Half past four on a Monday morning is not a time when most of us are feeling perky. But Rich Osborn seems remarkably cheerful as he zips south along the A46 towards his fresh food distribution hub in Keynsham, Somerset.
“A just-picked courgette has tiny prickles, a flower on the end, and it weeps juice,” he enthuses as we drive, listing the produce his startup, Fresh Range, sources from farms in the local area. But the business is as much a tech company as a food company, says Osborn: the £1m he and his two co-founders have invested to build a bespoke “dynamic ordering” software means that when you order their carrots, they’re still growing in the field. By contrast, in supermarkets, he says, “the food is cheap, but it’s old”. A 2011 investigation found meat can be up to two months old before it reaches the supermarket shelves, and fruit and vegetables (such as apples and potatoes) can be up to six months old. Osborn’s aim is “to change the food supply chain for good”.
Fresh Range is one of a band of emerging startups hoping not only to disrupt the journey taken by food on its way to the kitchen table, but to also set a far higher benchmark for the quality of what we eat, and reduce the environmental impact of our groceries to boot.
The team have spent the past three years developing Fresh Range as a company that sources fresh produce, meat and fish from the south west and delivers it to Bristol and Bath-based customers. More recently, it’s become the supplier for Bath and North East Somerset council’s entire school dinner operation.
In south London, fruit and vegetable subscription company, Oddbox, has similar aims. It was set up just a year ago by Emilie Vanpoperinghe and partner Deepak Ravindran, and sources, packs and delivers wonky or surplus fresh produce that would otherwise have gone to waste. “This can be produce that the growers wouldn’t even have picked,” says Vanpoperinghe.
The company will take cherries that are too small, or strawberries too ripe to cope with the long supermarket supply chain. A farmer who had asparagus spears that had grown too bent to be acceptable to a supermarket was delighted to harvest the crop for Oddbox. Growers can also sell surplus that would otherwise be junked. “There’s so much waste in the UK at all levels, so there’s not going to be a shortage of suppliers,” she says.
The couple’s ambition is to deliver nationally, but the first milestone will be to extend their service to the whole of London. In food, it’s hard to be a small player, Vanpoperinghe says. The pair must currently pick up their orders from each individual supplier, because they don’t yet have the volume of orders to warrant a whole pallet. They currently have 250 customers, but will soon need a bigger warehouse and cold storage area.
Like Osborn, Fishbox founder Magnus Houston is making use of technology to get sustainably sourced Scottish fish to customers’ doors within 48 hours of it arriving on shore – including by-catch that would normally go unsold. “We believe in no discards and in utilising all the fish which has been landed,” he says. “We find that customers are more concerned these days with where the food is from and how it’s caught.”
Houston is also committed to buying in a way that helps ease pressure on individual species and expands customers’ horizons. They have developed an algorithm in collaboration with Sterling University to create a shopping list for their buyers visiting fish markets. It’s a model that considers customer preferences – based on predefined “loves, likes and dislikes” – and can be tailored to whatever comes in fresh on the boats that day.
Food is a low margin business and these startups are banking on increasing numbers of customers being willing to break the supermarket shopping habits of a lifetime. The recent high-profile failure of Hubbub after nine years,despite gaining substantial investment to expand its operation delivering food from independent shops to people’s doorsteps, has sounded a loud warning to entrepreneurs – and investors.
“For me the Hubbub model was flawed,” Osborn says, undeterred. “Food is all about efficiency and low margin, so that customers get the best quality at the best price. If you buy food at the place where it’s most expensive, like a high street shop, and then add a margin, it’s not going to work.”
But are disruptive food startups making the supermarkets think again about how they deal with supply chains? Cyrille Filott, global strategist for consumer foods at Rabobank says: “In the UK, we’ve seen in more than 60% of big food brands begin to lose their share in the market over the last five years, with small brands increasing theirs. In the US, this figure is bigger, and we expect the UK and Europe to follow the trend set over there.” But she believes that the significant changes will come from technological advances “that is making food more readily available to consumers”.
Get the concept right, however, and startups may have a genuine edge – even over someone like Amazon Fresh, which is expanding into home delivery of fresh produce. “Supermarkets have already identified the importance of increased convenience … [but] startups are going beyond just ease of purchase,” says Suzanne Robinson, managing director of innovation consultancy Happen UK. “[There’s] ease of preparation, choice tailored to different consumption needs and skill levels, combined with social good causes and healthier ways of being. They might not all be getting it right every time, but they have more potential to do this more consistently and respond to feedback in a more agile way.”
Of course competing at such levels takes money – Osborn has recently launched a crowdfunding campaign to fund further investment in technology and marketing. But entrepreneurs in this space can take heart, adds Filott, from the fact that funding is now easier to come by compared to five years ago. “A lot of this can be attributed to Silicon Valley companies realising the need for food to be disrupted,” she says, “If an idea is good, there’s a good chance it will be able to source the investment it needs to succeed.”
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