Sustainable entrepreneur: River man

In 20 years, organic farming has gone from folksy niche to seriously mainstream. Riverford epitomises the speed and scale of that shift. Its founder Guy Watson talks to Martin Wright.

All across the hills above Riverford Farm, the rolling acres of south Devon pitch and soar, topped with tree clumps and hovering buzzards.

So far, so bucolic.

But look down the lane to the ‘farm’ itself, and you’ll look in vain for ancient cob walls, thatched roofs or orchards.

Instead, there are acres of car parks and offices, vast sheds full of vegboxes to be loaded onto Riverford’s fleet of lorries, and rows of staff at computers processing payments and tracking orders. On a nearby slope, the latest addition: a stylish new restaurant, all tasteful blond wood walls, floor-to-ceiling windows and solar panels on the roof.

‘Muck and magic’ this ain’t. It’s more retail park than back to nature, and there’s logistics software whirring away at its heart to rival that of the slickest supermarket.

But there the affinity stops. Guy Watson hasn’t exactly been a fan of the big retailers since one afternoon back in the early ‘90s, when, as a budding organic farmer, he put in a call to a Safeways buyer.

“I’d already spoken to this guy a few times, talked about the sort of things we might grow for them. Then I phoned again, and he said, ‘OK, we need you to come up to London to discuss details – come on Thursday.’

“I said I was going to be up anyway that weekend, so was there any chance we make it Friday instead? And then the line went dead.

“So I called him back: ‘I’m terribly sorry, I think we got cut off...’. And he said: ‘No, sonny. When we whistle – you jump.’ Those were his exact words.”

Did you still go to the meeting? “Did I hell! I was absolutely flabbergasted. I tore down the pack house I’d begun building [and] started up the box scheme.”

“It was quite a leap from the cool corridors of the City to getting his hands dirty in the Devon mud. Didn’t anyone tell him he was bonkers?”

Fifteen years on, Watson doesn’t need to jump for anyone. With a staff of 250 and a turnover pushing £25 million, Riverford Organic Vegetables rolls out 35,000 boxes a week to people’s doors from its Devon base alone, and thousands more from spin-off outfits around the country. It’s a triumph of precision management. And at first it doesn’t seem to fit with Watson’s manner, which could best be summed up as a sort of genial, if slightly world-weary, insouciance.

He’s a good looking man, with his tousled thatch of dark hair and lazy smile, and has that easy confidence which often goes with a life of land and privilege. The land is there, but privileged? “Well, my Dad was a tenant farmer, and I pretty much grew up milking cows.” In between stints in the parlour, though, he won a place at Oxford, and emerged with a first. “It was a first in Agriculture, admittedly, but you could always call it ‘Natural Science’ – that sounded better! Anyway, it opened a lot of doors.” One of them was into the lucrative world of management consulting. Shaking the soil off his shoes, he threw himself into a life in the City. “I loved it. I loved the creativity of business. It was immensely stimulating. But after a few years I’d had enough. I just physically could not stand another day in the office, another day on the phone. Which is ironic, because that’s how I spend most of my days now...”

The pull of the farm

So in 1985 it was back to Riverford – and back to the bottom rung of the ladder. His father lent him a couple of fields, and Watson set out to make a living the hard way, as an organic farmer. Why organic? “Two reasons. First, I didn’t much like using agrichemicals. I’d sprayed corn as a teenager and it made me sick, and one of my brothers had just had Paraquat poisoning, and he’d been really ill. Second, it looked like being an emerging market. People were talking about it a lot, so I decided to do it.”

It was quite a leap from the cool corridors of the City to getting his hands dirty in the Devon mud. Didn’t anyone tell him he was bonkers? “I didn’t listen to them, to be honest. I just put my bloody head down and got on with it. Worked 80 hours a week virtually every week of the year”, sowing, weeding, lifting vegetables, transporting them in a wheelbarrow to the back of his car, and on to a few sympathetic local shops. “I grew an awful lot of leeks that first year... I had three acres, and turned over £6,000, of which £4,000 was gross profit.”

“I didn’t listen to them, to be honest. I just put my bloody head down and got on with it.”

Growth was slow at first; his brother’s farm shop, a few local stores, then a London wholesaler. By 1990 he was selling in bulk to Organic Farm Foods, which supplies all the major supermarkets. Three years later came his ‘Safeways moment’, and the launch of the box scheme. This took off so well that by the end of the decade, Riverford could afford to turn its back on supermarkets for good. In 1997, Watson launched a co-op which now includes 16 local farms. Together with Riverford’s own land, they supply four-fifths of the vegetables sold in the boxes (the remainder come from elsewhere in the UK, or, along with the citrus fruits, from Europe).

Vegetables alone, however, aren’t the answer. “Our main problem is that people just don’t eat enough to make it really worthwhile. We’ve done surveys and found that 48% of our customers have veg left over at the end of the week. That’s the reality of a perishable product. We can’t get away from that.” (Which makes you hope his customers are all committed composters.) Instead, they’re diversifying, looking at meat, dairy produce, and, increasingly, premium lines, such as wines, preserves, olive oil, and “my brother’s chutney”. These are proving real money-spinners, accounting for around a third of sales, “and probably more than a third of our profits, even without any promotion. There’s real potential there.”

It sounds a promising mix: people motivated to buy their virtuous veg for all the right reasons, but delighted to be able to reward themselves with little treats on the side, all in one box...

Meanwhile, if you’re one of the many who assume there are no jobs in farming, try this. “We’ve got around 1,400 acres under cultivation; 250 staff of our own, and another 60-100 on the co-op farms... That’s three to four jobs for every thousand box deliveries.” Even allowing for the fact that some of the produce is imported, this makes a pretty impressive ‘acres to jobs’ ratio.

Pretty sustainable stuff

The company’s now one of the area’s biggest single employers. But Watson’s reluctant to keep growing. “The benefits of scale as you get larger are intellectual, really. They’re to do with knowledge. So we have a lot of technical knowledge about growing vegetables, about storing them, marketing them, selling them... It sounds boring, but just getting a good deal from the credit card company for all the online orders makes a huge difference to the bottom line.”

Backed by “an incredibly expensive IT system”, Riverford is now rolling out its model to a series of spin-off companies across the country, with an investment mix of ownership stake plus royalty per box sold. So far there’s one on the River Nene near Peterborough, one on the River Swale in Yorkshire, and a co-op with no river in Hampshire; others will follow, up to around eight all told, each sourcing the bulk of their produce from local growers, and delivering it around the region.

Ex-Greenpeace head (and Labour peer) Peter Melchett is unstinting in his praise. “It’s an amazing operation – and I can still remember the taste of a strawberry from one of Guy’s fields, which was absolutely delicious!” Now policy director of the Soil Association, Melchett is particularly impressed with new evidence suggesting that the prices of Riverford veg are competitive with that of non-organic produce in local supermarkets – “which, when you think about it, is extraordinary”. And, he adds, Riverford has had a spin-off effect, its advertising and reputation helping increase take-up of other organic box schemes too.

So, socially and economically, this seems pretty sustainable stuff. And organic farming scores high on environmental benefits, too. But what about all those hefty trucks, thundering down the Devon lanes and out onto the motorways, at all of, oooh, eight miles per gallon? Doesn’t that rather give the lie to ‘local sourcing’?

“Well the average journey for our produce is 130 miles,” responds Watson. “Eventually [as the spin-off companies kick in] we hope to get that down to 50 miles. You have to remember that while our trucks may only do 8mpg, there are a 1,000-plus orders on each truck.” By comparison, he says, the field to shelf journey for supermarket produce can be as much as 500 miles. “Then you’ve got to get it home. That means lots of individual car journeys, which in carbon terms is very significant.” Of course, a single Riverford box can’t be a substitute for all supermarket trips by any one family – though it could cut down on their frequency.

But then there’s the imported produce; only 12% by weight of vegetables, yet 70% of the fruit – including all the citrus, and even apples out of season. “That’s a bit horrific,” Watson admits, but short of telling people they can’t have oranges in their box, it’s hard to avoid. Meanwhile, he’s embarking on a thorough carbon audit of the business, as part of a knowledge transfer partnership with Exeter University. “I think it will be fascinating. We’re hoping for some real concrete suggestions as to how to improve.” And of course it will be “very useful from a PR point of view” – providing some hard data on just how Riverford matches up to the supermarkets.

Talking of which, several of the major retailers, including Tesco, Sainsbury’s and Waitrose, have now paid Riverford and their ilk the ultimate compliment: they’ve launched their own range of vegbox schemes. Scary competition? “Well, people buy from us because they trust us and they trust the way we do business. I suppose some people trust Sainsbury’s or Tesco or whoever, too! But from what I hear, the supermarkets aren’t selling that many boxes as yet. So, no, I don’t really see it as a direct threat.”

“Mind you,” he adds, “anyone would be very foolish to write off Tesco. Now that would be arrogance!”

24 June 2007

Martin Wright