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Ethical business   |   Farming   |   Environment & ethics

Farmdrop suppliers form new collective after company goes bust

A group of farmers and former suppliers to food delivery firm Farmdrop have formed a collective to continue supplying customers and avoid lost sales and food waste after the company went bust late last week.

News that Farmdrop has gone into administration was met by shock with suppliers and employees, who found out via an email at 11pm on Thursday night. Meanwhile customers have been left without Christmas food orders, much of which had been delivered to the company’s depot in Enfield, north London, as late as Thursday afternoon.

Over the weekend, social media has helped spread the names of suppliers affected and encourage people to buy their food direct, while four south west suppliers – Sladesdown Meat, Sole of Discretion, Purton House Organics and Perdon Organics – have formed South West Produce, to create one point of contact for customers to continue buying from them.

The group are promoting themselves through a new Facebook page, with sales coordinated through Sole of Discretion’s page on the Open Food Network.

“It’s been lovely to have a bit of positivity – because otherwise you’d just want to put all your produce in the bin and hide in a hole,” said farmer Daniel Mason, of Sladesdown Meat, in south Devon.

“It was all set up within an hour and we were live by 4pm on Friday. It’s quite rough at the moment but it might actually become something.”

Mason, who said Farmdrop owed them £40,000 at the time of going under, raises turkeys, ducks and other meat, on his small farm in south Devon. “It is sad. We are licking our wounds and wondering about January and February. We have bills to pay and Farmdrop’s income would have helped that. We haven’t had the best year.”

Selling also into restaurants, Mason said the news has come on top of slow orders from hospitality, where businesses are nervously awaiting news of a lockdown.

“I am a bit hacked off. There were some really good people who work for them,” he said. “There are a lot of producers out there with a lot of stock going there, and a lot of customers who wanted it. We’re now shipping direct to some of those customers but it’s a lot more cost on our part.”

Turkeys
Sladesdown Meat in Devon raises turkeys and geese for Christmas. 

While several suppliers described Farmdrop’s team as ethical, good to work with and “kind”, there has also been concern about the company’s financial situation and shareholders.

Farmdrop’s company accounts for 2019-20 reported a pre-tax loss of £9.95 million, and in the statement supporting the accounts on Companies House, (published in July this year) auditors stated there was “material uncertainty” of the company’s “ability to continue as a going concern”. The accounts also reported that the chief executive was paid £185,000 in the same year.

Farmer John Malseed, who supplied turkey and geese to Farmdrop, said: “We were one of the luckier ones. We got a deposit off them because they were in the red for two months before. So we had that which indirectly covered the produce they had from us, and we’ve managed to sell the rest directly to customers.

“They lost £10 million in last year during Covid, when everyone bought online and local. For a small producer like me, it’s blown my mind.

“When you talked to them it was always ‘there’s no problem’. But in my eyes it didn’t make sense, so we asked for a deposit,” he said.

Mason, who said he will have around 40-60 organic geese left to sell, added: “Any problem was dealt with quickly and kindly, and they were really open. That’s down to the characters rather than the shareholders or the top management.

“One of their downfalls was that middle management were happy to splash the cash. If you lost a crate, for example, they would say don’t worry we’ll cover it,” he said.

Caroline Bennett, founder of Sole of Discretion, a Plymouth-based ethical fish supplier that buys only from boats under 10 metres, said: “Once the third round of private equity was put in place, including the Duke of Westminster, the payment terms were put back to six weeks, this for me was the beginning of the problems. The writing was on the wall.”

But she also stressed the ethical approach of Farmdrop, at least in its early days, where it took out the stress of logistics for small-scale suppliers, provided rapid payment terms and negotiated fairly on price.

“My conclusion is that to truly reward small-scale producers in the current climate of super-market dominated cheap and planet-unfriendly food, there needs to be change in legislation, tax on processed food, tax on meat, tax perhaps even on packaged vegetables,” she said.

Farmdrop was backed by a range of private equity and venture capitalists, including Atomico and The Wheatsheaf Group, which invests in a range of agri tech companies.

Ownership of a company is crucial to how ethically it is run and managed, according to Natasha Soares, founder of the ethical retail network Better Food Traders.

“Although Farmdrop’s stated purposes were somewhat similar to those of many Better Food Traders, we were aware that Farmdrop’s private company model was venture capital-funded, and have serious doubts that this approach can deliver the long-term, patient and committed backing that truly sustainable food production and supply requires, especially in the current profit-driven economic paradigm,” she said.

“Until farming and food supply are valued as highly as they should be, with fair rewards to those producers and businesses whose work prioritises caring for earth’s life-support systems, it seems unlikely that there will be enough money to also provide returns to investors.”

While the short-term the focus is on recovering produce for Christmas, farmers are now beginning to think about the New Year.

Director of ethical meat supplier Pipers Farm, Abby Allen, said: “Our advice is for people to support Farmdrop’s producers directly, and to do so for the coming months.

Pipers Farm is not directly impacted by the closure, but said it knows and works with many of the farmers affected and has been contacted for help.

“This is a tight-knit community, we all know each other and we’re all trying help however we can,” said Allen. “We need these family farms to survive. We don’t get government support or subsidies, nor do we suffer the same issues as the industrial supply chain (i.e. the pig culling on farms seen this year), yet we are the ones changing the system for the better and building our own market."

Mason added: “It makes you realise how small you are in the world, it’s like David and Goliath. I know some Farmdrop employees have had to explain to their children that Christmas won’t be the same, and I know how they feel as I’ve said the same to my children.”

In a statement replacing their website homepage, Farmdrop said: “As of 15th December, it has become apparent that we have exhausted all possible options. It is with very heavy hearts that we must let you know that we will no longer be able to serve our cherished customers. 16th December will be the final day of deliveries.”

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