Pete Russell has been running Ooooby for over ten years. With their recent launch in the UK, the company now operates in three different countries. In this interview he describes some of the challenges presented by Ooooby’s local approach to food distribution and how Ooooby has overcome these with innovative use of supply chain and technology.
Ooooby aims to cut out the middlemen between producer and consumer, how does this contrast with the approach taken by Supermarkets?
Take my previous business for example, where I was importing pastries to Australia. The grower who would sell his wheat to the manufacturer who would produce the croissants in their factory. Then you would have an agency in Europe that was the exclusive agent for this factory’s products globally who would sell to an agent in the UK, who in turn sold the croissants to us, the agent in Australia. We then sold directly to the supermarket but also to wholesalers, who in turn would sell on to their distributors who would finally sell these to cafes or high street retailers. Those agencies are there for a reason because they extend the reach of the product but the payoff is the exclusivity agreement and their resulting fee.
How does Ooooby offer a more compelling alternative than the supermarkets for producers?
When selling to supermarkets growers usually get 20% of the retail price, with Ooooby they typically get 50% of the price. We’re able to do this because of all the middlemen we cut out.
In the UK there are two major organic players, Riverford and Abel & Cole, but there are also hundreds of small independent operations that are like “mini Riverfords” which instead of having say 60,000 customers, have around 200 each.
What Ooooby does is equip these smaller operators with the technological firepower that Riverford and Abel & Cole have at their disposal.
Ooooby was founded 10 years ago. What has the journey been to get to where you are now?
Our plan at launch was to spend a year prototyping a system in New Zealand that could be then be scaled elsewhere. Nine years later and we were still building out the prototype because it’s way more complex than it appears on the surface. All growers have their own idiosyncrasies and the more growers you deal with the more product lines you have. There are just so many variables to take into account to create a customer experience that people will rave about. So it took a lot longer than we thought to build and prove the prototype but now we’re at a point where we’ve got that all under our belt and we’re ready to scale in the UK.
Describe Ooooby’s distribution centres
Originally when we launched in New Zealand we ran our own company owned distribution centres, or “hubs” as we call them. Our first one was a shipping container in a car park which serviced around 200 customers. Then we partnered with a large wholesaler and leased space in a food-grade warehouse (one with a cool room, pallets and forklifts and the ability for trucks to come in). Recently we decided the hubs are a business in themselves and we are going to focus on the technology platform instead. We sold the hubs to the teams that were running them; so now the hubs are independently owned.
What has been your strategy for launching in the UK?
When we arrived in the UK our model was not to create company owned hubs but to work with existing small farmers with delivery services and tool them up with our system. In the UK there are two major organic players, Riverford and Abel & Cole, but there are also hundreds of small independent operations that are like “mini Riverfords” which instead of having say 60,000 customers, have around 200 each. What Ooooby does is equip these smaller operators with the technological firepower that Riverford and Abel & Cole have at their disposal. Our platform helps to administer their sales, transactions and logistics so that they can deliver a customer experience on a par with what you’d get if you bought from one of the major players.
What software does Ooooby use to power its platform?
We’ve built our own tech in house because it’s such a specific type of challenge we’re trying to solve. Our software is primarily focused on receiving, collating, packing and dispatching deliveries on the customer side. This is because you’re dealing with thousands of customers but only 10-20 suppliers so there’s a lot more complexity in the customer facing side.
An example of where our software helps is in planning optimal delivery routes for drivers to deliver to customers. It will print the labels for boxes and ensure they are loaded onto the delivery van in the correct order. The driver then has an app on their phone which helps them navigate.
On the supply side, human conversation is key as we need to build strong relationships with our growers. Therefore our software aims to complement these traditional communication channels rather than replace them.