With a degree in chemistry and 10 years spent working in private equity, Sant Mehta has an unusual perspective on the produce industry.
The chairman of Birmingham exotics supplier Minor Weir & Willis (MWW) is currently overseeing a period of sustained and robust growth at his family business – with a turnover of £166 million for the 2015 financial year, MWW is seeing 10 per cent growth year on year, while European sister business QPI has a turnover of around £134m.
Growth in the exotics business, as well as in ripened products such as avocado and mango, has no doubt been a key contributor to the success of MWW in recent years – but scaling up is also one of Mehta’s philosophies on how to succeed in the modern produce industry.
The company has recently completed a £15.5m investment on a new 150,000 sq ft packhouse, after outgrowing its previous site, something Mehta believes is a strong statement of intent. “This is one of the few major investments that have occurred in this industry over the past few years. This signals to the industry our intent and our ambition to lead our categories,” he says. The state-of-the-art packing and ripening facility, at Witton in Birmingham, now houses the company’s retail supply business and its added-value operation, while the catering business is run out of smaller satellite depots.
“Exotic fruit and legumes are now everyday, with demand increasing by 10 per cent year on year in many of our markets. Customers require us to have scale to compete, and this drives the trend for a number of businesses getting bigger,” says Mehta.
Planning the future of such an international and large-scale produce business, ever-dependent on both exchange rates and weather, requires a multi-tasking tactical approach – something Mehta no doubt also practised while playing hockey twice a week, until injuring his knee three years ago. Nowadays, he has turned to cycling and focusing on a growing family, where perhaps the endurance required in both these pastimes also lends itself to his working life.
His next focus is to maintain the company’s strong growth in an increasingly tough industry. “Historically, we’ve operated at 10 per cent year-on-year growth. In a deflationary market, those are really difficult numbers to keep up,” he says. “So there is a requirement to continually improve and restructure where appropriate. Our business is evolving; keeping it simple and streamlined is paramount to success. But you don’t have to operate in the same way – I don’t have to generate that 10 per cent growth in the same place every year.”
Luckily, the group’s structure provides several options for where that growth can come from. While MWW has been majoring on exotic fruit, ripened products, legumes and other products requiring complex airfreight logistics, the group’s European arm QPI has built up a successful salads business. The model on this side of the business is different, Mehta explains, as a focus on commodities such as lettuce, cucumbers and peppers has seen it develop a low-cost strategy, going straight to retailers where possible.
“That side of the business has been much more about commodities, so our strength there is our salads, cucumbers, tomatoes. QPI is the biggest exporter of tomatoes in the UK from Holland, which not many people know,” he says. “We are not set up so QPI supplies us and we supply the customer; ideally, it goes direct to the customer because that’s the lowest-cost model.”
It is at the join of the QPI and MWW businesses that Mehta says he sees most growth for the wider group. “So for example, our salads business is doing very well at retail at the moment, because QPI and the UK are operating as one business,” he says. “In Germany, there is strong growth in ripened products, which we ship from here. So it’s understanding the dynamics of each market.”
With such a big focus on imported fruit, MWW has inevitably felt the impact of post-Brexit currency volatility. Mehta is cautious, but not unwilling to discuss the challenges in mitigating the subsequent cost increases across the supply chain, not excepting retailers and consumers. “There is clearly a big exchange rate impact coming through,” he says. “It’s such a significant change. At some stage, this must come through to cost inflation. What we must do is get our integrated supply chain right to reduce this impact.
“There have been discussions with retailers, who have understood the issues and price changes have been implemented. It’s clearly going to be an issue for the industry. At the moment, cost inflation is being suppressed but at some stage it is likely to come through to prices.”
One way the business is looking to weather any financial bumps is through moving towards becoming the major partner for its growers, with the incentive of being able to supply produce into multiple sectors across Europe. “One of the reasons we have our structure is so we can work with significant growers and give them access to multiple markets,” explains Mehta. “Collaboration with farming is a significant change in our approach, whereby we seek to buy the ‘whole crop’ to ensure the farmer achieves maximum returns for his crop. This approach can only be facilitated if you have a customer base as broad as MWW. That’s the model going forward. It’s about us becoming absolutely responsible for the whole of the supply chain.
“For example, on one of our smaller crops – passionfruit – the demand is small in the UK, but significant in Europe in aggregate. So if you go to Colombia we are partners with the largest passionfruit grower there and take 100 per cent of their output for the UK and the continent.”
Perhaps surprisingly, Mehta says MWW is increasingly becoming the grower – he says the business is already one of the largest UK growers of legumes and salad onions. “One of our biggest investments in the UK has been in growing. And our scale has enabled us to invest in produce not traditionally grown in the UK such as pak choi and Tenderstem broccoli.”
With his finance background, Mehta says he has more experience than some produce businesses on the question of flotation, and says listing the company is “low on the agenda” as he does not believe it would add value for shareholders. While he doesn’t write-off the possibility of acquisitions in the future – he says the group would “absolutely look at it” if it chose to move in a different direction – it’s clear that getting the everyday job right, and growing organically, is more of a priority. Retail relationships are inevitably a big part of this – MWW recently appointed a non-exec director from an FMCG background with a specific remit of maintaining customer relationships and trust, and ensuring this focus across the business.
Wrapping up the interview, Mehta checks to make sure we have covered all of his carefully-prepared notes. Whatever direction he chooses to take the company in next, with Mehta at the helm MWW no doubt has a very well-planned future ahead.
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