Food & Drink Insight. Edition 1, 2019

Food & Drink. Edition 1, 2019

How The Flavourworks achieved 10% yearon-year growth Succession planning, investment opportunities and high-value products; find out how The Flavourworks became such a successful business.

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Financial experts, fuelling ambition

Announcing Old Mill’s Food and Drink Business Advisory Programme 24

Braving the change – making big business decisions 12

Going international - BIC Innovation 10

Welcome

What we do goes way beyond preparing a set of accounts 2

Food & Drink Insight Edition 1, 2019

Welcome

In recent years Old Mill has demonstrated its commitment to the food and drink sector in the South West through our sponsorship of trade bodies, our attendance at trade shows, and by getting involved in judging at other food and drink events. This has been a key focus for the team and something we love doing.

Welcome to the new-look Food and Drink Insight, following our rebrand earlier in the year.

This edition has an array of interesting articles that covers the entire spectrum of the supply chain.

We are delighted to be able to showcase some of the work we do with our clients as we go behind the scenes, so to speak, with Dorset Blue Vinny and The Flavourworks.

Technology is a key focus with an overview of how Xero’s app-based ecosystem is fuelling growth among forwardlooking, tech-savvy businesses that are embracing the shift to Cloud-based accounting.

Looking beyond Brexit (finally) BIC Innovation provide some practical pointers around tackling international sales which will become more important to West Country food and drink businesses seeking to diversify and open up new markets.

This Insight dovetails with tips from our own Lorraine Bolland on how to engineer change – often a daunting task for any business.

Aside from supporting the industry in this way, we are also keen to try to help business owners understand how we can add value, because what we do often goes way beyond just preparing a set of accounts for a client.

We are also keen to put something back into this exciting sector, so we are delighted to announce the launch of the Old Mill Food and Drink Business Advisory Programme in conjunction with our partners, Taste of the West.

No matter where you are on the ‘lifecycle of a business’ journey, we aim to provide thought leadership and practical advice that makes a difference. So why not come along to one of these sessions; they will deliver actionable content and access to our expert team who are passionate about the food and drink industry.

Phil Mills Head of Food and Drink

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Contents

Your Old Mill Contributors Kim Barnard, Group Marketing Manager 01935 709360 kim.barnard@om.uk

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Lucy Bennett, Audit & Accounts Assistant 01935 709320 lucy.bennett@om.uk Lorraine Bolland, Director 01935 709368 lorraine.bolland@om.uk Phil Mills, Head of Food and Drink 01392 351333 phil.mills@om.uk Stacey Morrison, Xero Manager 07854 417929 stacey.morrison@om.uk Mark Neath, Director 01392 351308 mark.neath@om.uk David Rice, Director & Financial Planner 01935 709349 david.rice@om.uk

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Jolyon Stonehouse, Head of Owner Managed Businesses 01749 335016 jolyon.stonehouse@om.uk

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Food & Drink Insight Edition 1, 2019

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Contents Case Studies

Think Tank

08 How The Flavourworks

06 The great vegan trend

achieved 10% yearon-year growth

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Helping Woodbridge Farm and Dorset Blue Vinny build a futureproof business

Legislation & Financial News

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Beyond Xero – how Xero’s ecosystem can streamline processes and fuel growth for food and drink businesses

News

20 The team behind

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Mill’s Food and Drink Business Advisory Programme

30 New brand for Old Mill

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Slicing your margins without eating away at your customers’ happiness Plan for the future by making a company will

Guest Spot

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the numbers

24 Announcing Old

Braving the change – making big business decisions

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Going international BIC Innovation Tuck into Cognique’s top 10 marketing trends for food and drink businesses West Country Food Adventures

Think Tank: The great vegan trend

The great vegan trend I’m not a vegan and I don’t think I could become one. I have done ‘dry January’ before, giving up alcohol for an entire month, so I understand how challenging it can be to give up something you enjoy.

However, the amount of people who are becoming vegan is rapidly increasing – and just like ‘dry January’, there are significant numbers joining in the Veganuary trend at the start of each year.

Regardless of my own ability to change diet, I think we can and should be learning from this trend. That may sound odd for an accountant who counts dairies, cheese makers, wholesalers, retailers and general purveyors of animal and alcoholrelated products amongst his clients; but there are reasons why it’s a good idea.

For example, I’ve heard it said that the overindulgence around Christmas time, balanced with the abstention in January, often creates what would be an ‘average’ intake over the twomonth period.

And during the festive season is the only two months of the year that Brits don’t talk about the weather (as much). They talk about food. In the build up to Christmas it’s all about the meat on Christmas day. Is it turkey?

Or are you trying beef? Or goose? It’s about the cheese you’ve chosen for Boxing Day, the wine you’ve bought to go with it, the locally distilled gin you’ve just discovered, the craft beer etc. After Christmas it’s the New Year diet – perfectly rational people try to give up the things they enjoy and hold dear to their hearts. The Veganuary movement has sought to capitalise on this by persuading ordinarily meat, dairy and egg-loving members of the

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public to give it a go.

And capitalise on it, they have. People are signing up in their droves, whether that be for a healthier lifestyle, in response to claims that it is better for the environment, or simply because everybody else is doing it. And it continues on through the year, into summer when people are wanting to ‘shape-up’, and adopt a healthier lifestyle. For some that may mean a move to more sustainably farmed produce or less red meat, for others it’s a switch to a completely vegan lifestyle. Either way, consumer buying habits are changing.

From a commercial perspective, it really doesn’t matter what drives the adoption of any given trend, it’s about making the most of the opportunity.

Sometimes this means changing your perspective. It doesn’t mean giving up on your core values, just working out how you can adapt while staying true to what you’re all about.

Gordon Ramsay is a good example; he once stated he was ‘allergic to vegans’, now he’s got a vegan menu at his London restaurant, the Bread Street Kitchen. I don’t know him personally, but I’d venture that his core values are all about producing topquality food and generating a profit – and the cynic in me guesses he’s realised that he can now do the latter with a vegan menu.

Ramsay recognises that changing trends should be seen as an opportunity rather than just a threat,

and data collected by consumer research specialists Kantar would seem to back that up. In a report in January 2018 Kantar found that the apparent pressure on meat and poultry farming was being ‘overexaggerated’ by press claims that we are all turning towards plant-based diets. It added: ‘More shoppers are buying into primary meat and poultry compared to last year.’

My personal view is that a heightened focus on what we consume is just what we need. It presents a huge opportunity to educate a wider range of consumers about where their food comes from, how it is manufactured, and the love, care and attention that goes into it. We are seeing an increased focus on reducing waste, packaging and plastics, food miles, and carbon emissions. With the way politics has shaped not only the UK, but also the world in recent years, we can be sure that life is changing.

So what better time than now to drive loyal customers for life? Whether collectively, individually or as part of some other kind of ensemble – South West food and drink has an opportunity to seize.

Phil Mills

Food & Drink Insight Edition 1, 2019

“It doesn’t matter what drives a trend – it’s about making the most of the opportunity.”

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Case Study: How we helped The Flavourworks

“Working with Old Mill is like working with friends who just happen to be accountants and tax specialists.�

Chris Ormrod MD of The Flavourworks

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Food & Drink Insight Edition 1, 2019

How The Flavourworks achieved 10% year-on-year growth The Flavourworks is one of the most innovative ingredients suppliers in the UK, creating exciting new flavour ideas for the country’s top supermarkets and foodservice providers.

Established in 1989 by Richard Bancroft (originally as Markus Products), The Flavourworks launch over 250 new lines every year and have developed some 80,000 recipes since the business began.

A time of change In 2018, The Flavourworks undertook a management buy-in/buy-out to bring in Chris Ormrod as the new MD, enabling Richard to retire. The challenges faced by the business were not untypical of many small and medium-sized enterprises (SMEs) in the sub-£20m turnover bracket.

For this project we focused on four main areas: • Succession planning • Attracting investment to take advantage of new market opportunities • Broadening the product range, steering away from commodity items and creating higher margin, value-added products • Restructuring The solution centred on a recapitalisation, and structuring a management buy-in, with the Old Mill team playing a pivotal advisory role.

Forecasting and due diligence As corporate finance specialists, we worked with Michelle Keating (The Flavourworks’ Finance Director) to create a financial model that would meet the due diligence requirements for bank lending.

We also supported The Flavourworks through its due diligence process and worked with lawyers to draw up a deal structure that would be acceptable to HMRC, while enabling the individuals involved to attain their desired outcomes. As part of this process, Old Mill helped with the critical tax clearance application to enable The Flavourworks to secure HMRC advanced clearance.

Project future With investment now secured, Old Mill, as the trusted advisers, moved on to helping The Flavourworks to adapt the financial model prepared for due diligence into a sophisticated forecasting model that will allow them to both budget for the next 12 months, and create a five-year plan for the future under the new leadership.

Chris Ormrod MD, The Flavourworks 01963 435270 info@theflavourworks.co.uk

To find out how we can help you and your business, please get in touch with our expert team.

Mark Neath

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Guest Spot: Going international - BIC Innovation

Going international BIC Innovation In our modern connected world, where we’re bombarded by content from all four corners of the globe, it remains surprising how few businesses develop their brands and products on the international stage.

Invariably, exports or international sales within a business are seen as a problem child – slightly hard work, needing time and attention, and rather daunting. So the response is often: ‘I’ll put that to one side with my ‘other accounts’.’ And as a result, Britain ranks below Greece in the proportion of small and medium sized enterprises (SMEs) exporting their goods and services.

Brand attractiveness:

On the positive side, Britain has a long tradition of trading and historical connections with many parts of the world.

International businesses like doing business with UK companies. We have a reputation of high standards of manufacturing, leading-edge innovation, first-to-market product development and stand-out design.

• Is my brand relevant to that market? Conduct market research • Where is there already a consumer need for my product?

• What are the barriers to entry? Competition, environment and regulatory requirements.

So how can you establish an international market for your brand or product? The cornerstone to building a rewarding international business base is to develop the right strategy.

Don’t expect to rule the world from the word go; having a clear, step-by-step plan for international sales is key to getting stakeholder engagement across the whole business.

Being clear about what you are looking to achieve, how you plan to achieve it and – most importantly – what that success will deliver, will help with the journey.

The word ‘export’ doesn’t really do justice to what you are looking to achieve. What you are really trying to do is market your brand to an international audience. So start with the basics, just as you would in your domestic market, and break the strategy down into manageable pieces.

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• Why is my brand unique?

• What are my brand’s strengths and its distinctiveness • Will my brand’s unique selling point (USP) translate to an international market?

Market attractiveness:

Operational review: • How do I want to service the market?

• Do we have the capability to manage the market direct?

• Should we adopt a distributor-based model and conduct distributor search and assessment?

• Pricing strategy – what do I need to invest to gain scale/brand awareness, and what will be the return on our investment?

Once you’ve identified the three or four key markets where you are looking to develop international sales, remain focused on getting to know these markets, their consumers, your partners or your customers. Spend time in the market – you can’t grow that market by staying put in the UK. If you are working with a distributor or partner, make sure they share your brand values and become part of your team. Get

Food & Drink Insight Edition 1, 2019

them to visit your business, introduce them to key people and share with them how the brand developed in your home market.

Choosing the right market to launch into is important.

Marketers refer to the ‘ethnocentric approach’; this means choosing a market where the people are a similar demographic to the market or home that the brand and product range have grown up in. Australia is often used as an example.

However, don’t be restricted by that. Sharing a language is one thing, sharing a palate is another. It’s often said that American products, such as confectionery, are not successful in the UK because the sweetness or flavours that appeal to American tastes are not as popular with UK consumers.

How would your product compare with the target market?

Packaging formats are often a key consideration too.

Consumers unconsciously associate some formats with certain products. You wouldn’t put a child’s soft drink in a pack associated with non-food products here, so a quick audit of suitable pack formats and the size for a given price point or shelf is just as important in export planning as it is in the UK.

“The cornerstone to building a rewarding international business base is to develop the right strategy.” a good understanding of the legislation and labelling requirements are all as important as the flavours, pack size and suitability for the target market.

Fortunately, there’s plenty of support to help you. BIC Innovation’s Food and Drink Export team has many years’ experience, and are on hand to help businesses in the South West take their first steps towards building international brands.

Michael Evans, Senior Food Export Associate, BIC Innovation www.bic-innovation.com

The list of considerations is seemingly endless, and the unknowns are even more complicated while Brexit remains unresolved. However, getting advice, feedback and ensuring

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Think Tank: Braving the change – making big business decisions

Braving the change – making big business decisions We can all happily carry on in business as we’ve always done – but where will that get us?

Although staying in your comfort zone is often the easy choice, it’s not necessarily the best option if you want to grow or improve profitability.

By pushing your product or service forward you can recoup some very satisfying rewards. Fancy an increase in profitability, market share and turnover? Well you can achieve it – but you’ll need to keep pace with your target markets as they grow and modernise, and the latest trends appear. So how do you make those brave, bold decisions that have the potential to significantly impact on your business?

Decisions to ‘brave the change’ are sometimes easier to talk about than to put into practice. But it doesn’t have to be daunting, and we are here to help you through the process. Rather than jumping from A to B as quickly as possible we suggest putting actions into small, easy-to-achieve steps.

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Identify and research

Impact

Your starting point is at ground level and involves taking notes. Observe what’s happening in your particular market. What others are doing might indicate an opportunity or a gap in the market that you could exploit. For instance, have you received feedback on your products that might suggest small improvements are necessary to attract more customers? Jotting down these ideas can help you to capture these thoughts.

Before you take the next steps you need to consider what else you have going on in your business. Is it the right time, and will it fit in with your other projects? These may seem like common sense deliberations, but unless you pause and take a step back from day-to-day operations, you could easily duplicate costs or take manpower away from another important project. Gut feel will often play a part in your decision making, but don’t necessarily be afraid of that – experience does count.

Consider and discuss When you have an idea, don’t just keep it to yourself – talk to others about it. Whether it’s your family, friends, employees, suppliers or customers, everyone has an opinion!

Seeking an opinion is also a great way to engage your staff and get their buy-in to the change.

Start small Once you’ve weighed up your options it’s time to give your new idea a go.

Start off with a small trial; if it doesn’t work, that’s okay. The most successful businesses have made mistakes along the way, and it takes perseverance to

Food & Drink Insight Edition 1, 2019

“The most successful businesses have made mistakes - it takes perseverance to see a great idea through.”

see a great idea through. Often it’s just the presentation or delivery of a good idea that fails, rather than the idea itself. Keeping the trial small will reduce the risk taken and hopefully not make you step backwards.

Monitor A vital step to appraising change is identifying the impact it has on your business. Set up key performance indicators (KPIs) so that you can easily monitor any changes. Depending on the scale, KPIs could be reviewed daily, weekly or monthly; make sure you compare like with like so you can spot the changes. Constant feedback from staff and customers can be taken throughout this process and will help to flag if the change has been beneficial. At this level you could also offer customers a percentage discount to try out a new product, so that if it isn’t such a great success, you are

minimising the possibility of losing customers.

Scale up If the trial results are good, feedback is positive, profitability is encouraging and turnover looks promising, then you can consider the next step. Now is the time to think about investment options or taking away resources from non-profitable areas of your business.

The key thing is that you’ve been able to identify that the change has the ability to make your business more successful.

Start all over again And so it continues. If you’ve abandoned an idea or new product along the journey, or turned your fledgling idea into a working project, it will soon be time to start again at the beginning with your initial steps

and consider new ideas. Constantly re-modelling your business, finetuning efficiencies and identifying the recipes that work best is the key to continued growth and success, all the while coping with external pressures and demands. It’s a never-ending challenge or opportunity, however you like to view it. Who knows where it could take you?

If you’re looking to progress your business, product or service offering, we can help to guide you through the process.

Lorraine Bolland

Legislation and Financial News: Beyond Xero

Beyond Xero – how Xero’s ecosystem can streamline processes and fuel growth for food and drink businesses Many of our clients have used HMRC’s Making Tax Digital initiative as a catalyst to transition towards Cloud accounting. This is partly in anticipation of further developments in digital reporting beyond VAT. As a Xero Platinum Partner, we are well placed to observe how things are evolving and to advise you on adapting to this fast-changing landscape.

There are now more than 700 apps that link to Xero’s application programming interface (API), and this amount of choice can be overwhelming. While it can be difficult to work out the best way to leverage this technology to save time or fuel growth, it can be well worth it. Xero says its data shows that small and medium sized enterprises (SMEs) using app-based technology grow revenues 30% faster*.

As well as driving growth, moving to Cloud accounting is about putting business owners in control. The bookkeeping function of the future will become much more than just data entry; it will be about interpreting data in real-time so that you can make more informed decisions about your business.

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Managing the cashflow rollercoaster

Making sense of your numbers

Many smaller food and drink businesses here in the South West are seasonal, often having to survive from cheque to cheque.

As business advisers we are well placed to help you interpret the data pulled from Xero into forecasting dashboards such as Futrli, so that you can continue to focus on building your business.

Within Xero’s ecosystem, challenger banks and fintechs have developed apps that set up bank feeds which automatically transfer bank transactions into the accounting system. This gives them real-time insights that enable them to provide funding and short-term cashflow solutions.

There are also apps that can be used to shorten payment terms, and other tools that can automate the processing of purchase invoices.

For instance, Receipt Bank enables you to scan cash receipts with your smartphone, automatically sending that information to the Cloud accounting system.

Stacey Morrison

*Xero 2016 UK small business market study

Food & Drink Insight Edition 1, 2019

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Guest Spot: Tuck into Cognique’s top 10 marketing trends for food and drink businesses

Tuck into Cognique’s top 10 marketing trends for food and drink businesses At Cognique we know that the marketing landscape is no piece of cake.

It’s busy, complex and continually changing – especially in the digital arena. Here’s our round up of the top 10 marketing trends affecting food and drink businesses.

1 Website speed

4 Vertical video

Following the roll-out of Google’s Speed Update, websites are now ranked in search engine results pages (SERPs) on their mobile site speed. Businesses should review the build and content of their website, as well as their hosting services, to maintain and improve speed.

Appetite for video content just keeps growing, but consumers are becoming increasingly resistant to having to physically turn their devices. The days of 16:9 ratio may be numbered as the vertical video is on the rise; 90% of videos watched vertically have a higher completion rate compared to videos watched horizontally – they also drive six times the level of engagement.

2 Voice search The massive increase in the use of Alexa and Google Assistant means that users are changing the way they search for information. Voice searches are typically longer and use conversational language, which will have a potentially huge impact on Search Engine Optimisation (SEO) strategies.

3 Social stories There are 200 million monthly Instagram users watching social ‘stories’, making them a serious ingredient in the marketing mix. Stories can help users to discover new accounts and give them unique, behind the scenes insights into a business and its products. FOMO (fear of missing out) is real.

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5 Influencers Love them or hate them, influencers aren’t going anywhere for the time being. Micro-influencers in particular are creating a stir. With their often niche sectors and highly engaged followers, they offer mouth-watering potential to food and drink marketing campaigns.

6 Automation With so many marketing channels to manage and nurture, automation could be the key to content consistency and distribution. However, automation should never replace real engagement with customers hungry for conversations with real people.

Food & Drink Insight Edition 1, 2019

7 SERP SEO

10 Environmental impact

Since Google introduced Featured Snippets at the top of SERPs, there’s been a rise in the number of unclicked search queries. So although Featured Snippets can be great for promoting brand recognition, driving traffic to your website may no longer be as straightforward.

Single use plastic and plastic waste is BIG news. Packaging has a hugely influential and functional relationship with food and drink products, and any changes to the materials used can be complicated. Clearly communicating and promoting a long-term environmental strategy is important to strengthen consumer trust and buying confidence.

8 Privacy GDPR whipped up unrest among consumers concerned about who has their data and what they are doing with it. Build consumer confidence and reassure customers by ensuring business privacy policies are clear and transparent.

9 LinkedIn With 260 million active monthly users, LinkedIn is the go-to ‘professional’ social network. Creating a LinkedIn strategy centred on engagement, instead of a ‘sell, sell, sell’ approach, could see food and drink businesses harness the power of this unique networking tool.

Nigel Reece Managing Director, Cognique www.cognique.co.uk nigel@cognique.co.uk 01749 678721

Cognique is a website, design and digital marketing agency that specialises in helping businesses and enterprises with an appetite for growth. We also combine mouth-watering creativity and fresh, targeted marketing, to help food and drink businesses thrive.

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Guest Spot: West Country Food Adventures

“From hands-on workshops to tours, tastings, festivals and pop-up meals – it was all going on!”

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Food & Drink Insight Edition 1, 2019

West Country Food Adventures For three years we have been working closely with Bev and Sarah Milner-Simonds, creators of the multi-award winning eat:Festivals.

You may have heard of their increasingly popular festivals which continue to pop up around the West Country. Free to attend, these festivals celebrate and support local food and drink businesses in towns across the region, and we have been delighted to see such an exciting initiative flourish.

The West Country is renowned for the quality and diversity of its food and drink sector, and the whole ethos of eat:Festivals is about showcasing the finest locally made and sourced produce in an urban environment – a winning formula with thousands attending across Somerset.

In July 2019 we were excited to see the launch of the all-new West Country Food Adventures. Building on a 2018 pilot by Wells Sustainable Network, this expanded two-week initiative encouraged people to get out into the countryside, to experience and discover a little bit more about how these delicious, locally sourced, locally produced products are made across Somerset.

Bev explained: ‘We were really pleased to get so many people out exploring, tasting and experiencing different food and drink festivals across the county. From hands-on workshops to tours, tastings, festivals and pop-up meals – it was all going on! Now we want to work with more farmers, makers and venues in 2020 to showcase the fantastic variety that we have in Somerset.’

West Country Food Adventures are an invitation to get to the root of what the land is for. It’s a chance to ask questions, taste test or get more hands on and involved in the making of products. This is also a fantastic opportunity for people to

delve further into the landscape, exploring this beautiful part of the world that’s right on our doorstep.

The South West is at the forefront of the UK’s thriving food and drink sector, with many local success stories to shout about. Old Mill food and drink expert, Phil Mills said: ‘What better way to bang the drum about the quality of your product, its taste, its unique flavour and its provenance, than by encouraging consumers to get out into the countryside and go on a tour, attend a masterclass or enjoy a tasting!’

“This is a ground-breaking way to connect people with where their food comes from, and how it’s made.”

If you would like to find out more about eat: Festivals and how you can get involved, email Bev and Sarah at hello@eatfestivals.org or see what they got up to at www.westcountryfoodadventures.org.

Phil Mills

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News: The team behind the numbers

The team behind the numbers Behind the scenes here at Old Mill, we like to indulge in the delicious concoction of numbers, problem solving and seeing our food and drink clients achieve success.

To make this happen we have a number of dedicated food and drink specialists working hard on behalf of clients.

So now we want to introduce you to an important member of the team – enter, Lorraine Bolland, accountant and lover of all things food and drink…

Tell us a bit about yourself I joined Old Mill in 2006 and have a broad practice background, always getting stuck into the tax as well as the accounts and audits. In my early career I had a great deal of involvement with hotel clients, food wholesalers, charities and property companies. My 13 years at Old Mill has given me more involvement with farmers, food producers and retailers, which has completed the all-round food service offering.

What is your favourite part of the job?

Getting to know a business is exciting and I get a real buzz from it. This

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then moves on to picking through the detail and building the foundations to support advice. I really love to get to know a client well and can put myself in their shoes, spotting opportunities which might be of interest to them.

It’s so rewarding when you see the business evolve, meet its objectives and thrive.

What’s the biggest misconception surrounding accounting?

Today, with mainly computerised records and highly efficient accounting software, there’s a mistaken belief that we just plug some figures into the system, and it calculates everything for us with very little effort. But there’s so much more to it than that; it’s about seeing past the numbers, and having that human touch to identify ways to improve a business. That could be through helping with Research and Development costs, supporting clients with Capital Allowance claims, or a whole host of other activity. The key point is that as accountants, we don’t

just push numbers, we add value.

What is it about the food and drink industry that you love?

Food and drink can be so creative and emotive. I like to believe that I spot opportunities for food and drink businesses by being creative and thinking outside of the normal accountancy box, which then helps them to become more successful and achieve their objectives.

Where do you see the food and drink industry heading?

We are seeing the benefit of businesses talking to their competitors rather than keeping their doors firmly shut. There is a huge amount of opportunity for everyone and it’s difficult for every business to be masters of all aspects, whether that be operations and logistics or connections in the retail space. We are finding that there’s a lot of interest in powerful business combinations, and these should help businesses to

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“Getting to know a business is exciting and you get a real buzz from it.” take advantage of opportunities in challenging times.

How has accounting changed in the last few years?

As a business we are actively working to become a paperless office. To help this shift, working remotely is far easier and we are taking advantage of the new technology available. With so much going digital, we have just gone through one of the largest overhauls of accounting standards in my career, which has meant a big change for us as well as our clients.

be an owner of my own business that makes and sells something tangible. It would be great to feel a sense of pride in a product that you can actually touch and feel; it would give me a great sense of accomplishment, and hopefully be enjoyed by customers.

Perhaps I’ll spot a gap in the market, create a fantastic brand, submit a really big Research and Development claim, pass the business on to my children and relax into an early retirement, leaving Old Mill to manage my wealth!

Lorraine works with a variety of food and drink businesses across the South West. So, if you’re looking to start your own business, claim Research and Development tax credits, or perhaps want support and advice with funding applications, contact Lorraine for an initial discussion.

Lorraine Bolland

If you weren’t working in accounting what would you be doing?

Having been in the service industry for 24 years now, I think I would have to

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Case Study: Helping Woodbridge Farm and Dorset Blue Vinny build a future-proof business

Helping Woodbridge Farm and Dorset Blue Vinny build a future-proof business Having a specialist food and drink team and the pleasure of working for many talented businesses in the industry, we were delighted when the opportunity came up to showcase one of our long-term clients, Dorset Blue Vinny.

As a family owned cheese maker located at Woodbridge Farm near Sturminster Newton, Dorset Blue Vinny was revived back to life by Mike and Christine Davies in the 1980s using a 300-year-old recipe.

Rich in its history, this cheese was once made in nearly every farmhouse in Dorset, until the Second World War when production died out entirely.

Dorset Blue Vinny is a traditional blue cheese made from skimmed cows’ milk. ‘Vinny’ is derived from a local Dorset term related to the obsolete word, ‘vinew’, which means blue vein.

The farm is now run on a day-today basis by Mike and Christine’s son Richard, while their daughter, Emily, manages the cheese business and The Dorset Blue Soup Co. With the support of their parents, Richard and Emily are determined to carry on the farm and the Dorset Blue Vinny legacy for generations to come.

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Kick-starting the diversification trend Diversification has been a hot topic for several years in the farming industry, and Mike and his family actively embraced this idea early on. With Woodbridge Farm, home to over 270 Holstein Friesian cows, they can continuously produce milk to make their Dorset Blue Vinny.

The Davies family have worked hard for over 40 years to keep up with consumer demand and stay ahead of the game. They have a variety of products – from cheeses to chutneys – to satisfy the taste buds of their customers, and have recently opened a ‘pop up shop’ on their farm to enhance the customer experience, showcasing their locally sourced products. Their customers can purchase a delicious Dorset Blue Vinny offcut on the grounds of the farm, while the cows that supply the milk for the cheese ‘moo’ away in the

background. They have managed to create a genuinely authentic customer experience.

The business has also made a point of collaborating with a range of other local artisan food and drink businesses. Chococco have included Dorset Blue Vinny in their Christmas range of fabulous chocolates. Purbeck Ice Cream created the first Dorset Blue Vinny ice cream. Holebrooks Deli & Butchers produce Dorset Blue Vinny sausages. Oxfords Bakery make an amazing Dorset Blue Vinny loaf as well as cheese twists. Hotch Potch Savoury Pies use Dorset Blue Vinny in a range of gluten free pies, and The Real Cure has developed a delicious Dorset Blue Vinny and fig salami.

Embracing opportunity Reaching these successful heights has taken several decades, but it’s an inspiring achievement. Initially, the main challenge was building

Food & Drink Insight Edition 1, 2019

“Reaching these successful heights has taken several decades, but it’s an inspiring achievement.”

up the brand, and over the years the Davies family have proved to be very resourceful by working with some fantastic ambassadors. Mike was one of Rick Stein’s original Food Heroes, as well as working closely with Hugh Fearnley-Whittingstall and the River Cottage team to create some fantastic soup flavours. Associations like these helped enormously to get Dorset Blue Vinny on the map.

Emily explained: ‘Distribution can also be a challenge in terms of getting your product listed with wholesalers; for instance, we have just landed a really exciting distribution deal that’s been three years in the making!’

As well as being cheese makers, they manage a working farm that supplies milk to other producers, so there are different cost centres that need to be carefully monitored. Having diversified the farm business, the need soon became apparent to bring together both the farm and the cheese making

businesses, ensuring they both run side by side in a more streamlined way.

‘Working closely with the team here at Old Mill, we identified that Xero’s cloud-based solution was the way forward,’ added Richard.

‘As a family business you tend to find yourself wearing a lot of hats, so it’s essential to have an adviser like Phil Mills who knows our industry and is a good sounding board. The move onto Xero was a massive transition for us as there’s a lot of paperwork generated because of the cheese sales, and we needed to set up all the cost centres and systems. We can now pull the right information on a monthly basis to provide us with much better insights to be able to run the business.’

If you would like to find out how we can help you achieve your financial and business aspirations, please contact Phil Mills.

www.dorsetblue.com

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News: Announcing Old Mill’s Food and Drink Business Advisory Programme

Announcing Old Mill’s Food and Drink Business Advisory Programme While the West Country has a vibrant food and drink sector with some stunning success stories, it’s a well-known fact that small business failure rates can be depressingly high – especially in those critical first five years.

Research shows that many embryonic businesses fail to get traction because they struggle to compete in three key areas: funding, cashflow and distribution.

managed business to realise its ambitions by taking that risk and growing a sustainable, profitable enterprise that can be genuinely life changing.

With Brexit and the political situation continuing to add further uncertainty, it’s not getting any easier for businesses to gain a foothold. This has prompted us to consider what more we can do to try to assist businesses facing these challenges.

We are committed to the food and drink sector across the South West, and we wanted to be able to put something back into the industry in a demonstrable way, that could help small businesses at different stages along the business life cycle.

When you look at the typical life cycle of a business, the start-up phase can be particularly tricky, as businesses at this point are focused on generating momentum but are often short of cash and typically cannot afford to pay for advice at the point where, arguably, they most need it.

So how could we best achieve this?

We’re not talking here about preparing a set of year-end accounts; it’s more about what we at Old Mill would describe as ‘business advisory’, i.e. the kind of practical insights that make a real difference.

We genuinely want to see our clients succeed – there’s nothing more satisfying than helping an owner-

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The challenge is that businesses have different needs at various stages of their growth trajectory. For startups it’s all about getting traction, while a more mature business may have plateaued but is ambitious to break through to the next level.

Other businesses may be looking at expansion, and then there’s the tipping point when a business owner needs to start thinking about their exit.

It soon became clear to us that a ‘one-size-fits-all’ approach wouldn’t work and, during exploratory

discussions with our key partners across the region’s food and drink industry, what emerged was the opportunity to develop an exciting new programme that we believe will resonate with business leaders at all of the different stages of their journey.

We are delighted to announce that, as part of our lead sponsorship with Taste of the West, we will offer a free financial mentoring support package to members – the Old Mill Food and Drink Business Advisory Programme.

This programme is aligned to food and drink businesses across the entire supply chain, and is designed to tackle the issues that affect you along your journey in a way that will make a real difference.

The programme will consist of different types of events, depending on your specific needs. But, just to be absolutely clear, these sessions are not thinly veiled ‘sales pitches’ that will leave attendees feeling disappointed – our promise is to deliver actionable content and access to our expert team who are passionate about the food and drink industry.

Food & Drink Insight Edition 1, 2019

“We wanted to put something back into the industry in a demonstrable way.”

Starting this autumn we will run a series of workshops targeted specifically at start-ups that will cover practical business finance.

These sessions are designed to help business owners get to grips with the fundamentals and will feature topics like:

Breakthrough discussions

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Forecasting and budgeting: planning for the future

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Optimising your business structure (including remuneration planning)

So for more established businesses we will be running a series of roundtablestyle sessions, where business leaders can engage with like-minded individuals in a supported, peer-topeer environment designed to provide breakthroughs and insights to help you achieve your goals. The feedback we get from these discussions is phenomenal, and we will be running invitation-only roundtables in our offices in November and February.

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Analysing your business: putting profit first

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Cash is king: the importance of cash-flow management and strategies for improving liquidity

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Preparing for exit

While some food and drink firms are essentially established as lifestyle businesses, many others have growth ambitions to scale; however, this is notoriously difficult with just 4% ever reaching £1 million turnover.

Taste of the West’s CEO, John Sheaves said: ‘For some time now our members have been asking whether we could put something together that addresses the real-life, practical challenges facing food and drink businesses. Taste of the West is delighted to work with our partner, Old Mill, in putting together a programme that we believe will add real value to our members.’

To register your interest in Old Mill’s Food and Drink Business Advisory Programme, please contact us on 01935 709330 or email marketing@om.uk

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Think Tank: Slicing your margins without eating away at your customers’ happiness

Slicing your margins without eating away at your customers’ happiness While people rarely complain about getting too much food, they certainly notice if you give them less! If you want to keep your margins high, you will need to carefully control the amount of food served to each customer.

We’ve all witnessed the effects of management increasing prices as well as reducing portion sizes. It can rapidly cause the reputation and the overall quality of a restaurant to fall.

But get pricing and portion control right, and you will quickly see the return on investment as your business excels. So what’s the solution?

Pricing your menu items When you determine the menu cost of your food, as well as the food cost for a certain meal you need to add the relevant percentage of other business expenses – such as energy costs, rent and salaries. It’s important to calculate your profit for each menu item per plate, so that you know the dishes you are making more money on. Take special care when pricing any best-selling menu items as it can be easy to outprice yourself and reduce the demand. Sometimes, accepting that customers are going to eat the low-end items on the menu can work for you. If the restaurant is busy, then your fixed costs are spread thinner, meaning your cost per diner drops as volume increases.

height of their season ensures they are bought for the best price. You could always keep your main meal the same and only change the side dish. This could entice customers with the use of local, seasonal vegetables or salads while lowering your food costs and keeping the same menu price.

Controlling wastage This is a key factor in keeping food costs down. If £10 of food is wasted each day, it can add up to £70 a week or £3,640 a year. But this is a great opportunity to be creative.

Think about using every part of an ingredient in different ways.

Buying tips Portion control is closely connected with the purchasing of food. A comprehensive knowledge of the food is required to work out exactly how many portions can be obtained from it. Buying tips to consider when buying food that will assist portion control include: •

Keep an up-to-date list of all fresh and dry goods required by the kitchen and their prices.

Check the prices regularly to guarantee you buy at the best price.

•

Be aware of different types and qualities of each item – it could be better to buy products by size and weight to ensure consistency.

Change menu items, not menu prices Trying out seasonal menu changes can help reduce the costs related to fluctuations in price, a particularly prevalent issue in seasonal fruits and vegetables. Ordering the goods at the

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Be aware of the availability of part-prepared and readyprepared fresh items, such as filleted fish. They may be more expensive, but you will save on labour costs, wastage and ensure better portion sizes.

The quality of the food Better quality food usually yields a greater number of portions than poor quality food. The time and labour involved in preparing the lower quality food also loses money – for example, low quality meat may require more trimming. Depending on your target customer base, consider the use of organic produce. Some people would rather pay £12 for an organic chicken breast salad than for a half a roast chicken, chips and salad. However, an organic chicken breast can cost the same as a whole standard chicken, so it’s essential you know your target market.

Prosperity doesn’t come from extreme cost cutting and punishing pricing. It comes from delivering an exceptional experience to the hungry public. Managing your expenses in a responsible fashion is important, but everyone is always willing to pay a bit more for extraordinary.

Lucy Bennett

Food & Drink Insight Edition 1, 2019

“Prosperity comes from delivering an exceptional experience to the hungry public.�

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Think Tank: Plan for the future by making a company will

Plan for the future by making a company will Most of us know that it’s vitally important to put in place a will to ensure that our assets are distributed to our heirs on our death, in accordance with our wishes.

But as a business owner, have you considered what would happen to your business if you or one of your key colleagues was to pass away suddenly?

A critical part of your planning and decision making should be centred around managing risk for the future, which includes thinking about what should happen to your business interests following your death, or the death of someone else who is crucial to the business. Putting a company will in place is a fundamental pillar for a sustainable business.

What is a company will?

There are two main elements to putting the right financial protection in place for your business. The first is the company will, which is key person insurance (also commonly known as keyman insurance), and is essentially a life insurance policy taken out by a business to insure its most valuable employees.

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The policy is designed to protect the company from the financial impact of losing essential people through death or illness. It’s about managing risk and addressing the ‘what if’ factor that none of us wants to contemplate.

As a business expands it’s often the case that one or two members of staff become almost indispensable in terms of their ‘know how’ or specialist expertise. These people can be difficult to replace, so key person insurance can provide the business with a cash injection at a critical time to help manage the disruption, or assist with recruiting a replacement.

Shareholder protection The other element is shareholder protection, which is used as a planning tool to ensure that the right money ends up in the right hands at the right time.

Typically we would work in parallel with the lawyers putting together the shareholder agreement, to ensure that

Food & Drink Insight Edition 1, 2019

the remaining directors can carry on with the business, while putting money (the policy proceeds) into the hands of the deceased’s family. This solution often works for both parties, as the family may not want to carry on their involvement with the business, or lack the relevant experience.

In the food and drink sector a lot of start-ups begin with two or three friends, colleagues or family members setting up their venture together, and then trying to get established. Longterm planning is often the last thing on their minds; but if a key person dies unexpectedly it can be catastrophic, particularly in those early years. An insurance policy can provide peace of mind so that, if the worst does happen, the business has a chance of survival.

This kind of planning often gets put on the backburner, and in many cases business owners don’t tend to talk about this stuff very often.

Unfortunately, if they do put something in place, they often fail to review it,

“Putting a company will in place is a fundamental pillar for a sustainable business.” which means that as the business expands, the levels of protection are inadequate and haven’t kept pace with the growth.

document were no longer relevant, as they have left the business and new key staff have joined, so reviews are an essential part of the process.

At Old Mill we regularly review the policy in place and the amount of cover, to ensure both are still fit for purpose. As business advisers our job is to check:

If a key individual dies suddenly, having a company will in place can make a huge difference and the business doesn’t have to fail as a result. Life assurance can provide business owners with certainty and peace of mind, but policies need to be properly planned and reviewed regularly to ensure they reflect the continuing needs of the business.

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When the policy was last updated?

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Whether it reflects your current wishes?

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Have there been any changes?

We’ve previously come across scenarios where the names of the people referred to in a shareholder

David Rice

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News: New brand for Old Mill

New brand for Old Mill You may have noticed that Old Mill has rebranded, and you may be wondering why we chose to do this now.

It’s a tradition at Old Mill to always be at the forefront of what we do, whether it’s the knowledge of our people, our specialist expertise across accountancy, tax and financial planning, or investment in technology to future proof both ourselves and our clients.

The new brand embraces our ambition to support the wide variety of people we work with, through a combination of expert advice and the highest quality client support.

Our brand represents the future; we will keep one eye on technology and the other on the evolving needs and aspirations of owner-managed businesses. Running a business – particularly in the food and drink sector – is increasingly complex, so understanding the fundamentals around strategy, planning and managing cashflow is more important than ever.

Our aim is to truly understand you and your business, help you to negotiate through the red tape of finance, and give you peace of mind so that you can do what you enjoy most – running a successful business and providing for your family.

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It’s important to remember that, while our brand may have changed, our values haven’t. Our people, our quality of service, the personal relationships we have built and our enthusiasm for helping you navigate your finances remain the same. As financial professionals, we have always provided something different, specialist and niche to our clients.

We have not changed, but we have evolved, and our new brand represents this, with its underlying ethos all about ‘making your tomorrow start today’.

Many of you will have spotted the new Old Mill brand at food and drink events across the region over the summer; the feedback we have received has been extremely positive, but we always love to hear the views and comments of our clients, so please let us know what you think.

Kim Barnard Rebrand by Hide the Shark

Food & Drink Insight Edition 1, 2019

“The underlying ethos of our new brand is all about making your tomorrow start today.�

Contact Exeter Leeward House Fitzroy Road Exeter Business Park EX1 3LJ +44 (0)1392 214635 Melksham Wessex House Challeymead Business Park Bradford Road SN12 8BU +44 (0)1225 701210 Wells Bishopbrook House Cathedral Avenue BA5 1FD +44 (0)1749 343366 Yeovil Maltravers House Petters Way BA20 1SH +44 (0)1935 426181

The content of this newsletter is for general information only. It should not be relied on and action which could affect your business should not be taken

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without appropriate professional advice. Please contact your usual Old Mill contact or local Old Mill office.