David Burns - Fresh Direct

David Burns

Despite weather-related problems causing higher production costs, Fresh Direct (UK) has posted a rise in turnover and profit for its most recent financial year.

According to accounts released to Companies House for the year to 2 August 2013, the foodservice giant saw turnover increase by nearly 13 per cent to £146 million, and profits before tax jump from £3.5 million in the previous year to £3.9 million.

Fruit and vegetables account for 67 per cent of total group sales at Fresh Direct, which is now in its 48th year of trade.

MD David Burns said: 'The 2012-13 financials demonstrate further progress, and provide a very tangible measure of the strength of the strategy we have embarked upon.

'Despite some of the hardest challenges facing food companies in the period, we managed to deliver a more than respectable return for our efforts.'

He added: 'Fresh Direct now has a longstanding record of revenue growth and profitability, although margins were down by 2.2 per cent due to a number of factors: Fresh Direct was impacted by some quite exceptional weather-related supply pressures during the winter, and, indeed, the late arrival of spring 2013.

'Raw material inflation alone, as a result of the above, was estimated to have cost the business over £1.5 million during the accounting year. Contracts and pre-winter weather conditions would suggest that most of those exceptional factors should be mitigated going forward this year.

'The shape of the business mix also changed significantly during the period, with impressive growth in other food categories. Fresh produce has always been the core of the business, but during 2012-13 we have broadened our chilled offer, and non-produce now represents a third of our total sales.'

Going forward, Fresh Direct has identified a number of factors that will drive its innovation and product strategy.

These include chains getting bigger; the rise of up-and-coming brands driven by new London concepts; key new food trends, such as Mexican and Japanese; a growth in fast, casual dining; evolving, fresh-friendly menus; and a demographic shift from the high street to the mall for 16 to 30-year-old shoppers.