Last year’s Beast from the East dampened profits at organic veg box company Riverford but sales continue to rise thanks to trends for convenience and ethical buying.
Turnover at the Devon-based company rose by 7.4 per cent to £60.9 million, up from £56.7m the previous year, in the 52 weeks to 30 April 2018, mainly due to a rise in average order value.
Profit before tax slipped from £783,758 to £55,395 for the year due to adverse weather and the impact of snow in February 2018, as well as operational costs from a new packing system being installed.
Looking ahead for the next financial year, managing director Rob Haward said there is a positive outlook with sales already up 10 per cent year on year, despite the concerns over a no-deal Brexit.
“The year ahead is looking very positive, despite the challenges around Brexit,” said Haward. “We are already 10 per cent up on sales, a position we haven’t been in for over a decade. We are seeing the benefit from a general shift towards plant-based diets, and shoppers looking for more ethical buying options.
“Last year’s installation of a new ‘pack-by-light’ packing system was our largest operational investment for 25 years and it took some time to consolidate. Now that is bedded in, we anticipate further efficiencies.”
Riverford became employee owned in May 2018, a move Haward said has given the company a “huge forward momentum” and increased engagement with customers, media and employees, now co-owners.
Addressing the challenge of a potential no-deal Brexit, Haward added: “The prospect of the UK leaving the EU on 29th March with no deal is causing public uncertainty and concern about food supplies.
“We are planning for two weeks of disruption should there be a no deal. Any longer than that and we will face significant difficulties, along with many other companies. We do not expect disruption to run for longer than two weeks but have made plans to cope with this eventuality.”
Haward said Riverford is well-positioned to cope with a no-deal scenario for four main reasons:
- Its direct and long-term relationships with various organic suppliers, both in the UK and overseas
- Its location in the South West, which means it can benefit from the low-freight route between Plymouth and Roscoff
- The veg box concept, meaning supply can vary weekly depending on availability
- Regular communication with customers through founder Guy Singh-Watson’s weekly newsletter addressing topical supply issues such as Brexit.