have divested it of its packing operations and set up ValeFresh, which will pack not only for Primafruit and Mack but also other companies in the Evesham area.
“Primafruit, meanwhile, can concentrate on what it does best - being a lean, clean importer delivering to its retail and foodservice customers. We are not breaking new ground, in that lots of companies have already separated their packing and import operations - it is just about making our Evesham operations more efficient.”
Fresca supports marketing activities such as the British Asparagus Campaign, which it helps fund, and is trialling PR activities for other products in conjunction with its retail customers. In 2003, Fresca created www.thinkvegetables.co.uk, which was originally set up as a journalist resource to provide nutritional information, recipe ideas and a bank of photography. The site achieved an average of 6,800 unique visitors each month (in 2006), and has expanded to include educational materials and a newsletter.
“We are always looking at other opportunities,” insists Musk. “The produce industry is very well served, but Fresca is starting to say, what can we do and bring to the marketplace that is different. For example, our size enables us to embark on a project like Thanet Earth, which not many other firms could have even attempted.
“All the companies under Fresca maintain a very different focus; for example, Primafruit is customer-driven, whereas Jack Buck, with its niche lines, is very product-driven. The whole of the Fresca business is driven on autonomy - we are an umbrella company, but that umbrella is very thin, and each company has its own entrepreneurs. We are not a big conglomerate where everything is decided at the top. Our passion is for the product, and delivering the best-quality fresh produce in the best way possible.”
“We have to be light on our feet and keep looking at the opportunities. Our strategy is to develop the business in a logical way. For example, Mack Multiples now has a berry unit handling strawberries and blueberries, and that is about developing a new niche business. We saw that opportunity and took it, and that sort of thing is key to driving Fresca Group,” he adds.
The business has three key strings to its bow that give it huge advantages in the marketplace, according to Musk. “Firstly, Fresca is still a private company, which makes it a sustainable proposition,” he says. “Secondly, the people - we couldn’t deliver in our business without our teams of motivated specialists. And thirdly, we are using our scale positively, and not dictatorially.”
It has unquestionably been a very busy two years for the company, and as developments at Thanet Earth start to accelerate over the next couple of years it could yet get busier. “We will continue to be active and move the whole produce industry forward,” says Musk. “We have to be flexible in our management structure - Fresca feels like a family business but is run like a plc, and we value our employees very highly. We couldn’t achieve anything without our staff, and we try to reward them by making them their own master. The owners of Fresca’s businesses enjoy a high degree of autonomy, and that is a benefit beyond financial reward; it is about encouraging people to make their own decisions and have their own voice.
“We all take our own responsibility for developing and moving forward, and at the end of the day that comes from the top - from Chris,” he adds.
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