Small box deliveries of organic produce are catching the consumer’s eye, reports Glynn Davis
Organic food shoppers appear to be shifting their affection away from supermarkets to farmers’ markets, farm shops and direct delivery box schemes. Such has been the demand that for the first time in five years the supermarkets’ share of organic produce sales dropped from 82% to 81% over the year to April 2003.
In contrast, the demand for organic produce from alternative sources increased by 30% to £90m during this same period, according to the Soil Association’s Organic Food and Farming Report.
Box schemes, like Abel & Cole (pictured above) which has a turnover of £3.5m a year from a customer base of 10,000, account for more than £41m of the total. The number of operators offering the service increased from 306 to 471 over the same period and the biggest sales increases were in the south-west of England, with a 68% gain, and the south-east, which had an uplift of 46%. So how are they putting up such a convincing fight against the multiples?
The typical box contains a mixture of fruit and vegetables that changes each week. The vegetables are predominantly grown in the UK but, dependent on seasons, some of the fruit has to be imported.
Sue Floor, media manager at the Soil Association, says the consumers who bought their first organic foods in the supermarkets may have become disenchanted with the high volume of produce sourced from overseas to maintain a year round supply. “As more people become concerned about ethics they want to see local and seasonal food,” she says. “They want the freshness and the variety of the contents of the box schemes and this may be having an impact on the supermarkets.”
Box schemes certainly come in a wide variety of shapes and sizes: from one-man-and-a-van services to
larger franchise operations. And they deliver to great swathes of the UK, whether deep in the countryside or town centres. Just Organic is an example of a smaller urban operation - based in London’s Finsbury Park - that is run by husband and wife team Mike and Dee Adams who deliver to households within a stretch of London north of the River Thames between Acton and Poplar in Docklands.
The company has been in business for 10 years and has attracted a mixed customer base. Mike say: “We’ve people from one-bed council houses in the worst parts of Hackney to £2m houses in Maida Vale.”
Since they started in 1998 the company has seen the organic market change dramatically. “There was a big boom six or seven years ago when home delivery was first used because organic produce wasn’t available in the supermarkets but it then petered out a bit as the supermarkets muscled in,” says Mike.
Although the box delivery market is growing again, Just Organic has settled at handling 400 orders a week - down from a peak of 580 - because it is more manageable. To go beyond the current three delivery vans would require investment in additional warehouse space and more staff and they are reluctant to make that change. But the problem for the business at its current size - with relatively small volumes and based in a city - is that rather than being able to go direct to farms for the high quality Mike demands, he is forced to go to wholesalers. “The farms are stripped of all the good stuff by the supermarkets so we go to the wholesalers because they take the rest of the farms’ good quality produce.
“Being in a city we have to buy fresh once a week, whereas in the country you could typically buy from your local farm and supplement from the wholesaler when necessary,” he says.
A middleman is costly but Mike has negotiated a discount with his wholesaler and this has ensured his smaller box has remained at £10 for the past eight years.
Riverford Organic Vegetables has been able to avoid the wholesalers by tapping into a co-operative of 13 family-owned farms in South Devon. It is at the other end of the scale to Just Organic and has used a franchise model to build the business to 11,000 deliveries a week with a £12.50 minimum box charge. For an initial fee of £15,000 a franchise within a specific region can be secured for five years.
Tieneka Drew, marketing manager of Riverford, says all boxes are packed in Devon with 85% UK-grown produce. They are delivered overnight to hubs with chilled facilities located around the UK. The current 23 Riverford franchisees then collect the boxes and deliver them to households within specific postcode-defined areas. Although Drew does not believe such schemes are regarded as a “threat” by the supermarkets, she does expect more growth. And this is not restricted to fruit and vegetables because Riverford also sells a wide range of other products, including processed foods.
The £3m turnover Abel & Cole launched in a basement in London’s Catford more than 10 years ago. London-based, the service has just scooped the Soil Association’s organic retailer of the year title for nurturing small suppliers. From its small beginnings it has branched out and now stocks drinks and cleaning products plus its core offer.
Chris Firth, senior business analyst at the Henry Doubleday Research Association, believes that the growth of these larger players is indicative of a maturing market.
“It was traditionally small family farms delivering to between 100 and 300 people a week but now there are much bigger operators growing their businesses,” he says
The box delivery sector may still be small, but with the supermarkets beginning to lose ground on market share, the door is open for box schemes to thrive.
Organic food shoppers appear to be shifting their affection away from supermarkets to farmers’ markets, farm shops and direct delivery box schemes. Such has been the demand that for the first time in five years the supermarkets’ share of organic produce sales dropped from 82% to 81% over the year to April 2003.
In contrast, the demand for organic produce from alternative sources increased by 30% to £90m during this same period, according to the Soil Association’s Organic Food and Farming Report.
Box schemes, like Abel & Cole (pictured above) which has a turnover of £3.5m a year from a customer base of 10,000, account for more than £41m of the total. The number of operators offering the service increased from 306 to 471 over the same period and the biggest sales increases were in the south-west of England, with a 68% gain, and the south-east, which had an uplift of 46%. So how are they putting up such a convincing fight against the multiples?
The typical box contains a mixture of fruit and vegetables that changes each week. The vegetables are predominantly grown in the UK but, dependent on seasons, some of the fruit has to be imported.
Sue Floor, media manager at the Soil Association, says the consumers who bought their first organic foods in the supermarkets may have become disenchanted with the high volume of produce sourced from overseas to maintain a year round supply. “As more people become concerned about ethics they want to see local and seasonal food,” she says. “They want the freshness and the variety of the contents of the box schemes and this may be having an impact on the supermarkets.”
Box schemes certainly come in a wide variety of shapes and sizes: from one-man-and-a-van services to
larger franchise operations. And they deliver to great swathes of the UK, whether deep in the countryside or town centres. Just Organic is an example of a smaller urban operation - based in London’s Finsbury Park - that is run by husband and wife team Mike and Dee Adams who deliver to households within a stretch of London north of the River Thames between Acton and Poplar in Docklands.
The company has been in business for 10 years and has attracted a mixed customer base. Mike say: “We’ve people from one-bed council houses in the worst parts of Hackney to £2m houses in Maida Vale.”
Since they started in 1998 the company has seen the organic market change dramatically. “There was a big boom six or seven years ago when home delivery was first used because organic produce wasn’t available in the supermarkets but it then petered out a bit as the supermarkets muscled in,” says Mike.
Although the box delivery market is growing again, Just Organic has settled at handling 400 orders a week - down from a peak of 580 - because it is more manageable. To go beyond the current three delivery vans would require investment in additional warehouse space and more staff and they are reluctant to make that change. But the problem for the business at its current size - with relatively small volumes and based in a city - is that rather than being able to go direct to farms for the high quality Mike demands, he is forced to go to wholesalers. “The farms are stripped of all the good stuff by the supermarkets so we go to the wholesalers because they take the rest of the farms’ good quality produce.
“Being in a city we have to buy fresh once a week, whereas in the country you could typically buy from your local farm and supplement from the wholesaler when necessary,” he says.
A middleman is costly but Mike has negotiated a discount with his wholesaler and this has ensured his smaller box has remained at £10 for the past eight years.
Riverford Organic Vegetables has been able to avoid the wholesalers by tapping into a co-operative of 13 family-owned farms in South Devon. It is at the other end of the scale to Just Organic and has used a franchise model to build the business to 11,000 deliveries a week with a £12.50 minimum box charge. For an initial fee of £15,000 a franchise within a specific region can be secured for five years.
Tieneka Drew, marketing manager of Riverford, says all boxes are packed in Devon with 85% UK-grown produce. They are delivered overnight to hubs with chilled facilities located around the UK. The current 23 Riverford franchisees then collect the boxes and deliver them to households within specific postcode-defined areas. Although Drew does not believe such schemes are regarded as a “threat” by the supermarkets, she does expect more growth. And this is not restricted to fruit and vegetables because Riverford also sells a wide range of other products, including processed foods.
The £3m turnover Abel & Cole launched in a basement in London’s Catford more than 10 years ago. London-based, the service has just scooped the Soil Association’s organic retailer of the year title for nurturing small suppliers. From its small beginnings it has branched out and now stocks drinks and cleaning products plus its core offer.
Chris Firth, senior business analyst at the Henry Doubleday Research Association, believes that the growth of these larger players is indicative of a maturing market.
“It was traditionally small family farms delivering to between 100 and 300 people a week but now there are much bigger operators growing their businesses,” he says
The box delivery sector may still be small, but with the supermarkets beginning to lose ground on market share, the door is open for box schemes to thrive.
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