What are your business plans now you run Mr Fothergill's?
JF Dave and I are the next generation of the business. We have our own agenda and plans. Over the past three or four years, we've been given the opportunity to develop the business.
DC People are quite surprised about what we do. They have no idea we have Russian and Greek product packaging. That's part of how we compete against Suttons and Thompson & Morgan. We're still the new boys on the block even though we've been around for 35 years.
What innovations are you bringing in?
JF We were the first company to specify average seed fill on packets in the 1980s, the first to introduce native British wild flower seeds, the first to do fun seeds aimed specifically at children and the first to bring an app to the market for iPhones. We do have very good growth and we want to develop that growth and distribution further both retail and mail order. We are the UK's largest exporter of plant seeds. We have a wholly-owned subsidiary in Australia and a distributor relationship with a company in Canada. We've been in Russia for 10 years with bilingual packets and 8,500 finished goods lines. We bought extra machines at the end of 2012 and now have the capacity to produce 200 million packets a year with multiple shifts. We do 60 million, so how will we fill that capacity is the question.
How are your business operations split up?
DC We have three units — retail UK 60 per cent, mail order 15-20 per cent and export 20-25 per cent in packet volumes. The rest of the world is a very big place compared to what we might achieve in the UK. There's a handful of multiples we'd like to be in — not massive game changers, though we would like to have Tesco.
JF We are ambitious and acquisitions remain on our agenda.
How did you deal with Focus and Woolworths closing?
DC Wilkinson and small hardware stores will have picked up that volume from Woolies and Focus, who were two big customers for us. But grow your own happened while that was going on and that's been driving the traffic. Of the big boys, that is probably the end. I can't see anything bad happening to Homebase. We expected to see smaller garden centres and high street hardware shops go, and that didn't happen.
How have you coped with the tough early season?
JF Maybe the weather is returning to climatically cold winters, but grow your own is still robust and packet seeds are a relatively inelastic product with potential to save money on growing. The biggest threat is the impact of poor weather last year and novice gardeners being put off, combined with economic weakness.
How is your celebrity Sarah Raven range performing?
DC Sarah Raven is selling very well and has sold to all our multiples and garden centres, and it is driving sales back from vegetables more towards flowers. Flowers are having a big resurgence, especially mixtures, and Sarah Raven is stronger than budgeted and forecast. Bees and butterflies is bang on message but cut flowers have been more of a surprise. Celebrity ranges push us into areas where we're not currently listed and bring in new buyers. They give us a reason to talk to someone about something different. They have to have a good reason to change supplier so we use Sarah Raven as a door opener as well as an add-on to what we do. If the Sarah Raven range overlaps it doesn't cost more, but that has been the case in the past. We're taking the hit for that. If it's a comparable product the price is comparable, but if different it will be a little bit more expensive.
Can you tell us more about your ranges?
JF Our premium range is Sarah Raven and Johnsons is a higher price brand. Mr Fothergill's is all things to all men and we have Country Value if they're on a budget. The budget market is enormous and lots of garden centres are ignoring it. Multiple owners aren't. We invest a lot in product development and quality seed-germination rates. Provenance is important to us. We know all the suppliers and have worked with the vast majority for many years. Veg seed-germination rates are governed by EU law and we set high standards for flower seeds. If multiples didn't demand such big discounts on seeds we would be able to offer cheaper seed to the consumer. Their demands go up and up but generally seed offers tremendous value for money and we can offer different price points. In recent years seed has been seen as a cash cow by certain retailers. They are guaranteed to sell 95 per cent of the time so retailers have the safeguard.