Online grocer Farmdrop goes bust and cancels Christmas deliveries

The online ethical grocer Farmdrop has gone out of business a week before Christmas, leaving hundreds of customers who had ordered turkeys, geese and other festive food scrambling to find alternatives.

The company confirmed it had gone into administration and was “permanently closed”, so it would not be delivering any orders from Friday onwards. Those who have paid will have to approach their bank or card company to ask about getting their money back. Thursday was the final day of deliveries.

Anxious customers who had been expecting a delivery over the next few days asked on social media what would happen now and if they should attempt to source items from elsewhere.

Moira Doyle tweeted: “My delivery today is cancelled. Payment taken yesterday for Xmas order. Refund??” She added that it would be “back to Tesco” for her.

Another tweeted: “Well @farmdrop have gone bust, and with that, my Christmas food delivery … anyone got any intel on places still selling goose?”

Jane Tidey was one of those tweeting she had just received an email saying her order for Christmas Eve was cancelled. Meanwhile, Rhiannon Litterick tweeted the company to say her order had not arrived and the phone line was closed. “Please help! We’re isolating, so are relying on this order,” she added.

The London-based company was set up by the former City broker Ben Pugh in 2012 after he became frustrated by what he saw as a lack of decent local food available in London, and spied an opportunity to connect farmers with consumers using the internet. Farmdrop specialised in responsibly sourced, homegrown and organic produce from independent producers, and sold hundreds of different items, from organic pigs in blankets to recycled toilet paper.

According to trade magazine the Grocer, Farmdrop had 10,000 customers at the start of 2020, though it expanded rapidly during the pandemic, enjoying “unprecedented growth” in orders as large numbers of locked-down households switched to online deliveries.

But earlier this year it warned “the growth in orders and sales has not translated into profitability”. Its latest accounts filed in July showed the company reported pre-tax losses of £10m compared with £11m the previous year.

Farmdrop’s demise deals a heavy blow to its 450-plus producers, some of whom said on social media they were owed money.

John Malseed, the director of Frenchbeer Farm in Newton Abbot, Devon, one of Farmdrop’s main suppliers of turkeys, said the news was “a bit of a kick in the teeth”.

He said there were hundreds of its turkeys in a warehouse in London and “we are trying to get our stock back”. Malseed said he was hopeful he could send them on to the customers who had ordered them, but that it was too early to say for sure what would happen.

His farm had more than doubled the number of birds it produced this year, Malseed said, adding: “We will try to fulfil as many of their orders as possible.”

Farmdrop began by delivering produce from local farmers to libraries, community centres and pubs, but later upgraded to a fleet of electric vans so it could offer next-day deliver directly to people’s homes.

In June 2018, the company said it had raised £10m from investors, including the founder of Skype, Niklass Zennström, to take its home delivery service to the north of England. Other shareholders include Wheatsheaf Group, part of the Duke of Westminster’s Grosvenor Estate, and Impact Ventures UK. Another high-profile backer is Alex Chesterman, the founder of property website Zoopla.

In the accounts filed in July, the firm’s auditor talked about the financial challenges facing the business and said: “These conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”

In an email to customers, Farmdrop said it had been working to secure the support and capital it needed to continue, but “it has become apparent that we have exhausted all possible options … We will no longer be able to serve our cherished customers.”

In another email, it said: “If you have paid for an order with us, we would recommend getting in touch with your bank or card supplier to initiate a chargeback as the refunds now sit with the administrators. If you have booked a delivery but have not yet been charged, you will not be charged.”

Comments are closed.