The accidental artisan food specialist
Artisanal food brands proliferate today but going back two decades things were very different when Cotswold Fayre accidentally came into existence and has since gone on to play an important role in helping build the category.
The company today supplies as a wholesaler the products of over 400 brands into around 2,000 retail sites and has in recent years begun to operate its own large scale farm shops, under the Flourish brand, which it uses to showcase the range in its wholesale division.
With a combined turnover of over £30 million this is some achievement for an operation that Paul Hargreaves, founder of Cotswold Fayre, admits came about unintentionally when he sought to sell products from his in-laws’ meringue-making business into farm shops.
Struggling with suppliers
Never Miss a Retail Update!“The retailers loved the product but struggled with such goods because they were all delivered by the individual suppliers. They asked whether I would consider supplying the meringues together with other products and so I started Cotswold Fayre by accident,” he says.
Twenty five years on he reckons he was in the right place at the right time as he hit the market when farm shops were beginning to turn from sheds into proper retail businesses that required products.
“At the time the supermarkets weren’t selling these brands so there was very little supply into the market of artisan foods,” says Hargreaves, who has continued to ride the wave of growth.
Although the supermarkets have long since picked up on the trend, beginning with Waitrose and then Sainsbury’s, he says there is still room for differentiation by independent specialists because there are so many more products around today. The rationale for choosing what products he stocks has also changed.
“Back then it was about – does it taste good, have nice packaging, and is a good price – but now it’s questions about sustainability, where the ingredients are from and it now needs a marketing budget so what are they prepared to spend? There are so many brands out there that we have to be selective,” he explains.
Harvesting the range
The plan is not to increase the range but since he looks to take on 25/30 brands each year the equivalent number, therefore, has to go. When the company had its own warehouse there was a finite space but since the outsourcing of this function that in effect provides unlimited shelf space this means Hargreaves has to be disciplined with the range.
He says the likes of Ocado and Whole Foods have similar problems and will come to Cotswold Fayre with brands they are unable to take on. “They are the same as us in wanting new stuff, but from existing suppliers,” he says.
Along with managing the range Hargreaves has to pay equal attention to the other side of the equation – the retailers he supplies into. This currently encompasses a broad mix of operators from farm shops, which account for 30% of sales, delis, garden centres, convenience stores, which has grown to 13% of sales, department stores, and online retailers, which is now accounts for a hefty 30% of revenues.
The new strand to the business is its own retail units that came about in 2021 when an opportunity arose through Paul Castle who now heads up the retail division. He had been looking to run a store for a group of farmers but when it fell through he approached Hargreaves to get involved.
Showcase for Cotswold Fayre
Having initially declined he took a look at the site and recognised that it was better located than most of the stores he supplies. He also thought he could “do better than many of my customers” with the offer, which would be a great way to showcase the Cotswold Fayre range.
What was new to him was the food and beverage (F&B) element that would be an integral part of the Flourish Foodhall & Kitchen proposition. For this he sensibly brought in expertise: “I’d not have done it on my own. Paul has the experience. It was an absolute nightmare when we opened at the end of the last [Covid-19] lockdown with 20 people short of what we needed. It was complete carnage.”
Despite the difficulties he knew F&B would be a great footfall driver to the retail part of the stores and at the first unit in Glenavon Farm, near Bristol, the restaurant represents 60% of sales versus the 40% for retail. The second Flourish site, at Farleigh Road near Bath, which opened in November, is more of an even split between the two because there are less food retailers nearby.
Both stores are serious contributors to the overall business with a combined near-£6 million of sales and profitability has been boosted by the cost-savings that have been achieved by centralising the likes of marketing and admin as well as some of the food preparation including the butchery.
Rising costs of labour
This is just as well because Hargreaves says the cost of labour for F&B has been an “eye-opener, with a huge amount more people” needed compared with the wholesale division. For a comparison wholesale’s £25 million of sales requires 40 people whereas the retail business with its hospitality element and £5 million of sales employs 110 people (including part-timers). The forthcoming NIC changes will have a much greater impact on this part of the business because of its number of part-time employees, says Hargreaves.
The success of the Flourish stores has led to the strategic decision to have five outlets in operation by 2030 within the Bristol/Bath area. Although this will add meaningful sales to the organisation Hargreaves says Flourish will never be more than 30% of revenues as he expects to grow wholesale at a faster rate. He points out that it was only seven years ago that he added chilled products to the ambient range and that frozen was only added last year, which represents a strong avenue for future growth.
He is also excited by the opportunity of working with Marks & Spencer and Ocado who he says he has begun curating ranges for. This could involve creating a selection of regional goods for each store. Although these projects are very time consuming to put together he recognises the serious financial upsides.
People are everything
All these strands to the business rely on the people within the organisation that Hargreaves says is his primary focus today. “People are everything. If you do not think that then you are deluded. My main focus is our people and culture. I believe in investing in people and that if they have a happy place to work then everything else works,” he says.
He is an advocate of people being free to express their emotions at work and he has sought to build a community around the workplace. “There is not as much community [generally] as their used to be and as business leaders we need to see this and enable people to have this community relationship at work,” says Hargreaves.
This mindset has led to the business featuring in the annual ‘Sunday Times Best Places To Work’ list and the company has a very low staff turnover compared with the average across the rest of the industry. He says there is a mere 2% ‘flight risk’ of people leaving versus 20/25% for the rest of the industry.
This has also meant recruitment has been a little easier for Cotswold Fayre and Flourish: “We get a lot of applications for roles and lot of emails requesting that we keep them in mind for future roles.” Also helping with recruitment is the B. Corp status of the business that Hargreaves pushed for some years ago.
Now that B. Corp is more widely known he has found that it attracts an increasing amount of people who specifically want to work for businesses with this accreditation. It is also a growing community that now includes 80 of the brands that supply into Cotswold Fayre.
