← James Reed: all about business
James Reed: all about business
62. How to stack revenue: The 3 levers that optimise growth of any local food business | Pete Russell
00:57:15
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- [00:00]
A
Welcome to All About Business with me, James Reed, the podcast that covers everything about business management and leadership. Every episode, I sit down with different guests who bootstrapped companies, masterminded investment models, or built a business empire. They're leaders in their field and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture. Sometimes growth doesn't come from demand. It comes from rethinking the model beneath it. Today on All About Business, I'm joined by Pete Russell, founder of oobe, short for out of Our Own Backyards. Peter spent more than a decade building technology that helps small local food producers sell directly to their communities, challenging the ways food systems have been organized for the last 80 years. In this episode, we talk about the long road to finding the right business model, the pivotal decision that unlocked real growth, and why stepping back as CEO can sometimes be the most entrepreneurial move of all. Well, today on All About Business, I'm delighted to welcome Pete Russell. Pete is originally from Sydney, Australia, but today he's traveled from Totnes in Devon to talk to me. Thank you, Pete, for making the journey. Pete is the founder of a company called ooby. He's going to explain why it's called UBI in a moment. But UBI is a global steward owned platform designed to support small scale producers by connecting them with consumers online. I think it's a wonderful concept, which is why I've invited you in to talk about it, Pete. And I think it's got all sorts of potential opportunities to grow and evolve to the benefit of everyone. Food is very much on people's minds, especially at the moment with so much being asked about whether food is safe, where the processed food is good for us, and what's the future way we should be traveling forwards regarding food and food production, consumption. And I know you're a person with lots of fresh thinking in this space, so thanks for coming in. And let's begin at the beginning. What is UBI and why is it called that?
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B
All right, well, thank you for having me, James. It's a pleasure to be here. Ubi. It's spelled with four O's, B Y, so it stands for out of Our Own Backyards. Its purpose is to help to put small scale back at the heart of the food system. We set UBI up as an online platform for small scale producers to be able to represent themselves online and to be able to connect with their local communities and own their own supply chain from their gate to the Customer's plate. And it started out as an idea back in 2008 when we had the global financial crisis. And you probably, I don't know if you remember, you know, what the, the type of mood there was around the gfc, but there was a lot of, you know, fear of like, wow, we've, our whole, our whole society is, is balancing on this fragile economic model and food itself is at risk of the supply chains being disrupted because money was not moving because exchange rates were spiking and so on. So that was the catalyst of it. And so it's really been an endeavor to try to find a way to bring food back to a resilient state. If you think we've been eating ag, you know, food from sort of an agricultural model for 10,000 years, and so it's been resilient for a long time, it's got a good Lindy effect. But just in the last 80 years, which is less than 1% of that time frame, we've completely changed the food system and we centralize it massively. And that has come with challenges and with implications that I don't think we've really considered deeply enough. So UBI is all about considering that and coming up with ways of sort of redecentralizing our food systems to make them more fair, to make them more social, ecologically sound and to make them more resilient again.
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A
So, so if you, if you go to ubi which is online.
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B
Yep.
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A
What will you find there? Right.
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B
Well, you'll find, if you go to ubi.com you'll find a website where we are promoting our software to farmers and to sort of small scale food producers where they can then create a shop online. So we are like a Shopify for small scale, artisan, ecologically sound food producers. The difference between UBI and say Shopify is that we're specifically built for this type of business model where it's highly recurring fresh food usually sort of harvest to order. And so it doesn't just satisfy the e commerce sales part that you'd get from Shopify. It also manages all of the logistical fulfillment operations around coordinating a very high frequency aggregation of different types of food into a single bundle that can then land on the customer's doorstep.
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A
And I imagine you charge the small producers.
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B
We do, we just charge 1.9% of whatever they sell. So it's similar to Shopify in that, in that it's a small, it's a, you know, a monthly fee. Shopify charge like a subscription fee. What we charge is a Transaction fee, but then also we bundle into our service, you know, card transaction fees and so on.
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A
So 1.9% is low, isn't it?
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B
Well, 1.9% is our cut. And then, then you've got stripe on top of that. It works out in total, sort around about the three, three and a half percent depending on the teas you're on.
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A
And what about the delivery of the, is that an additional charge?
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B
No, we don't touch the food at all. What we give the, what we give the farms is all the. So they deliver it, they deliver it, but we provide them with the, the route optimization software. So what the way it works is a farmer will create a shop on UBI which displays all the food that they have available on a week to week basis. Customers will sign up as a, as a customer to either order a one off order or they can subscribe to a regular delivery. The farm can see all the orders coming in, they can then close the orders and then they will pack those orders and the system will coordinate all of that for them. And then they load those orders into a farm vehicle or they can get a courier to come and collect them on their behalf and the system will figure out the optimal order of deliveries. And then typically the farmer will drive around, knock on the door with their grubby mitts, hand the food over to the customer, take the old box, empty box away and go on to the next customer. So it's like a farmer's market on your doorstep. You still get to see the farmer if they're the one doing the delivery. That's great.
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A
That must be really. That's a good neighborhood service.
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B
Indeed it is a good neighborhood service. And the food is super fresh because oftentimes it's been harvested that morning and delivered to your doorstep that day. And the great thing about it is the farm is getting a full retail value. So they're not selling at 20p in the pound or 30p in the pound. They do more work. They do pack the boxes and they do deliver the boxes, but they get paid a lot more for that than they would save for not doing it.
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A
If, you know, they were selling it to a supermarket.
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B
Exactly.
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A
So I went on UBI a little bit earlier when I was, was feeling hungry before lunch and, and I was looking at a shop called the Walmart Court Farm Shop. Yeah. Which is in Deal Kent.
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B
Yes.
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A
And, and I was really impressed. I mean, I thought it looked really appealing. And they had a fruit and veg box. Yep. With enough fruit and veg to feed Two people for a week.
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B
Yeah.
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A
So they said priced at £20.
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B
Right.
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A
Which I thought was pretty marvelous.
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B
Yep.
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A
And, and then I saw they had a juice box for the new year.
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B
Yes.
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A
For all of us trying to detox a bit where you can get the right vegetables to juice up for just £10. So I thought marvelous, I think I want this. But then I realized that it was just the delivery area was local to deal. Right. So it is a local service.
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B
It really is like.
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A
So you have to find the one local to you.
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B
Exactly.
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A
And set up a relationship. Great.
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B
I mean, and the way you find it. So if you go to the UBI website, there is a link there.
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A
Yes.
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B
Where you can click on that link and you just put your postcode in and it will tell you what's your local, who are the people who deliver your local, what's your local farm? So there's over 150 of these farm hubs or farm shops around the country and there's more being added all the time.
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A
So you think that from a farmers, small farmers point of view, this is a, a must do. Really. I mean it's not a big cost and there's a lot of potential upside.
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B
Absolutely.
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A
In sales.
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B
Absolutely.
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A
So you need to make them aware.
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B
That it's exactly, it's about being aware and it's also about. Farmers are slow to change. I think a farmer mindset is a very seasonal, steady as you go mindset compared to the average day to day, you know, rush sort of lifestyle. And, and they're also probably typically more in the especially small scale, independent types of farms that they're slower to adopt new technologies and new things. So what we're seeing is that when we very first started out, it took a lot of convincing and it took a lot of explaining and showing, you know, how to do it and there was a lot of head scratching and so on. Whereas now, because we've sort of hit, you know, there's 150 of them operating, it's a, it's a business model that works for them. More and more farmers are realizing, oh, I, I could do this. This is actually a way of selling my product where I don't have to sell it at a really discounted gate price. I don't have to turn up to a farmer's market with all my food and not know who's going to turn up and then have to bring it all back home again if, you know, if the weather's no good and I can, I can add it alongside other things that I'm already doing so I don't have to replace what I'm doing. It's a, I can, it's an additional channel to market and it allows me to look after and have direct relationship with a lot of customers, but very low touch. It's not like I'm taking phone calls all the time from Mary who's wanting to ask about my courgettes or whatever it is.
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A
So your system will produce them as a list of orders and who to.
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B
That's right. So the customers fulfillment. Yeah, the customer experience is just like any other e commerce experience. They, they, you know, they find the farm on, on, on their phone. They shop the way they would expect to be able to shop. They can see when their order is going to arrive. You know, if they've got any problems they can, they can let the farmer know and get credits for if something is broken or whatever. So it effectively gives that farm the sort of the firepower or the online firepower that you'd expect from say Riverford or something like that. And then from the farmer's perspective it just gives them all the information they need at the time they need it to be able to just do the hands on work to delivering it. And what also happens is that you can imagine typically like the core, our core customer type or farm type is a market garden where they're producing veg, fresh veg. And so they will produce a range of fresh veg but depending on the season will depend on how much of their rate.
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A
How big is in sort of January. It must be a bit limited, right?
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B
It's limited. But what they do is they then augment their range with food from other farms. So they might be getting eggs in, they might be getting meat in, they might be getting other, other crops in that they're not doing themselves from a variety from farms around them as well as I will be working with some wholesalers to make sure that they don't run out of a decent selection. And so effectively what they're doing is they're kind of stacking their business model. They're being a farmer, they're being a producer, they're being paid the full retail price for their own food, but they're also becoming a conduit for other food in their local region to get out to the customers.
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A
What if doing good was the smartest business move you'll ever make? I'm James Reed, CEO of Reed. In my new book Karma Capitalism, I reveal how being a Filco, that's a company where at least 10% of shares are owned by a charitable foundation has become our business. Superpower companies like Lego, Ikea and Novo Nordisk share the same Filco identity. These businesses last longer, inspire loyalty and make a bigger impact on society. This book is part manifest manifesto, part practical guide. Karma Capitalism is available now@karmacapitalism.org Being a good business is good business. I think something really good about meeting the person who's.
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B
Right.
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A
Grown the food you're going to eat.
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B
Yeah.
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A
Knowing the person, that's something quite. I don't know, that feels quite important to me as part of the appeal of this model. I think because we're so detached, our society's become so urbanized and detached and everything's sort of sealed up in plastic in supermarkets.
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B
Good.
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A
Yeah. Quite nice when a real person arrives with a box of vegetables and says hello.
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B
Exactly. It's a real. About them with a real story. Yeah, absolutely.
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A
And your customers like that, is that.
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B
They love that. They love that. I mean, and, and that I get, I guess is, you know, the interesting thing is there's, there's a thread, you know, there's still a. It's, it's. I guess you could call it a niche, you know, now of, of customers that value that and recognize the difference between, you know, anonymous food in a supermarket with an obscured supply chain where they don't know where the foods come from, but they just trust the brand because the brand's been on the telly, versus really having an intimate understanding of where the foods come from, who grew it, how they grew it. And it's a, it's a, it's a more discerning type of customer that is buying typically from these farms and they, but they value, they just have more understanding of the, of what goes into their food and, and how important it is for the health.
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A
It's important to get the message out because the price points that we just mentioned, £20 for a box of vegetables, last two people a week is. Yeah. Is low. I mean, in a cost of living crisis, that seems to be a good deal.
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B
Exactly. I mean, if you. I think I always talk about, there's three main pillars to gaining market share. That's price, convenience and awareness. And up until recently, food bought direct from farms or at the farmers markets and so on, was sort of perceived as a premium thing. You know, premium prices, inconvenient, you have to get up and get to the farmers market. But because you really were aligned with the values, people went out of their way to do it. But, but that was a, that was a small Niche today, especially with inflation and food inflation in particular. Farm produced, delivered to your door. Food is very price competitive, especially for the value, for the quality you get. It's, it's, it's, it's, in a lot of times it's actually lower cost than you would pay for in a supermarket. Convenience is, it's on your doorstep. So now we've hit the convenience parity, we've hit pricing parity. The only missing thing is awareness. Most people just do not know that that option's available to them because that's.
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A
Why we're talking now.
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B
That's why we're talking now.
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A
Increase awareness.
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B
To increase the awareness. Because they don't have the marketing budget. Most of these farms know how to get their first hundred customers because they go to their local school and they say, can you put it on in the newsletter? They'll put pin boards up on the local shop bulletin board. They might do some letterbox drops. Then they'll get 100 customers. And now they're too busy to go and find the next hundred customers or they don't know how to reach that next hundred. They're not social media experts or anything like that. So there's this sort of threshold that is the challenge is the awareness only gets so far before abates. And that's what we're working on. So that's where we feel like we've now solved the pricing convenience problem. Now how do we make more people aware that you can actually shop direct from your local farms now you get better pricing, better product. Super convenient.
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A
That's so interesting. We had a recent guest, Sir Richard Harpin, who founded HomeServe.
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B
Yes.
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A
And he's very adept at building businesses. And his, his, his mantra was bricks, clicks and paper, as he put it. And so I mean, I asked him what does that mean? And he's a big believer in direct mail, posting things to people.
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B
Right.
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A
Because he says so little now is done that way.
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B
Yeah.
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A
But it works. So I'm thinking in this model, if these local farms were to mail their. Yeah, maybe neighborhoods make this service available through UB or direct from our shop. Yeah, that might help.
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B
It might help. I agree. I think, I think the good old letterbox drop.
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A
Yeah, I think that's very powerful for, for this, I think especially when it's sort of targeted in a way that is really helpful to people rather than. Yeah, dreaded sort of junk mail.
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B
Exactly. No, I agree, I agree.
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A
It really is. I mean, to have this, I mean, you know, you can order from a supermarket online or you can order from ubi.
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B
Exactly. Yeah.
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A
And meet the person who grew it.
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B
Yeah, well, you won't order from ubi, you order direct from that farm.
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A
Yeah.
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B
So we're just in the background.
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A
You're the platform.
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B
We're the platform in the background. Exactly.
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A
The marketplace.
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B
Yeah, exactly.
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A
What have you learned along the way, you know, to get UBI established so that it's now working, as you say, effectively and it's now a question of awareness.
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B
Yes.
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A
From the original idea, what were the sort of challenges and difficulties you face and how did you go forward? One step at a time.
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B
Right. Well, I mean, you know, the journey's been a long journey. When we started in 2000, 17 years ago, coming up to 18 years, we've had along that time quite a number of near death experiences where we've had to continually adapt to the changing circumstances. So, you know, in the beginning in 2008, we all, we did, we set up was a social network online for food growers to talk to each other. And then we realized the problem was channel to market. So then we set up this, the model where farms could effectively sell to local customers. But we would do the hands on work between the gate and the plate. We would collect the food from the farms, we would pack them into the boxes and we would deliver them to the customers and we would take our margin.
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A
So you were doing that and we.
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B
Were doing that and we built our software to facilitate our operation. And to begin with, the mood was high. You know, 2008, you know, the crisis and everything. People were like, I want access to my local food. I, I feel threatened with food security. And so it was easy. And we signed up customers quickly and we grew very quickly. We opened up, you know, hubs in other cities and it was going quite quick. But then what we found was that our, our sort of niche that had expanded in the, you know, the wake of the financial crisis started to shrink and, and people started to sort of forget and it was always, it was more about, you know, just old habits. And so we had built sort of a physical infrastructure to enable us to serve a certain number of customers. But it became harder and harder to keep those customers and to get new customers. Come on. So we really struggled for years. We struggled and we had to keep on changing our model to try to keep the revenue above the cost. Ultimately it got to 2019 and the other thing that we'd realized is that we were trying to do two things at once. We were trying to build software to make this business more efficient and stay relevant in changing times. And we were trying to run these operations where we had forklifts and cool rooms and logistics and vans breaking down in the middle of the night and we just didn't have bandwidth to do both of them well. And so it was in 2019 that I actually moved from down under here to the uk. My wife's from the uk. And that's when we completely shifted our model and we said, right, we're letting the hard, you know, the hard logistics side go and handing those over to the local teams that are running them and we're just going to focus purely on the software. And that gave us all of our headspace just to software only and then to adapt the software to become more of a SaaS product as opposed to our own in house product. But it was built on the experience we'd had over the previous nine plus years of running that business model.
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A
And that pivot you feel was crucial to the AB current success and growth.
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B
Absolutely. It took us, it took us 10 years to get to three hubs, right. And then in the last five years it's over 150. So it completely changed, you know, the dynamics.
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A
There's an interesting lesson in that. I mean, for entrepreneurs listening. Right, what is it? I mean, don't try and do too much or pay close attention to what's working, what's not, or I got.
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B
It depends on something.
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A
You can't be good at two things. Focus on what?
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B
I don't know, what do you think?
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A
The sort of can't ride two horses. Yeah, that's true. Yeah.
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B
I mean, I don't think that there is a generic sort of lesson from. It always depends on your situation. In our, you know, in this situation is definitely the thing of, of, of putting all your focus into one thing. That definitely helped. It's also a timing thing. Like I think that what, you know often what the right strategy in the beginning is not the right strategy for midway down the path and it's not which is not the right strategy for later. And you can't take the midway strategy and apply it at the beginning. So as you go down your journey, you've got to adapt to based on where you are now, not where you were or where you want to be. You've got to say, well, where am I in this journey? And is now the right time to make that switch? And if I had, if I hadn't done what I did and made the quote unquote mistakes that I made, I wouldn't be in this unique position. I'M in now to be able to do what I can do now and what no one else can do now because they're not in this position. So that, that I think has been our sort of way of navigating through challenging times. Yeah, and the other, the other part of it is that UBI was never set. You know, the business I had before UBI was a good, easy money, lucrative business, but it did not satisfy my soul.
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A
Okay, what was it? Out of interest? Some people might not want to know.
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B
That it was, it was importing frozen pastries from Europe into Australia and selling them through all the supermarkets. So it was the other end of the spectrum. It really was centralized food and it was easy. We could grow it quickly. We had the firepower of massive manufacturers behind us. You just had to sell and the apparatus was there to just build and grow. And we made a lot of money very quickly. But I didn't have relationships with people. I had transactional arrangements with people. People were no longer important in that scenario really. And the food wasn't important. They were just widgets that we were moving. And for me personally, it was not satisfying. As an entrepreneur, I wanted to be working on something that was meaningful. And so even though UBI is probably one of the hardest ways to make money because you're dealing in very low margin industry, you're dealing in a super competitive industry, you've got to work way harder to make it work even just a little bit than, than, you know, opportunities that open up amazing gaps, for example. But it's super fulfilling because you're doing something you know is worthwhile. And because of that, when you do come up against really challenging near death experiences, there's this galvanizing element to it where it's like, we're going to keep going, we're going to find a way. And, and that's been a huge part as to how we've kind of been able to navigate the very rocky sort of terrain.
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A
Is there anything you'd wish you'd known when you started UBI that you know now that you could share with us?
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B
Interestingly, like, I, I think that I would have a lot of advantages by knowing what I know now, back when I started. But if I knew everything that I knew now, I probably wouldn't have started because the, that it has been a very challenging journey.
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A
It's been tough.
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B
It's been a lot tougher than I thought it would be.
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A
You regret starting it?
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B
I don't regret starting it, but, but I don't think that if I Knew if I, the person that I was back then wasn't as galvanized as I am now, and I don't think that he would have done it. I think the sacrifice would have been too much and he probably would have gone, yeah, I'll leave it to someone else.
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A
Right, interesting.
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B
Yeah.
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A
So. So your younger self saw it maybe as a quicker opportunity that would establish itself.
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B
My younger self was far more idealistic, had just come off the back of a very successful business ex, you know, business, yeah, business was easy. He thought he had a natural knack and that this was an exciting new thing. And, and, and it, it lined up with everything. And, and now we've got, you know, online commerce. The iPhone had just come out. This thing. In two or three years, it's going to be bigger than the supermarkets. It's going to be amazing. And we just got to play our cards right. And if, if you told him that, you know, in 15 years you're going to be at the grindstone, you'll have made good progress, but not as far as you think. And it's still going to be hard. He just said, yeah, yeah, give that a miss. I'll go, I'll go do something. Actually makes money.
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A
So just as well you didn't know that.
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B
So it's a good thing I didn't know.
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A
All right, good to see. So you're a steward owned business. Yes, ubi. And I'm curious what that actually means because I come across it a lot.
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B
And yeah, I thought you might be able to explain steward owned. We, we. So we're a for profit company, but we're purpose driven, meaning our purpose is to put small scale back at the heart of the food system, or in other words, to decentralize the food system. But we need to be very commercially sound in order to do that properly. And so we are a for profit company. But steward ownership sort of changes the nature of a for profit business model in two key ways. What it does is it recognizes that shareholders have sort of two main entitlements to their shares. They have the right to profits and they have the right to control. What steward ownership does is it decouples those two rights and it puts them into two separate buckets. And so it says, okay, the right to control needs to be given and held by the people who are driven by the purpose of why this company exists. Right. So they will have the ability to make the decisions as to the direction of the company and ensure that it's going in the direction that it was intended from the beginning and the right to rewards is held by the people who are, have invested into the company, who believe in the purpose, who are aligned with the purpose, but they don't get to control it. They don't get to say, oh, there's an opportunity, Amazon wants to buy, buy this company out. It's not, it's not aligned with our values, but we want the money. You know, they, so they don't have the voting rights.
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A
They can't do that.
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B
They can't do that. And so he basically puts the voting rights in, into the, into the stewards hands and it puts the return rights into the investor's hands. The second aspect of the return rights is that the returns are typically a capped return. So it's saying, okay, you know, there's a point at which you got enough back for the amount you put in. You just can't stay on the gravy train forever. Right. So there's a point where we've paid you your multiple that is fair and reasonable. Right. For the risk that you've put in. But at that point your returns are done and future profits are then reinvested back into the company. And the purpose for the reason for that is because we're trying to build something that is going to sustain itself for decades and decades where we can, where we're not having value extracted from the company or having influence that is not aligned with our purpose. Moving the company in a different direction.
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A
So that was very much your idea at the outset, was it? You wanted to set it up like.
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B
That as an idea. Yeah. The essence of steward ownership has been as a part of UBI from the beginning. But we discovered steward ownership as a legitimate business, as a legitimate ownership model only a few years ago, which had led by the Purpose foundation in, in Berlin in Germany. And there are a lot of steward owned companies. Like Bosch is a steward owned company. Patagonia is a steward owned company. It's a very legitimate and fast growing ownership model that purpose led founders are recognizing as a way for them to be able to do what they wanted to do without kind of mission drift.
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A
Yeah. Yeah, that's very interesting. And so you've sort of recently I understand you've, you've stepped back from being the CEO of UBI and you're now the chair.
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B
Yes.
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A
And you've started a new initiative.
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B
Yes.
- [31:55]
A
Which is called the Decent Alliance.
- [31:57]
B
Correct.
- [31:57]
A
What is the Decent alliance and why are you doing that?
- [32:00]
B
Okay, so the Decent alliance is a decentralized food alliance.
- [32:06]
A
Right.
- [32:07]
B
And UBI is the first member of the Decentralized Food Alliance. And then there are two other founding members, and that is Linked Farm in Belgium and pod, or which is an acronym for Plant on Demand in, in Spain. And all three of these members operate a very similar business model in their home markets. So the UK is our home market now and between us, we are facilitating around about 40 million euros or pounds, you know, worth of, worth of volume of trade from these farms. The, the reason we want to form an alliance is because we all have walked a very similar path where all values align, we're all purpose driven and we've all built products that serve the same outcome. But then there's like a kind of an 80% overlap in terms of what our products do, which means that we would otherwise be competitors. Like if we wanted to grow UBI further, we'd want to go international, we'd start competing with these guys in their home market. But rather than do that, it's to say, what could we do together that's way more powerful than what any of us could do on our own. By coming together, we can see how our products are very similar in a lot of regard. Our products being our platforms, our digital platforms. There's a big overlap, but there's also key overhangs. For example, our overhang is gate to plate from the farm to the household is what we really focus on. Whereas POD in Spain, they really have got a strong sort of farm to schools or farm to hospitals, you know, the procurement side. And then Linked Farm have got a quite a good system for sort of farm to, you know, local distributor to schools and hospitals to homes as well. So between us, we've got quite a broad capability set that can adapt to whatever the models within our markets are. So it means that we can do things like maybe use each other's products in our home markets and therefore help to galvanize and build out decentralized food within our home markets. But critically, and I think most importantly, what it means is that we all bring our strength of our expertise and so forth to the table where we can start to work on designing a completely new tech stack, a completely new digital product that's built AI first, that's built on decentralized web technology that is far more future ready and future proof than any of the products that we've built to date. So we use, we've used, we've been building for nearly 15 years now. So parts of our software, even though we've upgraded and so forth, is based on decisions we made 15 years ago. We can now bring our expertise and those of the other alliance members together and have a discrete engineering team build a new product or new technology very quickly. That means that we can then if we choose to, we can migrate all of our users onto this new common technology.
- [35:38]
A
All of your users being the customers.
- [35:40]
B
Of Uber and the customers and so on, of which there's, you know, between us there's 40, 50, 60,000 users. And that's just the first.
- [35:48]
A
And what's the advantage of doing that? Having it all on one stack?
- [35:50]
B
The advantage of doing that is we don't, we're not all running separate platforms. Right, right. That have all got a legacy technical debt that is naturally accrues over time. So we are able to move on to and run on a new product that is future ready and they can, they can do things like engage with agentic commerce and the like where people are shopping through their chat GPT. So it's, it's far more future ready. It also means that each, each instance, each market that this new product is able to be deployed in gets a completely comprehensive capability set so that they're not just limited to what their product is, is quite good at, they're able to bring a very comprehensive solution to their market which then expands the, you know, the, the, the, the decentralized food economy within their markets.
- [36:42]
A
So how do people find decent.
- [36:44]
B
Decentalliance.com right.
- [36:46]
A
Decentalliance.com yes. And, and who are you looking to contact you at the moment? I mean, who are you looking for? Farmers or.
- [36:51]
B
Yeah, looking for other platform members. So digital platforms that are serving decentralized food within their markets, that's our sort of our primary target.
- [37:03]
A
So you want them all to come in your direction?
- [37:04]
B
We're wanting to, we're wanting to talk to them all. We want to come together and effectively do a collaborative or cooperative type of new venture that we can all benefit from.
- [37:13]
A
So is this an attempt to get the scale that will bring you the awareness you need?
- [37:17]
B
Exactly, exactly. And it will get the scale for awareness also it'll get the economies of scale that are needed in order to be able to compete in this future in terms of the digital economies of scale. And also what it does is it means that we are able to coordinate a lot of these otherwise very fragmented individual small scale food businesses into a coordinated swarm that can together deliver a much better product, a much better service than they could eat individually on their own.
- [37:52]
A
Right?
- [37:53]
B
Yeah.
- [37:53]
A
Right. So this is still quite early days.
- [37:55]
B
It's, it's still early days. It's only three Months old. But we're already, we're already, it's moving quickly.
- [38:01]
A
So you know, this new decent.
- [38:04]
B
Yes.
- [38:05]
A
Platform which aggregates these other UBI and others.
- [38:09]
B
Yeah.
- [38:10]
A
And gives it scale. I mean, is this something that's hard to build? I mean it sounds technically quite potentially complex.
- [38:16]
B
What's been hard is figuring out how the software needs to work in order to really facilitate decentralized food. And that's been close to 20 year process. Now that we know what really works and what doesn't and how it works, building is not hard. Building is actually relatively simple, especially when you're building it on new technology. With the rapid productivity gains that AI is doing with people who know what they're doing rather than thinking what they know and then discovering later they don't. We know what we're doing now. We think, you know, I believe we can build a new tech stack from scratch that will reach feature parity with all the other combined platforms that are part of the alliance within 12 to 18 months. And from there it will be way more extensible at a way lower cost. So it'll be future ready. So the customer experience, when they move on to this will be a huge upgrade. Right. And it'll be agentic commerce ready. And what that means is that, you know, ChatGPT just recently released their first agentic commerce agent which effectively does your shopping for you. So what we're moving from is an attention economy where everything in business is all about getting people's attention to affect their shopping behaviors with these short, sharp little nuggets that attract their attention so that they'll then buy their product. We're about to move into the intention economy where people will no longer make buying decisions. They will set their intention into the agent with a prompt. This is what I want. I want food for my kids. This is what they eat, this is what they don't like. I want it to be as natural and fresh and fair and as local as possible. You know, it's got, this is my budget, this is what I'm allergic to, this is what my husband, you know, likes to eat, blah, blah, blah, blah, blah, whatever it is. And it goes and does the shopping and so it doesn't listen, it doesn't watch the telly, it doesn't look at ads, it goes and looks into the deep data for what based on the intent that you give it to it. So reading all the food labels exactly in, in detail.
- [40:43]
A
Yeah.
- [40:44]
B
It will read reams and reams of data on a product that a customer would read luckily, three lines. Right. And make. So it's, it's making much more informed decisions. And so marketing is dead. We will not, there will not be marketing in 10 years.
- [41:03]
A
Marketing is dead.
- [41:04]
B
Marketing is dead. Advertising is dead in 10 years. Yeah, that's a very bold statement. I think it, I think it's not bold enough. I think it's going to be bold enough. I think it's going to be sooner than that. But in 10 years, advertising, billboards, all this stuff that catches our attention so that we can make these like.
- [41:23]
A
Read my book.
- [41:23]
B
Yeah, exactly. They're going to be, they're going. It's, it's, it's, they're going to be largely obsolete.
- [41:29]
A
But how do you get a new idea across to anyone then, you know, if they've only got just streamlined into.
- [41:34]
B
In terms of, in terms of consumer products. In terms of consumer products, I think the ideas are going to get across to people are going to be conceptual ideas. They're not going to be, you know, this is my product type of idea. Your, your people will, will set what they want based on the conversations they have. And, and the agents are going to find the products that fit your intent.
- [41:57]
A
But you know, if Hyundai have produced amazing new model car, how am I going to find out about it? They don't.
- [42:02]
B
Because, because you'll, you'll, you'll, you'll have your intent in there. I mean, it's not going to be, you're still going to be human, no doubt. And you're still going to have, you're still going to have your, you're still going to have, you know, the things that catch your eye and, you know, tickle your fancy. But as a, as a, a means of, of governing and influencing consumer behavior, purchasing patterns and so forth, the, the, the, the cost of doing that versus the, versus the, because of the, the way that decisions are being made differently is not going to be worth it. The amount of money that's poured into advertising at the moment in order to affect that behavior won't be justifiable.
- [42:51]
A
Right. Advertising is dead.
- [42:53]
B
Advertising is dead.
- [42:54]
A
Five to 10 years. Yeah. There's a huge amount going on in this space.
- [42:58]
B
Yep.
- [43:00]
A
Do you feel optimistic or do you think that, you know, these great industrial process food producers are going to win? I mean, it feels a bit David v. Goliath.
- [43:12]
B
Oh, totally.
- [43:12]
A
I mean, yeah, but David won, didn't he? How are you going to do that?
- [43:18]
B
Yeah, I'm optimistic. I think I've been cursed with optimism.
- [43:21]
A
You know, first or blessed.
- [43:23]
B
Well, you know, I I think you have to be optimistic. You have to be. So that's kind of like, that's a ticket into the game, is you got to believe that we can do it against all the odds. But I do think that actually we're moving into a different paradigm. Like we're right right now, you smack in the middle of a transition into a different paradigm that's more consequential and, and of greater scale than moving from pre Internet to post Internet. This AI era is so significantly larger than we can comprehend and it's so fast and it's so vast and it will upend industries more so than the Internet has. I mean, the Internet was so disruptive. You look at Yellow Pages before and after the Internet. You look at some of those massive incumbents before and after the Internet, pre and post AI as the dominant technical infrastructure of for humanity again, completely will invert everything. And I believe that with the right approach, with the right expertise and strategy, that food systems can revert to the mean 10,000 years of being decentralized. Eighty years, less than 1% of that time in having a centralized experiment, which of which many things have gone wrong in that time. Diet, society, ecosystems have all been punished in the last 80 years by centralizing food. If we can play our cards right, we can re decentralize the food system and have another 10,000 years of resilience and ecologically sound and socially sound food systems. So I don't think we've got Lindy effect on our side. All right. I don't think it's impossible, but it definitely takes the effect.
- [45:21]
A
Explain.
- [45:22]
B
Well, the Lindy effect is what has. What has been around for a long time is likely to be around for a long time.
- [45:27]
A
Oh, I see.
- [45:28]
B
So chairs are very Lindy.
- [45:30]
A
Right?
- [45:31]
B
Right.
- [45:32]
A
What's the origin?
- [45:32]
B
And a table is a very. I don't know, but if you Google it up or chat GPT Lindy effect, you'll. You'll understand.
- [45:40]
A
You'll find something that's been around a long time. Likely to be around for a long time.
- [45:43]
B
Exactly. Exactly. And something that's been around for a short time is likely only to be around for a short time. The probability is higher that will only be around for a short time. Interesting. Centralized food systems have been around for less than 1% of the agricultural era, and it's quite possible that they won't be around for more than 1%.
- [46:03]
A
So if you can, if you can use AI to connect consumers with producers in new ways, you could reverse it and take it back to decentralized that's.
- [46:14]
B
The sort of, that's the idea.
- [46:15]
A
The idea, essentially.
- [46:17]
B
Essentially.
- [46:17]
A
But I mean, you're in support of what you're saying. Yes, I mean, locally produced, especially organic food tastes way better.
- [46:24]
B
Tastes way better.
- [46:26]
A
The whole experience of eating should be enjoyable.
- [46:28]
B
Yeah.
- [46:29]
A
And it tastes way better.
- [46:30]
B
And the reason it tastes way better is because it's fresher.
- [46:33]
A
Yes.
- [46:33]
B
Right. Because it was harvested only a few hours before you, you've got it on your plate and it like that's your biggest determining factor of flavor is freshness.
- [46:42]
A
Yeah, I know. The vegetables we grow at home in the garden taste so much better than the ones that I buy in the supermarket.
- [46:47]
B
Yeah. And, and the vegetables you've grown at home in the garden haven't been engineered to survive a long supply chain. They don't, they're not wrapped in all this ridiculous packaging.
- [46:57]
A
I don't like the plastic and all that.
- [46:58]
B
No, no. I mean, you think about it. What this solves is it solves, it solves all the inputs into food like preservatives and all those things that are designed for supply chain. It solves all the packaging. Right. It solves all that supply chain cost. If you buy a, you know, a product Today, less than 20 of what you spend, let's say you pay a pound less than 20p is food. You're paying 80p for supply chain.
- [47:30]
A
Really?
- [47:30]
B
Like what's, you know, I mean, there.
- [47:32]
A
Are foods you can't, I mean you can't get, you know, the farm in deal can't produce like bananas and things.
- [47:36]
B
Well that's true, that's true. But there are, but there are small scale independent banana farms that are part of a decentralized food system.
- [47:45]
A
Right.
- [47:45]
B
And that you can move food via a, you know, via a sort of a honeycomb effect. You know, like we're not saying that you shouldn't buy food or eat food that's outside of a certain period, certain, you know, circumference or diameter from your, or radius from your home. We're saying that the food you can access, food that is fresher, more honest. It's, it's more fair. Right. You couldn't 10, 20 years ago. You can again now. Right. And, and you can. And it's from, and it's direct or as direct as possible from the farms. And the farms are being paid fairly. And, and you get, that's a really key point.
- [48:27]
A
I mean you couldn't do this 10, 20 years ago, but you can now.
- [48:30]
B
You can now.
- [48:32]
A
And, and being aware that you can.
- [48:34]
B
Exactly.
- [48:34]
A
Important first step and knowing some of the places you can go and look. Exactly. Yeah. Isn't necessary too. So anyone listening, who wants some nice vegetables, go have a look at ubi. So when you go there, you put in your postcode and it tells you who the local farm.
- [48:49]
B
Yeah, yeah, I think the. If you go to ubi.org yeah. It'll take you straight to the find your local food page.
- [48:56]
A
Right?
- [48:57]
B
Or you go to ubi.com and click on the link at the top of the page and it'll take you to your find your local food page. You put your postcode in and it will tell you which is your closest farm on online farm or food hub. Sometimes they're like a community food hub that represents a number of farms. It'll tell you the closest one. It'll tell you whether you're within the delivery zone or if you're not, whether how far away the nearest pickup point is. And that's how you can engage. And then you deal with them. You pay them your money and they deliver you the food.
- [49:29]
A
And they're duty bound to deliver the food. I suppose if they don't deliver it, you can complain to ubi.
- [49:34]
B
You can, you can.
- [49:35]
A
Do you get many complaints?
- [49:36]
B
Well, people, they're very rarely, very rarely, but because it goes through stripe stripe have got all their processes in place. So you'll have some people say, I didn't get my food or it was terrible. And I'll, you know, they'll say, okay, I want to reverse that transaction. It's very safe. Yes, all right, it's very safe. But honestly, we, we have, you know, there are 40 to 50,000 transactions happening at the moment a month and most months we got no reports of any reverse transactions. Very good.
- [50:10]
A
So very high rates of satisfaction.
- [50:12]
B
Yeah, definitely. And because they're dealing with a small scale business who values that customer enormously. If you think of a, if you think of like a business that's got a hundred thousand customers, okay, how important is one customer compared to a business that's got 100 customers? That one customer is right face to.
- [50:32]
A
Face as well, increasingly in your way, as opposed to anonymous.
- [50:35]
B
Exactly. Yeah, exactly. Yeah.
- [50:38]
A
So and then if you're a producer or a farm shop, you go to.
- [50:41]
B
Ubi.Com go to ubi.com and then you can just, you know, click to book a demo. One of our team will get in touch, show you how it all works and you know and learn about your farm, your situation so they can give you the right sort of guidance and then you can be up and running within. Within a matter of weeks with your own online farm shop running and, and ready to take payments and customers.
- [51:06]
A
Yeah, well, that's very exciting too. So, yeah, I hope you'll get many more visits.
- [51:10]
B
Thank you.
- [51:11]
A
Deservedly. So is there any, anything else sort of big picture around the food industry that you want to sort of point out or. I mean, it seems to be quite a hot topic at the moment.
- [51:24]
B
Yeah, yeah. I mean, I think, you know, there is a fair bit of awareness coming now around farmers and how critical farmers are too.
- [51:32]
A
Yeah, I mean, I've had a tough time in Britain anyway.
- [51:34]
B
Exactly. And, and elsewhere. So just to reinforce that message is, you know, the farm, our farmers are the people who we rely on three times a day, probably the people we rely on more than anyone else. And so realizing the choices we make are either serving or harming those guys when we, when we make our, you know, purchase choices.
- [52:00]
A
Yes.
- [52:01]
B
So just being aware of that and also just being aware that there are options now that you didn't know existed. You might be blindly thinking, well, I would love, of course, I'd love to buy fruit from my local farm, but. But I don't have time and I got to go to the supermarket and I'll just go to the super. Because I assume I can't get that, but you can. And I think that's. There's a lot of. The demand for this type of food is way greater than how much people are actually accessing it. Like, you can't measure demand by supply. People want it, but they'll get what they, what they.
- [52:38]
A
How do you know they want it if they can't measure it?
- [52:40]
B
Because what, what I mean is if you, okay, if you, if you ask 100 people, you know, would you rather eat, you know, this broccoli that's grown in this local farm organically delivered to your door, or would you rather eat this broccoli here that's grown in a big, you know, farm, mass produced, you know, conventionally grown farm, wrapped in some. Wrapped in plastic that, that could have. How many people are going to pick that one? No one. Like, we know everyone wants this one, but they don't think they have the option for that.
- [53:09]
A
That.
- [53:10]
B
So they'll, they'll get that. But that doesn't tell us that, that they don't want that.
- [53:15]
A
No.
- [53:16]
B
And it's. So, it's more of a we. What we've got is an invisibility cloak that we need to lift and with the visibility, people will change their minds.
- [53:25]
A
But You've also got a big logistical challenge, you know, in the center of a big city like London, if we all want the fresh broccoli true delivered. Yeah, that's not going to happen.
- [53:34]
B
That is true. And. Yeah. And interestingly, most of the delivery footprint of the, the farms and the home delivery on UBI is distributed throughout rural areas.
- [53:46]
A
I saw that.
- [53:47]
B
Yeah. So, you know, there are some that will come into London, but if you think about it, it's the, it's the, it's the sort of more rural towns and villages that lack the type of, you know, purchase opportunities that you guys have got in the city and that have the relationships. I understand the nature of their, of the producers more because they live closer. So. Yeah, ironically. Well, not ironically, but, you know, that is one of the things that this model does. It really helps to stimulate rural economies, which is good.
- [54:19]
A
But I mean, there's little point driving into the center of London to deliver a vegetable box £20 when you get hit by a congestion charge. Right. You know, you're not going to make a return. Yeah. So, you know, that's going to be much more. But I think it does support the rural economies, which is important.
- [54:32]
B
It does. And I mean, I do think that there is, I think that we can, we can serve the cities. And I just feel like we. It's a matter of building up the critical mass where it becomes viable to really serve the cities well.
- [54:46]
A
So you haven't given up on that?
- [54:48]
B
No, no, I think the cities are definitely the big gay be. London is a big gaping mouth of England, you know, and, and there are ways that we can, we can really do that. But we, we're coming at it from the outside.
- [55:01]
A
So slowly, slowly, slowly, slowly. Oh, good luck. Good luck with that. Fantastic. Well, I wish you continued success. I always ask two questions at the end of my conversations, which I ask everybody. I'm gonna ask them. View. Now, Pete. The first is because at Reed, we love Mondays. Yeah. The first is what gets you up on a Monday morning.
- [55:22]
B
A new puppy.
- [55:23]
A
You got a new puppy?
- [55:24]
B
Got a new puppy. Got a new puppy.
- [55:26]
A
What sort of dog?
- [55:27]
B
It's a little Cavador. So it's a, it's a small Labrador with a, with a King Charles spaniel. It's absolutely gorgeous.
- [55:33]
A
Cavador.
- [55:34]
B
Yeah, yeah. So getting, getting up.
- [55:37]
A
And what's the Cavador called?
- [55:39]
B
Suki.
- [55:39]
A
Suki. Very good.
- [55:41]
B
Yes. So that's what gets me up on a Monday morning now. Right, yeah.
- [55:45]
A
Well, I hope that all goes well.
- [55:47]
B
Thank you.
- [55:47]
A
And the last question is where do you see yourself in five years time, man?
- [55:53]
B
It's like there are so many, there are so many potentials. Well, ideally where I see myself in 5 years time is on a small scale farm, growing some crops, having a few animals and being able to live that life, you know, I, it's a hard life and I know because I deal with them all every day, you know, but it's also just a very fulfilling life. And I grew up on a small, you know, small holding. I love that lifestyle and I think that, you know, as long as my kids can chip in and help out, I think it could be a good one.
- [56:30]
A
Again, they'll need a good work ethic to work on a farm. They'll get up early with their dad.
- [56:36]
B
But there's a good business model that we can employ.
- [56:38]
A
Yeah, or you've got, you'll have UBI to sell. So you want to become a customer.
- [56:42]
B
Exactly. I want to become a customer.
- [56:43]
A
Oh, good luck with that. I wish you all the very best. Thanks. Thanks for coming all this way to talk to me. It's been a real pleasure.
- [56:48]
B
It's a real pleasure, James, thank you very much.
- [56:49]
A
Thank you very much, Pete.
- [56:50]
B
Cheers.
- [56:51]
A
Pete, thank you for joining me on All About Business. I'm your host, James Reid, chairman and CEO of Reed, a family run recruitment and philanthropy company. If you'd like to learn more about Reid, Pete's work or ubi, you'll find all the links in the show notes. See you next time.