There’s an astonishing number in the accounts of
& Cole, the fruit and veg box delivery company. For the year to
31August, 2007, the company had all of just one member of staff working in
Finance director Ted Bell doesn’t seem so surprised. ‘Yes, it was just one
person. [Selling the product] was like turning a tap on. The challenge up until
about 18 months ago was about handling the growth.’
Despite its familiarity to Bell, it is, to an outsider, a big surprise. A
company that turns over more than £30m, distributing organic food, veg and
drinks, effectively selling themselves. If you’ve ever received one of its
leaflets, you’ll know the deal: starting at £9.95 a week, you get a box of
seasonal fruit and veg delivered to your door.
The core product (the company does far more than just fruit and veg boxes
these days) has been a phenomenal success.
In 2000, it turned over around £1m. Its founder, Keith Abel had laboured away
on the business since the 1970s. In 2004 it moved up to £3.6m, doubling in 2005
and again in 2006. Last year’s numbers showed a turnover of £27.9m and 2008’s
will show growth again.
Private equity group
Partners bought into that growth story last year when they took a stake,
valuing the business at a reported £30m-£40m.
The reasons for the growth are not difficult to guess at, either.
‘There’s been a big explosion in organic food. At the same time, online
shopping has grown very strongly,’ Bell sums up simply.
Organic – or rather what Bell terms ‘artisanal’ food – has become hugely
popular, and the internet has made Abel & Cole’s business model almost
uniquely well-placed to take advantage.
In the current straitened circumstances, the company’s story is an unusually
What’s more, there are plans to put 25% more in the boxes (at no extra cost)
later this year; the company has diversified into other areas of artisanal food
– a whole range of tantalising delicacies that, like the fruit and veg boxes,
probably sell themselves.
But all is not entirely rosy: there are risks on the horizon.
‘There’s no doubt that people are cutting their cloth, we need to be very
alive to that. We have the benefit of being in a good sector – people have to
eat. But what premium are they prepared to pay for their food? It’s about
ensuring our value proposition is right,’ he says.
A management trainee at
Unilever, Bell learned
his trade as the brand manager for
Dove Soap. But he found the
faceless bureaucracy of the consumer goods giant not to his taste and moved on
and in to private equity.
He joined 3i in Southampton, and after working for them for five years moved
to Close Brothers. But he really wanted to run a business, and with returns in
private equity dwindling and the fact that ‘we weren’t getting as close to the
businesses as we used to,’ he moved on again after meeting a headhunter who put
him in touch with Abel & Cole.
There’s no doubt that Bell believes in the business, and the company is every
inch what you would expect. It does everything it can to avoid turning on the
air conditioning (the interview beginning, as a result, in sweltering greenhouse
heat on a cool autumn day). Employees are relaxed, helpful and engaging.
The office has a ‘lunch club’ where all employees who want to can sit
together and eat. It used to be the employees who cooked – Bell had to hold off
talks with the private equity buyers last year to put the finishing touches to
his mushroom risotto – but it became too time-consuming for them. All in all, it
looks like a good place to be.
Not everyone is happy, though, with the recent direction of the business. One
online critic objects to the new owners. ‘I bought from them not just because I
wanted a regular supply of organic produce, I also want to support green,
ethical businesses. Now they’ve taken the capitalist’s shilling, who knows what
will go on behind closed van doors. A big shame!,’ says ‘crustee’ on
The criticism undoubtedly plays on the minds of those who run Abel &
Cole today. After all, with the turnover it’s boasting, this is hardly your
friendly local retailer any more, is it? ‘We must never allow ourselves to be at
all corporate or supermarket-like in any way. If you were to come to our
supplier day it would still feel [the same as ever].
‘Our customers still very much see we are a conduit, a way people can source
produce from somewhere lovely in the UK: batches of houmous put together in a
kitchen in Bath; the man who milks his cows to the sound of Radio Two. That’s
not big business.’
But he freely admits that in terms of managing the company’s back office, he
is quite happy for it to be ‘corporate’.
‘If being good at [finance, customer services, etc] is corporate we will be
that. But at the front end we have to remain artisanal. That’s about how we talk
to our customers, our farmers, growers, etc.’
Equally, it’s worth a bit of perspective. Founder Keith Abel has said, and
Bell echoes the message, that the company is, even at the size it is at today,
only as large as your local Tesco Metro in turnover terms.
And perhaps some proof that this is not really big business is its commitment
to cutting edge ethical and environmental information. Last year it conducted an
ethical audit, and it is now pondering carrying out an audit of its carbon
‘We want to ensure that the environment is looked after, people within the
business are looked after. So we were looking across all those stakeholders, how
we are performing, looking at our value system. I have seen how farmers are
treated by our supermarkets, they come to us because of our ethics,’ Bell says.
He is full of praise for the project because, he says, it enables the company to
understand whether it is living up to its own words, and also measure and
improve where it is falling down.
‘We’ve reduced packaging on individual products. It helped us realise we are
right in claiming what we do and helped set targets.’
The carbon footprint audit would take that a step further. ‘We’re deciding
whether to commit to it. We want to make sure everything we do we are upper
quartile, better than anyone else in one thing in particular. And that we’re
better than supermarkets on every single front.’
The company’s delivery vans sound like the most carbon intensive element of
the operation. Bell mentions they are trying to use bio-diesel, and have been
running a van on chip fat. But it’s not entirely successful – three have blown
up so far.
Abel & Cole seems like the kind of business David Cameron’s Tories, and
even Gordon Brown, might like to cosy up to: a socially responsible enterprise
interested in making money, but only in the right way. So what does Bell think
politicians could do for him?
He is fairly dismissive of the politics: ‘Change comes about by people like
us making change happen and working with consumers to ensure that change come
about, not by someone with an office in Whitehall pontificating about grand
visions.’ Having said that, he adds that he would ‘welcome any further support
they might give us.’
On a personal level, would he go back to Unilever? Say there was a finance
director vacancy there? He laughs – ‘if the price was right’ – before adding
more seriously: ‘When you have been in a business of a scale that you can effect
change, where you make the decision and can see the change happen straight away,
it’s quite difficult to go back to an organisation where decision making and
change takes so long to effect.’
He wants to stick it out. ‘I would love to still be here running the business
when we are three times the size we are today.’
By the sounds of things, that might not take too long.
Revenue and profitability growth in on the rise for CPA firms, found a survey from the American Institute of CPA’s and its subsidiary CPA.com
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton