Nearly three years after the UK’s largest fresh produce company was formed, the transition to the Total Produce “brand” has still not been completed in some wholesale markets and regions, but North West director Steve Webster implemented the name change with immediate effect when the worlds of Redbridge and Fyffes collided.
“I changed the name over the door the very next day and that has worked very well for us here,” says the man who formerly headed up Fyffes’s Liverpool operation. “To me, we were not Fyffes any more from that day onwards and there was no point hanging onto the past.”
The region he manages has been entirely re-badged now. “When I took on this role, we had a plethora of names to deal with, including Fyffes in Stoke, George Jackson in Birmingham, Redbridge in Wolverhampton, The Greenery in Manchester - no two markets had the same identity,” Webster says. “I didn’t want to go down the potentially divisive route of retaining separate names. While I accept that it might not have been the best thing for some of our companies in other regions, I just felt it was the right way to go here.”
The most positive aspect of the merger in Liverpool has been how the two businesses have dovetailed to create a stronger company. “While we were similar-sized businesses in terms of turnover in Liverpool, Redbridge was not quite as successful prior to the merger,” says Webster. “It did, however, have some very successful departments. What has been beneficial is that where each company had its weaknesses, we generally found that the other was strong. The amalgamation of the two has therefore lifted the performance levels and that helped us to maintain the number of trading staff.
“I think there was a certain amount of inevitability that the [merger of Fyffes and Redbridge] would happen when it did. There has been further consolidation here since then and I think there is bound to be more to come,” he says. “There will be more changes in this market. We have been talking about it for a long time and there have been countless meetings and three separate feasibility studies. Another study is now being talked about. The amount of time spent compiling and then discussing each report means that they are out of date before any action is taken. I just think the time for talking has stopped - we need to start moving forward with what we need to do to shape the way this market will be trading in the next 10 years and beyond.”
But with the market shrinking in size and its own comparative scale, does Total Produce need to be within the market walls to thrive? Webster thinks so. “We represent around a third of the trade here now and there really would not be a lot of benefit moving away from the market,” Webster says. “All of our net profit comes from just 25 per cent of our turnover, hence we know that we cannot afford to lose any of our customers - high end, bottom end or passing.”
The decision is based, as it should be, on hard-nosed commercial factors rather than a holistic desire to see the market survive. “We welcome the competition there is in the market, but we cannot ensure the survival or profitability of the competitors we have. Just like them, we are under pressure to produce our own results by operating in the best way we possibly can,” Webster says. “This year, there has been a significant downturn in the business. There has been a price collapse over the summer, which has dramatically affected turnover. Fortunately, we had pre-empted this and made the difficult decision to reduce staff numbers and overall costs across the region -in Liverpool and Manchester at the end of last year, in Stoke at the beginning of this year and when we merged our two businesses in Birmingham last year.
“Obviously, it is not a positive thing to have to make redundancies, but it is a necessary evil sometimes if you want your business to survive and move forward. At the end of the day, our purpose is to make a profit and if we don’t do that, we won’t be here.”
The profit-driven approach has led to minimal disruption to the trading teams. “I’m not a fan of losing trading staff - the amount of experience we have in our salesmen here means there is very little to gain from any of them leaving us,” Webster explains. “Since the merger of the two businesses, it has very much been a case of honing the best of both businesses to strengthen the whole.
“It’s not just about their sales experience and capability - it’s what they add to the procurement and stock management. If you reduce the number of salesmen to the bare minimum, you put a hell of a lot of pressure on people who start work at 2am and would still be around at 2-3pm. There is also a very small trading window and you need to have the volume of trading staff to deal with the influx of people at key times.”
The difficult spell is probably not behind the trade yet, he adds. “I think we have a very tough 12 months ahead. Ordinarily, the summer is our bumper trading period, but this year, the summer months were very disappointing. It’s more than just weather; there are a combination of issues, some of which go back a long way.
“People are not importing as much produce for the wholesale markets, for instance. And to service their growing discount ranges, supermarkets are taking some of the product that ordinarily would have been out of spec.
“As an example, there is not a box of grapefruit on this market at the moment and we used to bring in whole trucks. Severe shortages do mean good prices, but it is not a healthy situation for anyone. The supermarkets can operate on season-long prices and when our prices are at record highs because of shortages, it is becoming quite commonplace for us to wholesale at prices that are on a par or even higher than they are retailing at. In some instances, that is down to their discount offers but, to a large extent, it is down to a shortage of availability on the wholesale markets.
“We worked for a number of years with oversupply into the wholesale markets, as the effects of consolidation filtered around the world and we found ourselves selling at below import cost far too often. As a result, the attraction of the UK as a market for commission product diminished - the demise of sterling obviously hasn’t helped that.”
Now, says Webster, discounting at retail level has an even greater effect on the independent retail trade and he cites the latest “banana war” as “another nail in the coffin” of some. “Bananas are still a high-volume, high-profit line for the independent retail trade,” he says. “Virtually all multiple retailers are selling way below cost and our best fruit is wholesaling at £14 a box this week [more than double the cost per kilo in Asda]. The multiples are not going to be selling rubbish fruit at 37p a kilo. I don’t think the independent retailer is on their radar any more, so this isn’t an attack on them, but that really is a significant price difference to deal with. It would not take long for bananas to move from being the number-one profit driver to a peripheral line for the independent retailer.”
PLAYING TO SEPARATE STRENGTHS
Ex-Fyffes man Ian Mack, who heads up the Total Produce vegetable and salad division in Liverpool, says bringing together the two companies has added strength to the overall proposition. “It has had a very positive effect, with both sides bringing different sets of suppliers and customers,” he explains. We were direct rivals, of course, but it was a friendly rivalry, so there were no real personality clashes.
“What Redbridge brought particularly was a strong potato business with a very good group of local growers, and we have also enhanced our local salad supplier base in the big growing areas around Southport and Hesketh Bank.
“One of the bigger benefits of being Total Produce is the buying power our combined strengths have given us - we are rarely short of supplies unless there is a genuine shortage of any given line. In terms of customers, we were serving quite a few of the same people anyway and there are only four or five competitors in the market - we’ve managed to keep all of our customers, as well as adding on some new ones.
“Many of us started here pulling hand carts and it is a very different place now. This is becoming more and more a distribution depot. Roughly 60 per cent of our orders are now received on the phone or by fax overnight. The old days of bartering have largely gone, and while we may still hanker after that to some extent and the hours have got longer, we are all here because we have a perverse attraction to the place!’’
BERRY BUSINESSES RETAIN IDENTITIES TO GIVE MARKET COMPETITION A BOOST
While most sections of the business have been completely merged, the decision was taken to keep the Fyffes and Redbridge berry businesses separate. “Both companies had substantial berry businesses and my supposition was that if we merged the two, we would struggle to maintain the overall sales figures,” explains Steve Webster, North West director at Total Produce. “We kept them apart firstly to compete with each other, and secondly to compete extra hard with the other berry businesses in this market.”
The competition is very real, with the manager of one of the businesses, Peter Moss, doing all he can “to take business off our other fruit salesmen, as well as everyone else in the market”, Webster adds. “By keeping two separate entities, we have actually done a lot more business, maintaining our pre-existing customer base and building on it. It is the result of personality, experience and a lot of other factors. The good thing about the scale is that, if we have two suppliers that want to sell us 20 pallets each, we can push that sort of volume through, whereas we would be more limited as one business.”
FLOWERS POWER ON FOLLOWING MERGER
John O’Connor, who heads up the Total Produce flower and plant operation in Liverpool, says the three flower companies left in the group have the most experienced salesmen. “The last three years have seen the flower trade change dramatically and we have had to adapt by reducing staff, trading area and vehicles but, touch wood, we’re still doing OK.”
In contrast with the fruit and vegetable side of the business, O’Connor’s delivery business is virtually zero. “People can get deliveries from the Dutchman,” he says. “But they are limited when they do that. What they come to the market for is the different lines, like Carmel flowers or the full range of English flowers that they can’t get from the Dutchman. We still have a point of difference that brings customers here and, although there is no doubt the florists are all finding it very tough, they still want something different.”
TRADE BOOSTED BY EXPERIENCE
Phil Bruce is another of the firm’s salesmen with more than 25 years’ experience under his belt and says the combination of two companies has introduced a “different way of working” to the experienced pros. “Nowadays, there are just one or two people doing the procurement and that allows us to spend far more of our time concentrating on being salesmen,” he says. “That, combined with the vast experience we have here, is why we are successful.’’
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