Award-winning foodservice supplier Fresh Direct UK is planning to open its own pub in a village near Oxford before the end of the year in a bid to understand better the challenges that face its customers.
The company’s chief executive Nigel Harris made the revelation during his presentation at the Re:fresh conference last week on a day when the business went on to win the Re:fresh FPC national foodservice and FPC overall produce trader of the year awards.
Harris said: “We have our own development kitchen at Fresh Direct, but we said that we needed to look at what our customers are doing in their kitchens at 11 o’clock at night. So we have bought a pub so that we can see what the constraints are for our customers and be able to say to them ‘we tried this, it works in our pub’. We welcome growers and producers to go there, be in the kitchen and learn how to supply them better.”
As well as tight-knit relationships with customers, Harris said, Fresh Direct is very hands-on at the beginning of the supply chain and is investigating the possibility of joint farming ventures. “Looking at asparagus, for example, there is a lot of waste for growers dealing with the retailers who will only take straight stems. We went to [grower] David Markham and worked with agronomists on a trial to sell 100 per cent of his crop from 15 acres and we did it.”
Harris added that in the first season the project produced four tonnes and broke even. In the second year it produced 11 tonnes and generated £20,000 in profit. “Thirty-five per cent of the crop was bent but we sold the whole lot. It is an example of a supplier and a grower getting together. If we can do it on a tiny field then it can be done on a larger scale,” said Harris. “We are now looking at doing the same thing with soft fruit and leafy salads.”
Harris used his speech to advocate that the fresh produce industry takes this type of
co-operation to the next level by establishing purchasing consortia and consolidating services. “A customer will not move to me because my fuel is better than another foodservice company. Why aren’t we then, through the FPC say, buying our fuel, our paper and so on jointly? Customers want more consolidation of services - we have all got lots of lorries so why aren’t we backhauling with each other?”
Fresh Direct’s development plans come as it filed year-end results for the 12 months to 31 July 2010 showing the company increased its turnover by 13 per cent to £102.4 million, but with pre-tax profits slipping 12.6 per cent to £2.6m.
MD David Burns told freshinfo: “As was predicted, commodity price movements and a strong euro provided one of the most challenging operating conditions I can remember in the produce industry... [But] continuous substantial investment in our brands and product development will eventually pay dividends, and we have seen that, even in the most difficult of times, we have a robust business model.”
