Vegetable box firm Riverford doubles staff payout despite plunge in profits
Appetite for organic food continues from Covid boom but firm warns inflation and rising costs are eating into profits
The organic vegetable box company Riverford doubled its payout to shareholders – including hundreds of workers – to £850,000 last year despite a dive in profits as sales continued to grow beyond the pandemic boom.
Sales rose 1% to £110.8m in the year to 30 April 2022. However, the company said that trading conditions and cost pressures this year and next could be some of the worst in its 36-year history after profits dived 56% to £5.2m.
Riverford, which delivers organic vegetable boxes to 200,000 homes, said profits had been hit by increased marketing costs and pay rises so that it became an accredited real living wage employer, as well as the shift to fully home-compostable packaging.
However, it increased a payout to workers, who now own 77% of the company after a deal with founder Guy Singh Watson, who now owns 23%. An employee trust which pays out to workers bought 75% of the business in 2018 and bought a further 3% last year.
“We emerge from Covid into an unsettled world,” wrote Rob Haward, its managing director, in the accounts. “The full effects of Brexit are still unknown, the world has a nasty Covid hangover and we are experiencing a war in Europe. All of this has created unsettled conditions for business and a cost of living crisis for consumers.
“The next few years are going to be unpredictable to say the least. Indeed, we feel that the next two years, trading conditions and cost pressures could be some of the worst we have seen in our history.”
Riverford said it faced more competition as supermarkets and small businesses alike had invested in home delivery during the height of pandemic restrictions when many shops were forced to close,
However, the company said “our future is bright” as it predicted more shoppers would want to spend in a way that did not contribute to “making the problems facing the planet and humanity worse”.
The company is aiming to use 100% electric delivery vans by 2025, rising from 10% to 70% this year alone, and will double its solar panel capacity across its four sites to 810KW to help power operations.
Riverford is also experimenting with different types of farming – including mixing nut orchards and livestock, and a plan to plant 5,000 more trees this year, adding to the 1,600 already in the ground. “Working with our farmer friends, we want to set out a blueprint for how the UK should farm in the future, for the future,” Riverford said.