Dairy Event 2010: Expanding into the retail sector

Like many beef producers, Bridget Borlase felt a change of direction was needed to her part-owned and part-tenanted beef operation to add value and boost revenue, so looked at wholesale marketing as a way of boosting cash flow at Sacombe Hill Farm, Hertfordshire.

“Although we started by attending a few farmers’ markets a month, we knew we had to expand as carcass balance was quickly becoming an issue,” explains Miss Borlase, who runs the pedigree Simmental herd and arable farm alongside her parents Paull and Judy and her partner James Hale.

Having approached some of the stallholders selling pies and processed foods, she soon found an outlet for mince and some forequarter cuts which had proved hard to market, but this still wasn’t providing the premium price required.

The business then grew to supplying local pubs and restaurants, but that’s hard work, explains Mr Hale. “Chefs tend to put their orders in the night before, so it means you’re up late waiting for orders and often involves a lot of chasing.”

Six months in, the need to expand was greater, but having spent all day farming, it was proving difficult to start working in the converted on-farm butchery at night preparing for pubs and restaurants.

But it isn’t long before a business growing at such speed needs to invest in machinery and staff, explains Miss Borlase. “Demand for burgers for example, soon rocketed from making 40-50 a week by hand to thousands,” she adds.

Within two years, Miss Borlase and her family had taken the £2000 a month turnover from boxed beef at farmers’ markets to £250,000 a year, supplying local pubs, restaurants, private caterers and other farm shops. But although that scale of revenue is appealing, she warns nothing can prepare you for the change in life and demand on you all hours of the day.

Legislation was also something she had to get her head round. “Fortunately we sought the direction of our local environmental health branch which has been a great help to us.” She advises anyone starting up to look carefully at legislation as certain loop holes mean some businesses fall under the Meat Hygiene Service and others Environmental Health.

For the first three years, Miss Borlase admits the business didn’t follow a structured growth plan, but growth still had to be managed. “Most opportunities in the wholesale industry happen by chance. You can’t predict the speed at which the business grows, or the demand for certain products. You simply have to be proactive with customers and try and provide what they want. The catering industry is fickle and won’t think twice about leaving you and trying a different source.”

In terms of business management, Miss Borlase explains at the very least you have to keep an eye on carcass costings and weights, but every carcass cuts differently so there is no blueprint to follow.

Pricing is equally difficult, explains Mr Hale. “It’s difficult knowing where to place yourself, but we’re at the premium end of the wholesale trade and have lost customers as a result of it, but after 3-6 months they’ve come back again purely because of quality.”

And for those thinking of going down a similar line, beware of how your bank manager may look at it, says Miss Borlase. “It’s been a bad few years for banks and they are obviously more cautious, particularly when it comes to wholesale trading. We run the butchery business as a separate entity, as the farm shop and wholesale business cannot run off the farm assets and must be treated as individual enterprises,” she explains.

“During peak periods we look at shifting 5-6 bodies of beef a week, 8-10 pigs, 12 lambs and up to 300 chickens which yields £15,000 a week. Christmas on the other hand can see us take £65,000 in the fortnight leading up to Christmas Day,” adds Miss Borlase.

So although this form of adding value isn’t for the faint hearted, it does reap its rewards, particularly when customers praise your products or comment on a wonderful Sunday lunch, she adds. “It’s been a fast learning curve and one that has been based on gut instinct and determination and not necessarily a strict business plan, but if we went back and did it all again, there wouldn’t be much we’d change.”