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Sunday, September 25, 2022

Guy Singh-Watson: Riverford founder still digging for the future | Food & drink industry

Guy Singh-Watson has gone totally nuts. He’s striding through a field of saplings, lively spaniel Artichoke bounding around his feet, extolling the virtues and drawbacks of growing walnuts, hazelnuts and chestnuts.

At 61, and having sold a majority stake in his Riverford organic veg box business to employees four years ago, Singh-Watson could be forgiven for slowing down. Instead, the keen sailor and surfer has caught the next wave.

Some of his Riverford money has been invested in the nut trees, and he also has a composting project, to use biodegradable packaging and boxes from the company’s vegetable deliveries. He has converted outbuildings on his farm into space for small business startups. And he bought a small yacht, whose bow can be seen poking out of a barn.

Started in 1986 as experiment in growing organic vegetables on the family farm, Riverford began by supplying supermarkets. Tiring of that, in 1993 Singh-Watson started using an old Citroën to deliver the produce to about 30 friends.

During the pandemic, families across the country turned to home deliveries as a way to dodge the virus, and Riverford’s veg box sales soared to 85,000 a week at the peak in 2020, from about 50,000 at the start of that year. The demand propelled turnover to almost £110m in the year to May 2021, compared with £75.7m before the pandemic.

The company made a pretax profit of almost £12m (after a £1.5m loss the year before), Its workers received a profit share of £3,800 each, whatever their pay level, and £1.8m was ploughed into climate and biodiversity measures.

Singh-Watson, who added Singh to his name after his second marriage in 2014 to restaurateur Geetie Singh, says sales could have been higher had Riverford had more capacity. It is now pondering investing £20m in a new packing house.

Riverford has stolen a march on the major supermarkets by making all its food packaging biodegradable, at an additional annual cost of £500,000. It is in the process of converting its fleet of delivery vans to 100% electric by 2025. It is also testing out e-cargo bikes for deliveries in some urban areas and has stopped dealing in products with too big a carbon footprint – such as New Zealand apples.

These efforts have helped Riverford hold on to its recent converts. In the year to May this year, sales are expected to hit £112m and profits about £7m, with another bonus for workers expected.

Singh-Watson sees this as vindication of his decision to hand majority ownership to the staff, rather than the potentially more lucrative alternative of private equity investment. He believes employee ownership helped the business through the tough times of the pandemic, when demand shot up and labour was scarce: “people were prepared to go that extra mile”.

“We were asking people selling veg boxes to drive vans, and people from offices to go into the fields – and on the whole they embraced it pretty well,” he says.

Finding people to pick and pack crops from the fields continues to be a challenge since Brexit put paid to the ready supply of “brilliant, skilled, hardworking and hardy” eastern Europeans who have worked there for about 20 years. Working holidays for students is one alternative Singh-Watson is mulling.

“This year we are reasonably confident we will get enough staff, but there is no doubt about the direction of travel. Getting people to work in physical jobs on the land is getting more and more difficult,” he says.

Brexit has hit the business in other ways, including increasing the cost of importing produce from Singh-Watson’s farm in France during the winter. He says the changes have added about 4%, due in part to the additional paperwork and also to the extra staff to deal with problems such as extra waste caused by a lack of flexibility on shipments.

“We will adjust, but for what?” he asks. “Where are the upsides? One day we may be better off, but look at the world we’re living in. We’re better off with Europe than having to negotiate with Putin and China.”

Singh-Watson's hands with freshly picked purple sprouting broccoli.
Singh-Watson with freshly picked purple sprouting broccoli. Photograph: Jim Wileman/the Observer

The nut orchard is Singh-Watson’s latest brainwave for producing sustainable food close to home, part of a project in which a tree is planted for every new customer recommendation from existing clients. He’s convinced those same customers can be persuaded to buy more nuts and less meat to help save the planet.

“I don’t think we can rely on food from abroad. With all the disruption in the world it is obvious that long global food chains will be a thing of the past. If we can’t produce most of our own food and energy, we are in a pretty dangerous position. We need to find more ways to do that in harmony with nature, and that will probably mean paying a bit more for food – if only marginally.”

The group put its prices up by between 4% and 5% in January and Singh-Watson warns that prices may have to rise again before the end of this year as fuel and other costs continue to rise. With that in mind he is wary of banking on continued expansion this year.

“The world is full of so much disruption. We had Brexit and then Covid-19 and now a war, and that’s totally disruptive to trade patterns. We are talking about a massive squeeze on incomes. Anyone who assumes things are going to continue as they are is a fool.”

He says he learned that lesson from the 2008 financial crash, when Riverford was caught out by a downturn in sales of organic foods as families concentrated on saving cash. But despite the pressure on incomes, he believes Riverford will continue to have a place on families’ shopping lists.

“I feel confident, whatever the trends in supermarkets and the media, that people want a healthier diet that comes from less distance, and is produced with environmental [care]. They want to know where their food comes from.”

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