Start-ups need to show a clean pair of heels
Making a return visit to the young meat retailer Muddy Boots as it begins to grow-up has thrown some interesting light on the challenges faced by a typical start-up and how important it is to constantly flex the model.
Having initially been a branded supplier to Ocado and Waitrose of meat products the company 15 months ago opened its first ship in North London’s Crouch End. The primary objective was to at the very least match the supermarkets in terms of opening hours (it closes at 10pm) and deliver a premium product.
It has quickly grown to account for over 50% of sales but they have been derived through different ways than expected. The shop includes a large communal table at its centre and the intention was to run the shop as a wine bar in the evenings but the table is now more important as a way to market the shop’s products than sell alcohol.
Bookings for private parties to be held around the table are building up to now be more than a weekly occurrence. The cured meats sold at such events have become particularly popular and Miranda Ballard, co-founder of Muddy Boots (who has written a book on charcuterie), says it now accounts for 20% of sales. And with double the margin, as well as a longer life, than other meat products, it is proving a real winner.
Preparation has all been done in the back room at the store but very quickly it was realised that to grow the company needed a factory facility. This was secured recently and now – a lot later than initially planned – the company is firmly on the look-out for more stores. These are in what Ballard calls the “villages of London” with Stoke Newington, Highgate, Queens Park, East Sheen, and Muswell Hill high up on the target list.
What she looks for in a location is the existence of retailers Cook, Gail’s Bakery, JoJo Maman Bebe, and Oliver Bonas. (Crouch End has all of them). This is a sign the demographics are right for Muddy Boots. She expects to have the second unit open by February, a further two by July, and a total of 10 trading over the next three years.
The one retailer she doesn’t want to particularly be trading near to is Waitrose. This is not because it sells Muddy Boots products (the one in Crouch End does not as it is too small) but because it is the toughest competitor to independents food retailers.
“They are the worst for independents to compete against because of their product [quality] and people feel good about shopping with them,” says Ballard, who adds that it was noticeable in foodie town Ludlow that the locals have allowed a Tesco and Aldi to be built but blocked the entry of Waitrose.
However, she is nothing but complimentary towards the supermarket. While the media is full of stories about large retailers imposing ever harsher payment terms on their suppliers she says Waitrose is very much the opposite.
When Muddy Boots was initially classified as a ‘local supplier’ whose goods were stocked in only a very small number of Waitrose stores the payment of invoices was in a mere 16 days. This then went to 21 when it supplied its goods into more Waitrose stores, and now that it supplies into as many as 140 stores it is still paid in a mere 30 days.
“This really helps small businesses. And the accounts team are very efficient, lovely people to deal with,” she says.
The other big change Muddy Boots made in its early days was to shut down its website after it realised that the cost of home delivery was making most orders unprofitable. However, now it has a shop established it recently re-launched online and with it a delivery service via its own van to specific postcodes as well as a click & collect service. The expansion to other areas will be handled in a controlled manner and linked to subsequent store openings.
Watch this space for the next installment…
Glynn Davis, editor, Retail Insider