Farmdrop, an internet company that delivered food directly from small farmers, was shut down.
The firm sent an email Friday morning to its customers stating that deliveries would end on Thursday. This left many people confused and still unsure about Christmas.
Some suppliers claimed they owe Farmdrop money, but were unable to contact the company.
The disappointment of customers who were unsure whether they had been disappointed by their Christmas orders have been shared online.
Kate Marfleet, customer on Twitter wrote she’d been charged for her Christmas order that was due to arrive on Friday. Other customers sought guidance on where they could get their order on time for 25 Dec.
It is a good idea @farmdropMy Christmas food delivery has been cancelled as I went bankrupt. Anybody have any information about places selling goose products? 😑
— Lamlamlamlamlamyaaaa (@dealam) December 17th, 2021
Farmdrop was contacted by BBC to get a reply.
Farmdrop advised its customers in an email that was sent to them by Farmdrop, and which was published in The Grocer trade magazine.
According to the email, “If your order has been paid for with us we suggest getting in touch and requesting a chargeback from your bank/card supplier.”
Nicola Simons, founder of fruit preserves and chilli jam producer Single Variety Co, said that Farmdrop still owed her £2,200 in unpaid invoices dating back to August.
She told BBC that she was shocked to hear they had sent her three reminder invoices regarding each unpaid invoice, but no reply from the accounts team.
“It has made me very angry and upset, as they were supposed to be supporting small suppliers. But they have caused us much more harm that good.”
She continued, “They have to’ve seen it coming. Why did they keep ordering from us. The lack of openness and transparency is appalling.”
Kate Clark, the founder of Luscious ice cream and custard business, said that she has been owed money since May. This was despite being asked for payment.
“The worst part about this story is that they kept ordering from suppliers, myself included (many small producers), while failing to pay the outstanding invoices,” Ms Clark said in a Linkedin message.
Farmdrop sent an email to its customers stating that they had been unsuccessful in securing the necessary capital and “support” to sustain itself.
They wrote that their goal was to make a significant impact on the world by “influencing positive changes in the food industry.”
It said, “It is becoming apparent that we have exhausted every option.” We must inform you with great sadness that we are unable to continue serving our beloved customers.
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The Grocer reports that Farmdrop has 10,000 customers as of 2020.
Farmdrop witnessed a rise in demand immediately after lockdown began and had doubled its order volume.
But despite a spike in sales to £12m during the pandemic, in 2021 the company reported pre-tax losses of £10m compared to £11m the previous year.
In June last year it secured £6m in funding from investors including Wheatsheaf Group, which is part of the Duke of Westminster’s Grosvenor Estate as well as Atomico, a fund that was set-up by Niklas Zennström, the co-founder of Skype.
Nine years ago the company was founded. Last year, it expanded its delivery area to another 2.7 million homes, making it a total of 7.1 million.
Farmdrop was home to over 450 producers. Dr Kate McLoughlin from Manchester Metropolitan University is a senior lecturer in supply chains management. However, Farmdrop’s closure came amid larger supply chain issues.
It takes time to establish local supply chains, even if capital is flowing in quickly. This makes it difficult to meet demand for such rapid increases.
Dr McLoughlin stated that this is an issue in the larger food system. He cited dramatic rises in fuel prices, transportation costs and driver shortages, which could be contributing factors to the company’s closing.
She explained that while they saw a surge in customers returning to them, “the food system is still very vulnerable.”
A rising cost-of-living, spiked energy prices, and shortages of workers have all contributed to increasing the demands on the food industry during the pandemic.
The shortage of drivers for lorries has caused problems in many UK industries, such as petrol stations, supermarkets and other retail outlets.
The pandemic has made it difficult for food businesses to find workers. But, Brexit is adding to this challenge, says the Organisation for Economic Co-operation and Development.
Animal feed prices have risen from overseas, which has meant it’s not always the suppliers who are suffering. Their According to Dr McLoughlin, suppliers could have problems along the supply chain.
“Costs and speed were important for our supply chains, but now there is free flow of these materials and it’s time to transition to a local economic system.” she stated.
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