Technology that's changing food supply for good: Fresher foods direct from local producers.
Rich Osborn (ex-P&G), Steve Osborn & Lee Butler (proven tech entrepreneurs) are co-founders of fresh-range; a food-tech company disrupting a £97Bn UK industry. Our technology redefines how food is fulfilled by sourcing direct, and to order, from local farmers, fishermen, makers and bakers with a consolidated delivery for retail and catering customers in the private and public sectors.
Our technology and infrastructure enable short, light and fast supply chains as an alternative to the mass system. Since 2014, dozens of local food producers and suppliers have joined the fresh-range platform cutting out financially and environmentally expensive mass haulage and storage. Producers earn the majority of the retail price paid and customers eat affordable, fresher food with provenance.
Our unique proprietary technology and infrastructure enables producers to access both B2C & B2B markets for the first time.
We achieved £580,000 turnover in the year ending June 2017.*
*based on unaudited management accounts.
We believe the mass food system in this country isn’t working. It’s a £200+ billion industry, yet millions of people face diet-related illness and shortened life expectancy. It’s a system where farmers are paid a shamefully low percentage of the retail price we pay at the till. Meanwhile, a handful of mass retailers and food service companies are making billions of pounds in profits.
There’s a lot of talk about "locally sourced food" but the reality is that very little actually happens in the retail and catering channels because it’s too difficult for customers and producers to manage it. Our technology is proven to make sourcing from small independent producers alongside major produce suppliers simple.
We are developing food security for generations to come by creating the local food infrastructure to deliver fresher produce direct from local farmers, fishermen, makers and bakers straight to kitchens in homes, schools, hospitals, universities and staff canteens across the UK.
Substantial accomplishments to date
Thousands of people across the West of England are now eating locally sourced food supplied by fresh-range each week.
• 5/5 customer feedback and a high average trolley spend across wide range of categories.
• Our “Click to Pick” technology means farmers can harvest to order. As well as minimising food waste, it enables farmers, fishermen, makers and bakers to prepare produce just before delivery to the customer: Much fresher food that tastes better and can be nutritionally richer. Bread is hand baked on the morning we deliver it. Fish may still be in the sea when customers order it.
• 2016 awards: BBC Food & Farming Award Finalist, Bristol Life Technology Finalist, Western Daily Press Outstanding Contribution to Local Food.
• Certified as an organic supplier by the Soil Association, a Food For Life supplier and RSPCA Assured for higher welfare meats.
In September 2016 we began deliveries on a 3 year £2.1Million contract with a local authority (Bath & North East Somerset). We have been invited to sit on the West of England Food Procurement Group alongside three local authorities to develop access for local producers to supply public sector. We have co-led a sustainable food procurement conference for West of England. We have a strong pipeline of new potential customers such as local authorities, hospitals, universities, and colleges, worth in excess of £6 million annual value.
Virtually all of our revenue is comprised of a fixed ‘by-category’ commission on sales plus a modest delivery charge. Commissions are fair, transparent and the same for all producers. This enables producers to supply through the fresh-range platform on a level playing field.
We never force our producers to participate in costly promotions (mass supermarkets do) and we never request a kick back from producers for listing them (mass food service companies do).
Our retail customer trolley spend ranges from £20 to £200 a delivery whilst our catering customers spend up to £1500 in a single a delivery. Our average gross margin on sales from January to May 2017 was 36%.
We have a very strong potential pipeline of catering customers worth in excess of £6 million annually, 50% of which we plan to land within 12 months.
We intend to expand our sales with existing customers, serving 1-2 new large catering accounts and accelerating retail growth.
Use of proceeds
Until now fresh-range has been entirely funded by the founders who have committed over £1Million of investment. With the concept and technology proven and both retail and catering customers adopting the service in impressive numbers fresh-range is ready to further boost growth via our first external investment round.
This investment round will deliver two areas of development for the company:
1. Delivering ultimate convenience: Our goal has always been to make buying from local producers as convenient as any other mass player. This funding is to enable next day delivery – to further drive customer trial, retention and order frequency.
2. Marketing to retail customers: To date, the marketing of our retail service has been light while we built our producer network to ensure a full range of food and drink. We've honed the model to drive spend and loyalty. Now is the time to boost consumer awareness and usage across The West of England with a high impact marketing.
Please note, the company has an asset finance loan on a van with repayment terms of £198 per month over the next 35 months, and a lease agreement on a cold storage unit with payment terms of £558 per month over the next 24 months, and the option to purchase the asset at the end of term for payment equivalent to a further 3 months + VAT. Proceeds from this round will not be used to meet these payments.
Individuals, companies and institutions (hospitals, schools, universities and councils) who care about food provenance and sustainability:
1. The retail food shopper:
• We are a nation of foodies: We seek engaging food with a transparent story about where it comes from. What’s in it? How it is made? Expectations on provenance are increasing.
• We split our food spend more than ever: fewer of us have one favourite supermarket and do a big weekly shop at the hypermarket. The shifts in market share and emergence of new players (eg. Lidl & Aldi) in grocery demonstrate unprecedented dynamism in the market. The Retail Think Tank says new entrants to the grocery sector could boost opportunities for locally sourced or ethical food: “Advancing technology will offer greater choice for customers, but present huge challenges for the established sector leaders.”
• We shop online for groceries: Time-poor households need home delivery convenience.
• We love local: 70% of us would like to eat more local food yet a tiny fraction of food is locally sourced by supermarkets.
• We now use web-based apps habitually in conventional markets - Taxis (Uber), takeaway delivery (Deliveroo), going away (AirBnB), music (Spotify) and TV (Netflix) are all examples of where we are willing to embrace tech-based innovation.
2. The catering chef:
• Chefs’ customers expect local produce with provenance: Conventional mass food service companies struggle to provide this.
• Catering chefs need convenience: Working with independent producers is complex to manage and the convenience of ordering a consolidated delivery at the required time trumps working directly with farmers in most cases.
• Catering chefs need cost effective produce to hit their gross profit target: Shorter supply chains can deliver lower prices on fresh food.
• Public sector is increasingly compelled to procure sustainably: Reduced van journeys via consolidated delivery; local dynamic food procurement; and Food For Life program compliance which requires sourcing from local, organic and higher welfare farms.
Characteristics of target market
The target UK market for fresh-range is worth £96.9 billion annually made up as follows:
1. Online grocery retail - direct to consumer (£9.8bn in 2016 – source Mintel).
2. Private catering (£82.9bn in 2016 – source MCA).
3. Public sector, business & industry catering (£4.2bn in 2016 – source MCA).
The online grocery retail market is forecast to grow a further 73% to reach £15 billion by 2020 (source Mintel). The food service market grew at +2.3% in 2016.
Partnership networks: Our regional focus enables us to work closely with other local groups to reach interested customers. We are establishing or have established partnerships with Local Authorities, the NHS via hospitals and GP surgeries (www.cardiologistskitchen.com), local food websites, and local producers.
Events: We feature prominently in major regional food events. “Eat Local”, “Food Connections”, "The School Food Cook off" (https://www.youtube.com/watch?v=X0lnhF8zNwk) and we have co-led a recent "West of England Food Procurement conference" for public sector food buyers across the region.
Social Media: We have a passionate following on Twitter, Facebook and Instagram.
Customer to customer – We have a 5/5 customer rating and so customers voluntarily tell their friends and neighbours about us. We run a reward scheme that says thanks to customers for this and an introductory discount for new shoppers.
Producer to customer – We work with our producers to bring them to life beautifully on our online stores and in return they recommend customers to us.
SEO – Our advanced website is Search Engine Optimised. The dynamic and rich content on local food is strong making it feature high on Google rankings for relevant searches.
PPC – A highly targeted Pay Per Click advertising campaign ensuring our cost per customer acquisition is kept to an absolute minimum.
Traditional advertising – Highly targeted advertising via local media and door to door.
Account Management – A consultative selling approach for catering customers in private and public sector. We take a partnership approach with B2B customers rather than selling transactionally. This results in stronger customer acquisition and retention performance.
Within the online grocery market Tesco are, by far, market leader followed by Sainsbury’s, Ocado and Asda. Morrisons (via Ocado) and Waitrose also play in their own eCommerce offer but on far lower market shares. These players suffer from customer perceptions that food isn’t fresh enough (source: Mintel). Provenance is weak or non-existent, food can be stored and transported over large distances and there is little or no support of local producers.
Abel & Cole and Riverford are two well established organic veg box schemes. HelloFresh, Gousto and a growing tail of others deliver recipe boxes via couriers. All of these are delivering nationally from centralised distribution hubs. These players are similarly weak on local provenance and with limited delivery convenience.
In the catering channel and public sector procurement market, the key players are Brakes and Bidfood along with a long tail of regionally based conventional wholesalers.
There are two fundamental points of difference setting fresh-range apart from competition:
Firstly, fresh-range’s ‘Click to pick’ approach to food supply (where producers prepare foods to fulfill actual customer orders just before we deliver it) coupled with the convenience of a choice of delivery slots or low cost 'anytime deliveries' delivered even when customers are out. The reassurance that fresher foods are coming direct from the source, never from a supermarket shelf addresses customer disappointment with mass online grocery stores and the desire to support local producers and eat food from sources they know personally.
Similarly, in the catering channel fresh-range’s technology enables a ground breaking dynamic procurement approach combining large scale suppliers alongside local producers with full traceability and provenance. This is an area where big food service companies struggle to compete, supported by a recent local authority review of providers that chose fresh-range as the only supplier to meet all requirements.