This column first appeared on Jim Prevor's perishablepundit.com:
We’ve been fortunate to have Tony Reynolds on stage at The New York Produce Show and Conference:
An Industry Transformed: At The New York Produce Show And Conference, Global Trade Symposium Speaker Tony Reynolds To Illuminate The Rapid Growth Of Unrecognized Opportunities For The Produce Trade In The UK Foodservice Sector
He has also served on our Thought Leader panels at both The London Produce Show and Conference and The New York Produce Show and Conference:
British And International ‘Thought Leaders’ Panel Announced For The London Produce Show And Conference
Industry Leaders To Share Knowledge And Ideas At New York Produce Show Thought-Leadership Panel Keynote Breakfast
Every year, Reynolds has organized and sponsored an incredible tour showcasing the produce scene at London restaurants:
Reynolds plans top-of-the-line Foodservice Tour for The London Produce Show
So we’ve engaged with Reynolds for a long time. But, like most of the industry, the company has never experienced times like these. We asked Pundit Investigator and Special Projects Editor Mira Slott to speak with Tony and update us on the situation in the UK.
Waltham Cross, Herts, UK
Q: Could you start by contextualizing your business framework to fully grasp what you’ve been experiencing since the coronavirus outbreak, and what’s been happening in the UK?
A: For us, the official day of the lockdown, which affected most of our customers, was the 20th of March. So, as of the 20th of March, I had a £250 million business, I had 14 depots around the UK. We were employing 1,300 people. We made around 3,500 deliveries a day with a fleet of 300 lorries (trucks).
Our customers were typically hotels, restaurants, airlines, and special events. We’re just coming into the UK events season. So, there would be the Chelsea Flower Show, the Wimbledon tennis tournament, the Royal Ascot horse racing event... These are all big customers of ours that we supply every year. So, from the 20th of March on through the end of July is a really, really busy time for us, because it’s not just our existing work, but all the other things we do that are very special each calendar year.
Q: Oh, my. Your business livelihood involves every place that’s shutting down...
A: Yes. That was 95 percent of our customers, who were forced to close their doors. It’s terribly sad. But you can imagine the knock-on effect for us was we had quite a lot of empty areas of our business.
Q: How have you been coping?
A: Since then, we’ve worked really hard to use the Government schemes to follow as many stars as possible. There’s a special amount you can pay employees. You can pay 80 percent of your staff up to 95 percent of their salary, a maximum of £2,500 per month. So, we were very fortunate.
We had a lot of staff that benefited from that. Most importantly, we made sure they could isolate and be with their families, and not stand the chance of getting infected with the virus. Do you have something similar to that in New York, and the U.S.?
Q: State and Federal responses are different, and Federal financial stimulus/relief packages are coming in stages... it’s a complicated, and controversial process, for sure. But the U.S. foodservice side of the business has been hit hardest, with a rippling effect through the supply chain, similar in many ways to what you describe in the UK.
A: The long and short of that was we had a supply chain that was very sophisticated, bringing in product not just from the UK but from around the world, and that just shut down overnight. We already had avocados on their way from Peru, bananas on their way from the Dominican Republic, lemons from Spain, lettuce from Italy... you just go around the whole world and there was product on the way to us from that point.
We’ve had to work enormously hard to divert that product to other areas wherever we could.
The strategy we’ve taken, since the 20th of March — we just had the four-week anniversary — so in that period, we’ve really been able to stabilize the business, work out what we needed to do with people and infrastructure, and we’re very much there now.
And the great thing is, we’re still open, we’re still operating a business that has got flexibility to do incredible things, and it’s all safe. We’ve made a lot of effort to ensure the standards are there, etc.
Q: Could you talk more about your strategies to stabilize the business, and ways you’ve capitalized on your flexibility?
A: We used the government job scheme that was a very important part of our initial strategy. We have basically calmed the overhead massively. Where we had 14 depots around the UK, we closed one in Manchester last week, so we’ve managed to take probably half our depots and cut their usage for the moment because we just don’t have the volume going through.
We’ve taken a lot of trucks off the road, and we’ve done lots of things to stop cash going out the door. Really just suspending payments to landlords done through the legal process — nothing illicit. We’ve used every possible avenue, everything has been micro-managed so we can conserve cash, and we’ve got the right platform to restart this business, which in a lot of ways, will be a lot harder than it was to reduce it down, because of all the instruction of the UK government to close all hotels, restaurants, bars, pubs you name it.
But we’re stable. For us, that’s an important part now. The thing now is for us to plan for the future. And we’re planning harder than we’ve ever done to find work in the meantime.
Q: In the U.S., companies heavily invested in the foodservice industry have been forced to reinvent themselves for survival...[Baldor, Babe Farms, Markon, Fresh Origins, Weis-Buy Farms].
A: We’ve started these home deliveries schemes, delivering to consumers because the UK retailers have struggled to meet the demands of delivering products to people’s homes.
Q: That’s interesting... is it a supermarket logistics issue with the barrage of new home delivery orders?
A: Their systems haven’t been capable of fulfilling the influx of online orders and delivery requests from those consumers who don’t go out because of fear of catching the coronavirus. They basically want to buy as much product online as possible and have it delivered to their front door. The demand has been so great that the traditional channels of doing that haven’t been very successful.
So, companies like Reynolds have been able to launch home delivery schemes to local areas and local neighborhoods, and that’s been going really, really well. So, we’ve been doing that to complement some of the other business we currently do, which is still to hospitals, care homes… and some schools have stayed open because they are for critical workers’ children, when the doctors and nurses have to go to the hospital. Their children are able to go to a school and be looked after because they’ve got no one else to keep them at home with. So, we’ve been working out that.
So, the only new thing that really has come out of this has been our own home delivery service that’s been very successful. We’re proud of that. And the nice thing is that it is something we will continue to do when we come out of this. It’s definitely got mileage to do that.
Q: That’s exciting. Did you do any home delivery before or was this a whole new venture?
A: No. This was entirely new for us. Literally, we created this home delivery service in 24 hours.
Q: It sounds like a similar story to what Baldor did here, starting in New York City, and gradually expanding its reach from there...
A: Yes, same thing. We built this website called Reynolds At Home. Basically, the consumer can go on the website and order these different boxes. They’re all pre-done. We’ve got one called the refrigerator, which has all your basic dairy components — milk, cheese, butter — and we have a fruit box and veg box.
We’ve now done a pizza box, so we’ve got our own pizza catalogue of bases and sauces and fresh ingredients. We’ve got a burger box, and a barbeque box we do for our meat company; with the weather in the UK improving, people are doing more barbeques. So, we’ve done that really well and really quickly, and that’s been great — a real benefit from other ways that have been a complete disaster.
Q: Essentially, you came up with a new business for your company. I see your vegetable boxes and fruit boxes are filled with an impressive range of different items.
[On the website, it says a typical family veg box for £15.99 contains a selection of produce from potatoes, cabbage, onions, mushrooms, cucumber, tomatoes, carrots, parsnips, lettuce, kohlrabi, broccoli, peppers, butternut squash, chilies, sweet potato, radishes, Jerusalem artichokes, aubergine, asparagus, beans, mango tout, sugar snaps and corn.
Vegetable Box £9.99 to £15.99
Understandably, there is a qualifier: “Whilst we endeavor to provide a selection of vegetables in line with the description, the dynamic availability of produce may mean that we need to substitute.” The typical family fruit box for £19.99 is just as bountiful: a selection from melon, mango, lemons, grapefruit, figs, apples, oranges, easy peelers, pears, limes, pineapple, pomegranate, coconuts, avocado, plums, papaya, berries, bananas, kiwi and grapes.]
Fruit Box £12.99 to £19.99
I wish you delivered to my neighborhood! How does it work with logistics to get product to people’s homes? Is it complicated? Have you received good consumer feedback?
A: It works really well. We’ve hand-selected a team of drivers. They’ve all been picked because they’ve got good personalities. We’ve been getting some fantastic feedback on social media, Twitter, Facebook, and Instagram, on how nice our product is, how good it is, how nice our staff are.
You need these little things to keep reminding you it’s worth it. That’s been a great benefit, just helping people out, who are at home and scared, but also to our own team to show that we’re doing some good things, and people are enjoying. For us, it’s not been easy, but it’s a good thing to do, and we already have the assets, our warehouse, and our drivers and our trucks.
Q: While you launched the program in 24 hours, it sounds like you rolled out the program smartly. I suppose there wasn’t much of a window for piloting...
A: We’ve done it in a disciplined way and controlled the cost, so it hasn’t gotten out of control. We opened it up on a week-to-week basis to different regions, different areas. We tried to control it, just to make sure we get it vetted in properly. So, it’s sustainable, and it’s scalable and something we can build on. That’s the most important because it’s something we want to continue doing, once we get this coronavirus sorted out.
Our retailers have struggled. They got hit with so much demand, not just at the local stores, but the ones doing home deliveries. They couldn’t cope with it. They would tell people we can’t take your online delivery order now. A lot of people got really scared that they couldn’t get a delivery.
Some of the others said, “Look we’re doing this, but it’s not making us any money, so it’s not something we’re really going to invest it.”
They haven’t been able to do a good job of it either. That opened opportunity for companies like us to take advantage of that.
Q: For perspective, what was the situation with home delivery in the UK before COVID-19?
A: Some of our retailers like Tesco have been doing home delivery long before coronavirus. That’s probably the largest operator. And then you’ve got specialist companies, like Ocado, that have been doing it awhile with quite different systems. They have the robotics that take the orders, and then they deliver it, but they’ve all struggled to meet the demands. It’s been quite interesting to watch it all play out.
Q: In the U.S., foodservice suppliers and distributors have formed new collaborations with retailers, since they’ve been designated as essential businesses and allowed to stay open. I’m not sure how the UK system works in that regard... Have you found opportunities there?
A: We’re not seeing that type of collaboration here. Our retail supply chains are very sophisticated as are foodservice supply chains. There are some problems there, particularly for UK crops for the moment, because there are not enough workers to cut asparagus, or pick strawberries, or cut the lettuce. We’re just going into our UK season, and that’s going to be a problem because there isn’t the workforce there to help.
We’re also experiencing problems getting products from other parts of Europe that traditionally come from trucks. The costs of getting produce to the UK has gone up three-fold. The drivers are not wanting to take the risk of leaving their families and getting stranded somewhere else in Europe and the added difficulties of getting through the route.
The retail supply chain is one that operates very much like before the lockdown. So, for us the challenge is with a lot of our growers. They say, Tony, what do you need me to grow, and I say, I don’t know. I haven’t got an answer to that. It’s a bit chicken-and-egg. I can’t tell you what to grow for me because I don’t know what customers I’ve got.
The other problem is getting money out of our customers. Some of our customers are just not paying us. They haven’t got any money. Some just don’t have any cash. In some situations, those businesses could go bust, and I could take a knock for that.
Luckily, we have a thing here called credit insurance, so basically when customers don’t pay me and go out of business, I’ve got that covered through insurance, most of it anyway.
Q: Well, that’s a bit of a help, at least in the short term ...
A: Yeah, but that costs me a lot of money. There’s a big premium. But that credit insurance probably won’t even be around anymore, as it was after this because I don’t think anyone can take the risk on the credit that was originally in the restaurant or the eating-out supply chain.
So, that’s another thing at the moment — getting money out of our customers. A lot of our customers have been fantastic and have paid their bills, and that’s great, but there are some that have refused to pay.
It will be interesting to see how some of these businesses we’ve supplied for years and years will be able to survive. That’s another big uncertainty for us.
I suppose the main thing for us now is, how do we grow the business, once we get the chance to start supplying some more customers. And a lot of that depends on when the UK government allows restrictions to lift.
From the latest media updates, it seems like when people are allowed to go back out into their normal world, that won’t happen overnight. I think the first thing they’ll do is open up some schools, and they’ll open up some businesses that have been closed. Unfortunately for us, it seems like restaurants, bars and pubs and places of mass gatherings like in stadiums… that’s not going to be the first thing. It sounds like it will be one of the last things to open.
This is all hypothetical, but if at a certain point, the government will start to relax some of these restrictions and allow people to go to their local shop or garden center, or kids can go back to school, how long after that are we going to be allowed go to your local restaurant?
That could be another four weeks, another two months or more, we don’t know, so the uncertainty is a problem. But that doesn’t stop you from planning for the different scenarios.
If I’m honest, that’s what gets me out of bed now. What’s done is done. But I’m always looking at the front end for the opportunities. I’m looking at how our company can become better. Before coronavirus it wasn’t doing too bad, but I want it to become better.
We have to take something away from this now. We’ve got to be able to look back at this in three years’ time, in five years’ time, and say, you know what, that was a really tough time. Your world was falling apart around you, your business world, but God bless, our loved ones are still with us, and we did everything right in as much as protecting our workforce.
And when we got the chance to get going again, we did it better than ever, we learned during that time to really study the good things and the bad things about our business. That’s where I am and certainly the senior team. We’re getting out there each day and we’re thinking, “What can we do now while we’ve got the chance?”
It might be simple things like just looking at the flow of the warehouse every day. We’re a 24-hour business, so we never really get the chance to get a fresh look at the business. Now we do. Hey, if we do this, or we invest in this... we’re doing a lot of work with our programmers and developers, with our systems staff, it’s pretty much been given a detox. We’re clearing a lot of data, and things we hadn’t had time to do before.
Of course, you look at the sales book every day, and that will just upset you, but when sales come back, you’ll be in a better position because of the things you’re doing now. And that is what excites me at the moment. We’re all in the same boat; it’s a really, really difficult time for anybody and any business. But it’s the companies preparing for the future and getting out in front of this… those are the ones that will be able to gain and be successful again. And that’s very much what we want Reynolds to be doing.
Q: There’s much discussion in the U.S. about how the coronavirus may forever change consumer behavior, and what will be considered the new “normal.” Do you think this could apply to how consumers shop for groceries?
A: I know from my own mom and dad… they’re both in their 80’s, both are ok, but they haven’t gone out of the house for six weeks. They’ve had time to get on the computer and iPad now, and they’re actually confident going online and using the online shop. Whereas before this, they would have driven to their local supermarket. Now they’re thinking this is much easier, I don’t have to worry about finding a car park, I don’t have to que up.
This will change people’s shopping habits; this will change a lot of things in society. We’ll never go back to what we were in the UK prior to 20th of March. People will have to adapt, and we’ve all got to step up.
As the leader of our business, our family company, without a doubt there are a lot of people very scared and nervous. It’s part of my job to give people something positive to think about. We’re strong, and we’ll get through this and, in fact, be better than we were before.
We have a Facebook group at the company, and every week I do a little video to try and put people at ease and always try to be positive and give people hope, so at least with all the other hardships going on, our company is still going to be there. And hopefully we can all look back on this in years to come and say we got through it.
Q: And has everyone been OK. Have you had people become sick with COVID-19?
A: It’s a difficult discussion. We’ve had people who have been sick. You get up in the morning, and, if you have certain symptoms, you wonder. I suffer with hay fever, with all the blossoms coming out and all the crops coming out… I’m sneezing and coughing a lot. I wonder, have I been coughing more than normal, is that coronavirus? Between my wife and me, every time we sneeze or cough, we keep asking, are you alright, are you alright?
The most important thing for our friends and colleagues is we’ve done everything we can to keep them safe and make sure we’re there for them. And even if they have a cough or flu, they have no worries of having to come into work.
It’s important everyone looks after themselves and does what the country is telling them to do, which is to stay at home and no essential travel and protect our health service so they can cope with the people that are ill.
Q: Are you finding in the UK, everyone is following social distancing and the other government recommendations?
A: For the most part, everybody is going through it as the routine now. It’s hard, especially if people don’t have a garden, or if a family is living in a small apartment, it must be very, very difficult. Most people are doing a good job of acting sensibly, giving people safe distance.
With online technology, we’re all using Zoom and Netflix, people have just sort of reinvented how they live and what they need to do to survive. No one wants this long term, but I think a lot of people have said let’s get through it and get on with it.
I get these jokes that come through on TikTok (a social media tool), and on comedy shows, and people sending funny sketches… we’re all doing it. Sometimes it’s good to have a laugh.
Q: Have you seen the amusing Les Misérables song adaptation performed by the British family in lockdown at home in Kent? That made me laugh.
A: Yes. There are some fantastic ones. There’s this amazing story about an ex-army captain, 99 years old, who decided to walk laps around his garden every day to raise money for the doctors and nurses, and it got co-opted in social media. Captain Tom Moore has raised 22 million pounds for the National Health Service. It’s a major feel-good story that has captivated the headlines and that old British spirit.
Q: You’re raising many people’s spirits as well.
A: It’s a very difficult time for everyone. The important thing is we remain respectful to everyone in our companies, and we do everything we can to support our growers, who are having a difficult time. At Reynolds, we’re trying to keep positive and find new ways to improve. I know we’ll get through this. Stay safe and well, and I look forward to seeing you at this year’s New York Produce Show!
When we planned to launch The London Produce Show and Conference more than 6 years ago, we made visits to the United Kingdom, and an old customer of the Pundit’s family business said we should talk to Tony Reynolds. So we took a train and went to visit.
Tony was a very successful foodservice distributor, and we somehow connected. Perhaps it was the pictures of the family legacy, at the old Ridley Road Market in Hackney or the Old Spitalfields Market in Whitechapel or the Spitalfields Market in Leyton. Maybe it was because when we spoke with Tony’s father, it felt like talking to the Pundit Dad and Grandfather, a proud legacy of achievement, but, even more so, pride in the accomplishments of Tony. After all, what was once a small wholesaler had grown into an enormous foodservice distribution company stretching across Britain.
It is, of course, a most difficult situation, as it is around the world. The short term loss of business due to the closing of restaurants and recreation is painful, but the uncertainty of the future makes all plans problematic. When will we reopen… what will be required in terms of social distancing in restaurants and facilities in the future… what will ultimately be the ‘new normal” and for how long?
Fortunately, Tony doesn’t have to imagine the future alone. Aside from a strong team, including his wife Sarah Reynolds, his sons, Tom and Nick, have also joined the business over the past few years. We don’t know what the future will bring, but it will be different from the past. And having the blessing of working with young people, the only ones who can ever really live in the future, is a powerful asset.
Tony has spoken at both The London Produce Show and Conference and The New York Produce Show and Conference for many years, and he has been interviewed in the pages of our publications for just as long. Despite the challenges and difficulties, in the years to come we’re betting on having Tony and his family recounting the story of how they made it through difficult times and recreated a business to serve a future they had never expected.