Riverford new branding van

Veg box company Riverford Organic saw annual profits fall as a result of increased investment in people, packaging and marketing, according to its latest accounts published at Companies House.

Sales of £110.8m in the 12 months to 30 April 2022 helped the farmer-owned grocer achieve its “biggest year of sales” in its 36-year history – slightly up from the previous year’s £109.6m.

Pre-tax profit, however, fell 56.3% to £5.2m as a result of increased advertising and people costs.

Marketing was ramped up in a bid to grow its customer base following a period of rapid growth during the coronavirus pandemic. The company also became a real Living Wage employer in 2021 and increased its sick pay offering to workers.

Despite adding costs, the changes “demonstrate our commitment to support our purpose and values,” MD Rob Haward said in the report.

Devon-based Riverford completed 3.8 million deliveries in the year to April 2022, a fall of 5% versus the previous year, when demand for deliveries of its organic fresh veg boxes soared while consumers were home-bound during the coronavirus pandemic. This helped the business rise above £100m turnover for the first time.

Demand has tightened slightly in the wake of the pandemic, but Riverford said it hoped its purpose-driven proposition of organic, high-quality and sustainable veg would help it stave off growing competition from traditional supermarkets in the home delivery space.

The registered B Corp invested £2.5m in growth during the year. All of its packaging was now paper or home compostable, after it accelerated its investment in packaging, Riverford said.

It aims to electrify its entire fleet of delivery vans by 2025 with a target of electrifying 70% of its fleet by the end of 2023.

In August, Riverford head of wholesale Lynette Sinclair said that the company would seek to expand its operations to supply more cafés, restaurants and other retailers, after seeing demand for wholesale increase by up to 43% from some sectors