Switching from B2B to B2C in an instant was a tough decision facing Richard Strongman, managing director of Harvest Fine Foods, ranked 245 in the Solent 250, but the Southampton-headquartered business faced hardship, or worse, without some innovative thinking.
Arriving slightly late for his Zoom interview with The Business Magazine, Richard Strongman is apologetic. But he has one of the best excuses we’ve heard. "I was down in the warehouse helping peel and prepare vegetables for tomorrow’s orders – we have lost quite a few staff following Brexit and the team were under extreme pressure. We’re working flat out to keep up with demand."
Rapid move in new direction to rebuild customer base
Since May’s economic re-opening, Harvest has been rebuilding its lost B2B customer base in the healthcare, education and hospitality sectors.
The way the company responded to the pandemic is a lesson in seizing the day. Harvest cooked up a home-delivery service “in about 48 hours” when the first lockdown was announced in March 2020.
Strongman takes up the story: “We bounced a few ideas around and decided we could do it. People everywhere were isolating, feeling frightened and struggling to get groceries. We have considered starting a home delivery service for some years and this was the ideal opportunity to give it a go.”
He was staggered by the demand, with some 13,500 people signing up in the first two weeks, around one third placing orders and about a quarter re-ordering. “We went from a zero to a £5 million annual turnover run-rate overnight,” said Strongman. “While it has now dropped off to about £12,000 per week (an annual turnover run rate of £624,000), it remains an important part of our business for the future.”
Boosting morale in the local community
As well as business survival, there was a strong altruistic motive in supporting the local community and boosting staff morale by keeping as many as possible in work rather than furloughed. “We were providing around 3,000 meals per week to school children, the elderly and the infirm,” he said. James Tetley, partner at RSM added “interestingly, Richard commented that they would probably have been better off financially in closing the doors and furloughing the staff. It was important to Richard and the management team, and core to the values running through the business to keep the doors open, and as many of the staff as possible continuing to work.”
Overall, the company’s turnover dropped from £19m in 2019 to around £15m in 2020 and, as with many privatelyowned businesses that entered the pandemic with strong balance sheets, has also depleted much of its accumulated cash reserves. “We are now looking to rebuild revenue. The home delivery service provided an important revenue stream and connected us to a new audience, but we are now focusing on supporting our main customers as the country re-opens for a critical summer in the leisure and hospitality sector,” he said.
Mountain to climb
Strongman describes a “mountain to climb” in terms of repairing the financial damage caused by the pandemic that could take 18 months to two years.
A strategy of organic growth is being broadened to acquisitive ambitions, with wholesalers in mind. “Pre-pandemic, we had enjoyed several years of strong growth following our relocation to Totton in April 2017 by virtue of our much larger warehouse and our membership of the Country Range Group buying group.
“This enables us to carry a much broader range of products, and the collective purchasing power of the group also means we can compete with the big national players. But we’re also looking at possible geographic expansion. One option would be to open a sub-depot outside the region,” he said.
Harvest is a second-generation family business set up by Strongman’s father in 1988 and he is keen to keep that family-feel about the business. He is also acutely aware of the potential for the business to have a positive impact on society and their local community through its corporate social responsibility initiatives. “We use our empty vans to collect produce from local farmers and producers as they return from their delivery routes most days.”
Having endured the toughest of times through the pandemic, Strongman feels optimistic that they can turn the fortunes of the business around. “I’ve not yet fulfilled my ambitions for the company,” he said.
Reflecting on the discussion, Tetley observed: “Harvest Fine Foods is a perfect example of how, through the quick thinking and hard work of management teams across the region, many businesses within the Solent community have acted decisively, transformed their business model overnight, and managed to survive a really challenging period – emerging the other side having accelerated change within the business, further embraced technology and explored new routes to market – or indeed new markets”.