Secrets to starting an online direct-to-consumer business

On this episode of the Sound Advice podcast, field&flower co-founder James Mansfield gets into the meat of building a top subscription business.

From selling direct-to-consumer and finding your Billy Brisket customer, to dealing with sneaky rivals, price setting and learning the art of butchery, there’s plenty to get your teeth into.

Here’s what we cover:

Choosing the direct-to-consumer route

Bex Burn-Callander:

So great to have you on the show. How are you doing? How’s business?

James Mansfield:

Very well, thanks for having me. Business is great, thank you. Some challenges at the moment, but yeah, we’ve had a good couple of years.

Bex Burn-Callander:

You’ve had a storming couple of years.

I remember reading about you in the papers because you, alongside some other subscription services, saw this massive boom prompted, I think by lockdown, but then you seem to have sustained that growth.

Tell me about the inception. What you were doing before, and what gave you the idea to launch something like this?

James Mansfield:

We certainly looked at whether direct to consumer was growing, but there weren’t really many examples in the market. There was Donald Russell and a few others, but there wasn’t anybody specifically doing what we did. So it was definitely a bit of a punt.

The idea really was the fact that (field&flower co-founder) James Flower’s beef farm was producing high-quality grass-fed beef, but it was going to market. So it was getting lost in the food chain. He wasn’t realising a premium for the product.

So we thought, if we can sell direct to consumer, we can pay James’s dad a bit more for the cattle, and then everybody wins.

The money’s going back to the farmer directly, we’re paying a bit more and we can tell the story of the product being grass fed and the field that it was raised in.

And I think that really resonated with people.

But ultimately, people need to eat, and people were eating beef mince, and burgers, and steaks.

So we were kind of playing at percentages, I guess, in some ways because we knew that we were selling products that were popular in the UK.

I think that gets you off to a good start.

Listen to your customers’ wants and needs to develop your business model

Bex Burn-Callander:

And where did you start?

So tell me, what you did in the outset and what we’ll see how that then developed as the business evolved.

James Mansfield:

Well, we kept it really simple at the beginning.

We decided to loan a beef animal from James’s dad. With that we created 32 beef boxes and we sold them to friends and family, and there was no talk of subscription at that point.

It was very much, what do people think of the product?

We did a lot of that for the first couple of years, we were just trying to understand the product.

Ultimately, there was a point where we had some excess beef, in terms of the four-quarter of the animal. So we thought, well, we need another route to market here.

So actually, before subscription came, we were going to food festivals and using our four-quarter beef to make burgers and we were selling burgers and some minute steaks—that was great and actually, really exciting.

There was better margin in that, and the bright lights drew us towards building an events business for a short period.

We got back from Glastonbury 2011, having not had a good time there and we decided that we were really going to focus on online.

So we were thinking about what the online, e-commerce site should look like.

Our customers helped us in making those decisions because we had a few regulars at that point while running the events, and they wanted to repeat their previous orders.

So we went to a food show at Earls Court and a guy came up to us, and we were just selling some of our product.

And he said, “I’d like to order a beef brisket, three kilos, every four weeks.”

He became known as Billy Brisket and was a great advocate of the business for the first year.

But our customers were saying, “Well, this is a great product, and I actually cook with beef mince every week for my family, so can you just set me up on direct debit and get this delivered to me every two or four weeks?”

So that kind of led the way, and we tried to understand how people were using our products.

The feedback that we were given is what led us to subscription.

I think if we didn’t have a product that people were cooking with regularly and repeat purchasing, then we wouldn’t have decided to have a subscription business, but that was certainly something that the customers were telling us.

So I’d say a big strategic moment was post-Glastonbury, deciding to get a new website built and bringing our subscription functionality to the site.

That really then set us on the e-commerce journey.

Bex Burn-Callander:

Bless Billy Brisket.

Do your research before festivals like Glastonbury

Bex Burn-Callander:

And what was so bad about that Glastonbury?

Was that the horrifically muddy one?

James Mansfield:

I’ve tried to forget about it, and this is going to sound really naive, but we ended up in the dance area.

I think we were the only food vendor there and we really should have spotted it.

But we got sent a map pre-Glastonbury, probably a week before saying, this is where you’re going to be. It was a sort of a pencil drawing with a cross, a bit like a treasure map.

But we hadn’t really spotted that we were in the dance area, and we were about 50ft from a path. So yes, it was very wet, as you would expect of Glastonbury.

But we watched thousands of people walk past us not buying anything, because we were in the wrong area.

But it taught us a real lesson and we had paid a lot to be on site.

I think we had paid £20,000 for everything that we needed, stock, staff, the marque, the gas, the electricity.

So, we learned a lesson really quickly there, and we’d actually had a really good V Festival the year before.

But we’d only done two music festivals, and we decided that actually, that wasn’t the focus of the business. We wanted to grow an online business. That was apparent at the beginning.

But as I say, we got led astray. I think luckily, we stopped that pretty quickly.

Bex Burn-Callander:

That’s interesting though, because I think as a food business, as an entrepreneur, you think that festivals are going to give you amazing exposure and will be really powerful for the brand.

But I like that you learnt quickly that actually, a lot of people at a festival, off their heads, staggering around, are probably not going to remember you.

James Mansfield:

Yeah no, absolutely not.

Someone said to us, which was actually really good advice, that you need to look at festivals like Glastonbury over a five-year period.

You need to go there, you need to trade, you need to be in the right place. You need to take a view that you are going to have bad festivals.

So I think, we could have had a very different experience, if we’d gone and done some research as to where we were going to be, but we weren’t paying a huge amount for our pitch.

Testing different channels and understanding what works for you

Bex Burn-Callander:

Can you tell me how the business has grown since that wholesale pivot to the subscription model, the delivery model, how have you reached new customers?

How quickly has the business grown, and what have been the main catalysts for that growth?

James Mansfield:

I would describe our business philosophy as slow and steady.

We didn’t go out and do a big fundraise at the beginning. It took us five or six years to get to our first raise, and our only raise.

We wanted to build a business with really good foundations, and we could see Abel & Cole, and Riverford had done that over a long period of time.

We wanted hold on to our equity as well, and we made no secret about that.

So we were taking a longer-term view of how to grow the business.

There were lots of moving parts as well, due to us being a DTC business.

At the beginning, we were literally farming the beef, all the way through to doing the sales, the customer service, and the delivery. We were spinning lots of plates.

I think the thing that helped field&flower grow was, there was no silver bullet, it was just testing different channels, and quickly understanding what was working, what was bringing the right customers in.

So when we were building our email list, we were signing customers up to our subscription plan at food shows.

That’s what Flower and I did for the first four years of the business.

PR played a massive part in growing the business and we were doing lots of direct sales.

A big moment for us was bringing on board Steven from Abel & Cole. He really started to transform the business into our digitally led, customer acquisition business.

We’ve probably got five or six customer acquisition channels that work really well for us, but it’s a challenge.

That’s the challenge for any online business, managing customer acquisition costs, lifetime value and ensuring that we’re fishing in the right pools for customers.

But I think we got to a certain point where word of mouth really starts to help, because people started referring their friends on to us.

Building strong email lists and using referrals

Bex Burn-Callander:

When you say you became a digitally led customer acquisition business, what does that mean?

Does that mean you find customers through social media, or you do online hookups and partnerships with other brands, and that’s how you get people in?

Explain for anyone who’s new to this whole world of customer acquisition, what that means and what channels have been most successful.

James Mansfield:

So we definitely benefited from our email list.

As I said, that was something that we built ourselves, up to around 40,000 people quite early on. So we could market that way. We began to do lots of social media advertising, PPC (pay per click) on Google.

We have a platform on the site, which is called ‘Mention Me’, which is a refer a friend platform that really helps people refer their friends to field&flower.

Then, obviously, PR plays a huge part. We’ve got an article from The Independent, I think it was in 2013, for the best meat box. It still delivers a huge amount of traffic to the site.

So there’s huge value in having those high-quality links from press articles, as well.

So, that’s a bit of an overview.

You don’t have to fundraise when you first start your business—you can do it further down the line

Bex Burn-Callander:

James, you mentioned a little while ago that your approach to growth was slow and steady, and that, that’s why you chose not to raise a lot of investment.

And when you did raise investment, it was quite a long way in.

Can you tell me about that fundraising? I think it was a Crowdcube raise.

And tell me about your approach.

What went right? What went wrong, if anything? And what you learned from that experience.

James Mansfield:

Yeah, the theory was that we didn’t want to accelerate our growth in the early days, because we weren’t set up to do that.

And when you take people’s money on board, you have to be responsible with that.

We didn’t do a fundraise until 2017.

That was when we felt comfortable, that we’d got the business in a good place. We’d just posted a profit, we could see how we could grow, and we wanted to be responsible in taking other people’s money on board.

So we decided that we had a really engaged audience at field&flower, because of the subscription nature of the business.

We spoke to Seedrs and we spoke to Crowdcube, and we decided that Crowdcube had done a few more food raisers at the time.

We decided to go with those guys, and they were really supportive, and we had a really good experience of how you think about doing a fundraiser.

It was the first for us, as we say.

We’d watched other businesses do it on Crowdcube, and we built a whole campaign, to market to our customers, to friends and then the wider audience.

And it worked really well.

We got 52% of our funds from customers, which was great. We were on site for around six weeks, and we raised £877,000.

We used the funds to really accelerate growth, but also to bring in some experts into the business, which was going to be really important, to support that growth.

So it was a really tough period to go and do that fundraising.

We were running the business in the evening, doing the fundraise in the day and it was a huge amount of pressure because if you don’t raise the target amount, then you don’t get a penny.

We were also obviously, having to talk about the business, the financials and we had competitors investing in us.

It was a challenge, but it was really positive.

We are really thankful that we got through it, and it was a very positive experience. It really was fundamental in where the businesses is today.

Competitors might invest in you to sneak a peek at your financial information

Bex Burn-Callander:

You had competitors investing in you? What?

James Mansfield:

Well the minimum amount is £10, that you could invest in our fundraise.

So we could see people, in other businesses, had gone on and invested £10. The benefit of that is that you can get access to financial information that we were trying to give for serious investors.

Then, they were going to get investor updates, as well—which they still do.

We still send, of course, to investor updates. But that’s part and parcel of fundraising, and part and parcel of business, I think, it’s a very competitive sector.

Bex Burn-Callander:

I’m so naive. I wouldn’t have even thought that would happen.

But of course, then you get early access to all these numbers. Why wouldn’t you try and have a sneaky peak, if you can?

Understanding your rivals and how to position yourself against them

Bex Burn-Callander:

On that point about it being a competitive sector, tell me how competitive is it?

You mentioned a couple of long-standing rivals, but there are lots of new players coming into this space.

Do you see yourself as competing with the recipe boxes?

Talk to me about rivalry.

James Mansfield:

Yeah, well we are really competitive.

So, we definitely have a look at what’s going on all the time. We were really surprised when the recipe boxes turned up.

We were at a food show, Flower and I were stood behind a table, selling our subscription service, and Gousto turned up next door.

We were like, who are these guys? Where’s this come from? Recipe boxes. We thought that was just kind of Scandinavia.

We obviously have a very different proposition to them. I think that’s the first point.

Recipe boxes are designed for people that are short on time, that don’t want the waste and want to cook quickly and follow recipes.

We know that our customers are very different.

They want to cook from scratch. They want good-quality ingredients. They want free-range chicken, grass-fed beef, etcetera.

But ultimately, I think we have got different motivations in the kitchen. So I think we’ve got a very different set of customers. I know we do.

Our real competitor is the supermarket.

We are taking customers from the supermarkets, but that’s where we’d also lose a customer, is back to a Waitrose or a Sainsbury’s. So they’re our competitors, really.

Our sector, in terms of just pure meat delivered to home, is really small. There’s not many of us here anymore. I’d say that’s an overview of competitors, really.

Bex Burn-Callander:

You say that you sometimes lose people back to the supermarkets.

Does price point play into that?

I’m asking that because as we’re doing this interview, there’s a whole cost of living crisis in the news every day, and there’s fears that a lot of people are just not going to have much disposable income.

So, talk to me about price point.

How you compete with the supermarkets, knowing that you are a premium offering.

How do you ensure that you maintain your margin, yet you’re not too expensive for customers, yet you are reassuringly expensive?

James Mansfield:

I think when we began, we had a fairly heavy premium on the product, because we were very small, and we didn’t have any kind of scale.

We’ve managed to position ourselves now as competitive with the equivalent product if it’s there and on the supermarket shelf.

But that’s just come over years of working at trying to grow the business, working with our suppliers, making sure that we can pass a premium on to our customers in certain categories.

We do price check against Sainsbury’s and Waitrose, and we’re often a similar price. Some under, some slightly over, but we know that we need to compete there, where we can.

But equally, we recognise that our job as a business is to explain to customers that the product has got traceability.

That the animal hasn’t been given antibiotics, that we are treating our farmers fairly.

We’ve got long-standing relationships with many of our farmers. Years and years, really. That’s the way that you can charge slightly more for the product.

We explain that that’s being passed back to the farmer.

I think the benefit of field&flower’s on pricing is also that we’ve got a short supply chain.

So the product’s not passing through lots of hands, it’s going from farm to butcher, to customer essentially. That really benefits us in being able to compete on price.

But you’re absolutely right. We want to be reassuringly expensive in some regards, because meat has become almost a commodity product in the supermarkets, and we shouldn’t be able to buy a chicken for £1 or £2. It’s not right.

So it goes back to the earlier point. We want to go back to saying, this is great-quality meat, but it’s not something that should be eaten every night of the week, really.

Learning every aspect of your business—including butchery

Bex Burn-Callander:

You said that you and the other James learnt butchery, basically, so that you could manage every aspect of the business in the early days.

How did you learn it?

And how important was that education in terms of being a better entrepreneur and running a better meat business?

James Mansfield:

We understood early on that we really needed to know our product, Flower understood the animal in the field, and how to rear that to great quality.

But we weren’t butchers ourselves. So we had a friend that was our first butcher, Andy. He now runs some Somerset charcuterie.

He taught us really the art of butchery.

He was definitely leading the way, and it stood us in such good stead today, because when we go and talk to our butchers, we talk to our farmers, we’re always talking about carcass balance and we’re buying in natural proportions, and making it as sustainable as possible, so there isn’t wastage.

So it was a great learning curve early on, and certainly miss those days of being stood around the butchery block and creating burgers that you knew someone was tasting the next day.

It was a really fun time.

Slow and steady wins the race

Bex Burn-Callander:

Where is field&flower going to go from here? Because you’ve talked about the slow and steady growth model.

Also because what you are selling is a premium product, this is a slow, sustainable product, the idea of you becoming a mass market brand, doesn’t quite feel like it works.

So, what are your growth plans? How big could you get, and are there limits on how big you could get?

James Mansfield:

It’s a question we get asked quite a lot. And there is a big addressable market available in the UK, because of the type of product that we’re selling, which as I said, is staples.

Our top sellers are beef mince, chicken breasts, whole chicken, sausages, and bacon. So there’s lots of people cooking those products, eating those products every week.

We haven’t got big marketing budgets, and we haven’t done any big fundraisers. We haven’t got that kind of capital to go and deploy, and really try and eat into market share.

We’re just saying ultimately, this slow and steady approach, albeit we went from I think, £32,000 sales in our first year, to £13.2m in our last financial year.

So we would consider that good growth, but we think there’s a huge market for what we’re doing.

We just need more people to know about the business and the brand. We will continue to use the channels of communication we’ve got to continue to grow the business.

We don’t want to accelerate growth too fast. We need to be really careful about our growth, but we will continue to grow.

We feel that the business can get up to £50m, £75m in sales, for sure. I think we were fairly responsible with that. That certainly showed in getting to profit over the last couple of years.

Outsourcing could launch your business forward—don’t be scared to try it

Bex Burn-Callander:

That’s smart. You don’t buy outright, just in case it’s like a temporary blip. You only invest what you’ll actually end up getting back.

That’s really interesting.

Tell me then James, so in the history, in the 12-year history of field&flower, what’s the biggest mistake that you guys have made, and what did you learn from it?

James Mansfield:

Luckily, we haven’t made any that are so catastrophic that we are not here anymore.

I think the biggest mistake that we’ve made is not trusting early on that we could outsource work with a butchery partner.

I think, we were certainly butchering for as I said, a couple of couple years too long probably.

While it was great to have that control, I think looking back we might be a couple years ahead if we had we’d let go of that.

But we were very worried about letting go at the time, because we knew how important quality was.

So I think that’s probably the thing I look back on and think, if we could change one thing, it would probably be that.

Don’t let your website become a money pit

Bex Burn-Callander:

How hard has it been to evolve with the growth of the business?

Because I presume that your role has changed dramatically over the years, in some ways in a positive way. In some ways you mentioned you missed the butcher’s block.

How tricky has it been to make sure that your skills keep pace with what the business needs?

James Mansfield:

Business is really, really tough and I take my hat off to anyone starting out now, or 10 years in, or 30 years in.

I think you have to try and evolve, and you have to realise what you are good at, and what you’re not good at more importantly.

We try and hire people that are better than us and are specialists in areas. That’s absolutely key.

Understanding what your key skills are.

So I think ultimately, trying to grow the business by yourself, thinking that you can do everything, isn’t the right answer.

I would say early on, it’s really important to make sure the website’s SEO friendly. We didn’t do that.

So we spent a lot of time trying to improve the search functionality on the website. I’d say, make sure that you don’t spend too much money on a website.

There’s a huge variance from what I can see when we look at re-platforming or even when we were starting out, looking at websites.

There are low-cost options that can do an awful lot, that we didn’t realise at the beginning.

I’d say, be smart with what platform you choose, make sure that you can scale with it, but don’t spend too much money on that.

Bex Burn-Callander:

Don’t let your website be money pit. That’s great advice. James, thank you so much for coming on the show.

I’ve loved talking to you, and I can’t wait to see where the business goes from here.

James Mansfield:

Yeah. Thanks Bex. It’s been great talking.

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Want to know more about field & flower and James Mansfield?

You can find field & flower on their website.

You can also check out James Mansfield’s LinkedIn page.