Nightmare Before Christmas: Small Producers Left In Panic As Farmdrop Goes Bust

As households prepare to celebrate Christmas, UK Prime Minister, Boris Johnson confirms that there would be no more restrictions before Christmas Day. That said, some families have been told they will not be receiving their Christmas food orders.

Farmdrop, a company that created a platform to connect farmers and small producers with the buying public, has announced that it has gone into receivership.

Customers received an email last week from the business advising that it had made a final day of deliveries and no more orders would be fulfilled. This left many of the, wondering what would be happen to their Christmas goods and produce.

Suppliers and customers alike have struggled to reach the organisation, with many sharing their frustration online and to UK media.

The company confirmed that it was “permanently closed” and on its website, it has signposted customers to producers that may have stock available for the festive holidays.

The statement reads: “It is with very heavy hearts that we must let you know that we will no longer be able to serve our cherished customers. 16th December will be the final day of deliveries. We are so incredibly grateful for the amazing support that you, our customers, have provided to Farmdrop and all of the special producers we have worked with over the years.”

The organisation was founded in 2012 by ex Morgan Stanley

MS
broker, Ben Pugh. It is said Pugh saw an opportunity due to the lack of quality local food available to buy in London. He created Farmdrop as a way for farmers and producers to connect with consumers offering locally sourced and organic products, with a significant range available to buy.

Retail trade magazine, The Grocer, reported Farmdrop had built up a base of over 10,000 customers by 2020 which rapidly grew though the pandemic as consumers looked for food delivery alternatives.

Head of Marketing at Farmdrop, Damian Hind, explained in a September 2020 interview with Foodnavigation.com that demand had ‘skyrocketed’ during the pandemic adding: “We were able to unlock additional capacity in our supply chain and meet the new demand. Our aspiration is to become a mainstream, sustainable alternative to one of the UK’s major online supermarkets.”

Consumer buying trends including the focus on food provenance and sustainability had supported Farmdrop’s food to fork offer.

Yet in accounts filed at Companies House for July 2021, the figures presented a different story as the auditor revealed “growth in orders and sales has not translated into profitability”. Its highlighted Farmdrop had reported pre-tax losses of £10 million.

In addition to consumers not receiving orders and hastily looking for alternative suppliers to ensure they can still enjoy a Christmas lunch, over 450 suppliers to the company face significant challenges.

Organisations including Frenchbeer Farm, Devon and Single Variety Co, Bristol have highlighted that they are owed money from unpaid invoices in addition to facing a daunting future without the platform to enable sales.

Kate Clark, creator of the sweet desert company, Luscious, wrote on a Linkedin Post that she has monies due to her from the company since May.

“The most appalling part of this story is that they continued ordering from suppliers, ourselves included, (many of us small producers) whilst not paying the outstanding invoices”

Despite being backed by Skype founder, Niklass Zennström venture capital firm Atomico and Zoopla founder Alex Chesterman and raising funding of more than £30 million since launch, the market challenges seem to have wiped out the company’s future.

Local producers that have built a business around this additional supply chain are now left with an uncertain future. Not only are many facing a Christmas with excess stock and unpaid invoices, but they will also have to find a new place to connect with consumers. Farmdrop has been contacted for comment.

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