How FareShare found the funding and confidence to grow
FareShare has had its confidence knocked a number of times in pursuit of its social mission. But since taking on social investment it is gutsier than ever as it tackles the gargantuan issue of food waste in the UK.
Pioneers Post spoke to FareShare CEO Lindsay Boswell about how the organisation has changed for the better since it won social investment.
In the UK, an enormous amount of food gets wasted along the supply chain of the food industry. FareShare’s conservative estimate is that 400,000 tonnes of food goes to waste every year.
Meanwhile, tens of thousands of charities spend large sums of money buying food to serve up, whether they’re running a food bank or a drug rehabilitation service. FareShare exists to try and address these two problems and for CEO Lindsay Boswell converting surplus food into an affordable resource for the social sector is a no brainer.
FareShare has received investment from the Social Investment Business and CAF Venturesome and now has 20 regional centres across the UK, which are all run as autonomous social enterprises, acquiring and storing surplus food from supermarkets and distributing it to charities and social enterprises in their region.
It’s a tricky balance dealing with the vast cast-offs of the food industry, which means Lindsay doesn’t claim to run a slick business operation. Pragmatic and realistic about the challenge at hand, she paints a picture of a constant and committed work in progress and explains why social investment is a key part of it.
Pioneers Post: Why did you approach social investors in the first place?
Lindsay Boswell: Working with the food industry and redistributing surplus food to Britain’s charities and social enterprises requires a lot of infrastructure and management, things like warehousing, logistics and refrigeration.
Our question has always been – how do we reach the scale that would enable us to shift the large volumes of surplus food and get it served up by charities on the streets of Britain? Answering it requires considerable capital.
We earn an income from the food we acquire by making a modest management charge to the charities and cover our costs in that way. But we need to be able to respond when the food industry turns around and says here is 6,000 tonnes of food. That’s where turning to social investment really seemed to make sense.
PP: What journey did you go on internally as you looked at applying for social investment?
LB: The board ‘ummd and ahd’ for an extraordinarily long time about social investment and loan finance. The phrase we use, as a food business, is that we’ve ‘souffléd’ many times in the past.
We’ve risen up and collapsed. We’ve had to let people go, and then we’ve had a good patch, we’ve invested and employed, and then we’ve had to let people go again. So you can imagine there was huge scepticism and reluctance, which were fundamental principles for some classically conservative trustees.
As we engaged in the social investment process, at board level, at executive level and right across the organisation there was a fundamental culture shift in terms of the sense of confidence we had as an organisation. We had a really rigorous third party come and look at us, put us through the hoops, challenge us as a critical friend on quite a few things which were, particularly as the chief executive, slightly embarrassing and perhaps found wanting. But we were able to correct those, put the systems and processes in place and we then got the money.
The social investor turned around and said, “Look, your financial systems and processes and your financial management are not good enough. You need to have a proper finance director in place.” And the fantastic bit about this was that some of the partners we were talking with said, “We recognise that you need help in getting there, so whilst we’re going to lend you money we’re actually also going to give you a grant to help you put some of this development and infrastructure into place.”
It was a partnership much more than I thought it was ever going to be. And everyone involved saw it like that, it wasn’t viewed just from the perspective of, we’ll lend you some money these are the repayment rates and we’ll come and break your knuckles if you don’t keep the payments up.
PP: How did getting scrutinised by a social investor affect FareShare?
LB: Beyond simply getting the finance, being challenged about the business model, our sustainability, our resilience, and the skillset of our staff made the organisation grow up. We were able to develop faster and more rigorously than we would have been able to ordinarily with the charitable board moving us forward step by step.
The one thing more than anything else that I think has transformed this organisation has been the ability to take that step from an embryonic fledgling organisation to an early maturity organisation by putting a finance director and the right finance systems and processes in place.
After bumping along the ground, we grew way beyond the business models and business plans that we had originally put together, on the strength of the confidence that the entire process had given us. Half the time I think the most important thing is to have confidence and conviction in what you are trying to achieve and how you are going about it.
PP: What does the future hold?
LB: The key thing that we were able to do with social investment was to invest in the core parts of the business. Our thinking is that if we can get more food from the food industry then we can get it to more charities and we can earn more income. Provided the way we get it off the food industry doesn’t cost us then we are moving in the right direction.
At the time that we first started talking about social investment we could only afford to have one, part-time member of staff obtaining food from the food industry; now, we have six full-time staff. We grew by 40% last year and we have ambitions to grow by 60% this year.
We want to go from distributing 2% to 25% of the 400,000 tonnes of food wasted in the UK food industry. If we had access to 100,000 tonnes we would be saving UK charities £280 million a year. At that point we would be sustainable and we wouldn’t need any more investment.
In five years our warehouses should be self-sustaining social enterprises. In some respects we will still operate as a traditional charity, the national support infrastructure is still reliant on charitable support. Ideally we want to get to the stage where the whole business is sustainable and we haven’t got an answer to that yet – and I don’t mind saying it, it’s a work in progress.
This article is brought to you in partnership with The SIB Group and Big Potential and is part of a series that explores the impact investment stories of social ventures dabbling in this market for the first time. We're getting to the root of the challenges, triumphs and complications that make up the journey to investment readiness in order to share key advice and lessons learnt for other organisations considering social investment options.