FROM market stall to UK market prominence would have proved a white knuckle ride for many fresh produce companies in a tough industry where supermarket customers rule and low margins prevail.
But Kent-based produce supplier Mack has not only negotiated 131 years of trading since its ‘birth on a barrow’ but also managed to grow its own turnover to more than £288.6 million on 2004 figures and amass net assets of more than £49m.
Under chairman and ceo Christopher Mack, this home grown business has entered its fourth generation of family ownership, although the group is more entrepreneurial than proprietorial in its core culture.
The group continues to flourish following a series of highly focused strategic acquisitions - no mean feat in itself. Bedding new businesses in to a group of companies is never easy, but staying close to core, recruiting talented managers and quality staff and giving them rein has paid handsome dividends for Mack.
The company has found a willing ally in its long-term growth strategy in the form of a new bank, Lloyds TSB Corporate. The bank helped fund the recent acquisition of imported fresh fruit specialist Primafruit in Evesham; it is also the long-term bank of another relatively recent Mack subsidiary, DGM in Spalding - a specialist potato and vegetable packer that continues to prosper.
Mack has expanded beyond recognition since Christopher’s great grandfather began business in the old Covent Garden market in 1874.
Today it serves an extensive customer base from major supermarkets to independent retailers and from foodservice operators to florists - Mack also sources fresh produce from more than 60 countries.
Mack Multiples, located in Kent, supplies major multiple customers while the wholesale division has branches in Birmingham, Bristol, Cardiff, Southampton and Wolverhampton, alongside its own import operation, Mack International.
Mack Service produces a range of products including prepared fruits, vegetables and salads for both retail and food-service sectors.
Chris Mack says: “From each of these business units our technical and commercial teams travel the world seeking the best growers and exporters to meet our customers’ demanding standards in respect of quality, consistency, food safety and value.
“Produce is either delivered directly to our customers, or, where appropriate, ripened, selected and packaged for daily delivery from our £25m, state-of-the-art facilities at Paddock Wood.
“Where appropriate, we are increasingly taking on the responsibility for driving the sales and profitability of our products within our major retail customers. Tracking consumer trends and behaviour, carrying out qualitative consumer research, monitoring sales and availability are all activities that our teams are involved in on a daily basis.”
Despite its remarkable growth, Mack has remained in private ownership - but only just. Mack recalls a time in the late 1980s when “we almost made the mistake” of going through with an IPO. Produce companies across the country were floating and Mack hired advisers to explore the possibility.
“We were some way down the road when a couple of issues surfaced and gave us pause to reflect. We didn’t need access to finance and the industry was volatile; a lot of quoted companies in our industry were being bruised by the experience.
“We looked again at our strengths and decided we didn’t need to float but would focus on what we were best at. There was no great insight involved - we were just lucky. The company has continued to thrive in private ownership.”
One of the main reasons Mack has prospered is because it remains a ‘people’ business. The Mack family, including the chairman, owns around 55 per cent of the stock but an all-employee share scheme has given staff a stake in the fortunes of the business and all the pride and loyalty that engenders.
Mack says: “This is a tough industry with margins that are often pitiful and intense competition among producers. One thing that sets us apart is the quality of our people - and I’m not just saying that. Of all our assets, they are the biggest differentiator.
“This is one of the reasons our acquisitions have worked so well. We endeavour to bring in bright and dynamic managers and high quality staff and empower them to grow the subsidiary businesses, pretty much autonomously within the broader group structure,” he says.
“They develop pride in their own achievements as they grow these businesses. I spend a large percentage of my time ensuring we have the right people. They nurture the constituent parts and the whole group benefits.”
The company has good visibility going forward and Mack believes the business is even stronger given the relationship it has started to forge with Lloyds TSB Corporate, via the bank’s relationship directors Neil Mackie and Norman Sutton.
He says: “We had banked with one of Lloyds TSB Corporate’s high street competitors for more than a century and never asked for a penny. On the rare occasion we needed to borrow venture capital we went to 3i.
“We decided to borrow for recent acquisitions and went to our then bankers but they came back with an outrageous offer. The Lloyds TSB people took trouble to understand what our business was all about, what market pressures impacted on it and what we wanted to achieve long-term. They also came up with a highly attractive package.
“Although our existing bank came back and tried to undercut them, there was no going back. We build trust with suppliers and customers and I expect that to be returned in cases like this.
“Although our industry continues to throw up new challenges we feel that the group is exceptionally well placed to overcome these and to continue its growth path.”
No comments yet