Tomas Mesa is Co-founder of London-based healthy snacking brand Freed Foods, which Panoramic backed in June 2019. Freed Foods operates across Europe and Tomas shares his unique insight into the challenges of Brexit and supply chains along with some of the drivers of the healthy snacking market and the outlook for the year ahead.
What’s the key to successfully operating across Europe?
Operating across Europe requires the flexibility to adapt to the many differences in regulation, culture, and ways of working. Forging relationships and having strong local partners that you can trust is very important. We benefit from speaking several languages which is also a real advantage as language can be a barrier for businesses succeeding abroad.
How did Brexit impact your business and how did you overcome any issues faced?
Brexit caused many issues. The main one being increased costs due to more documentation and scarcity of truck drivers which had a big impact at certain times. We also experienced increased inefficiency where trucks couldn’t be booked. It is sometimes difficult to know how much is covid and how much is Brexit but warehousing cost and demand has also increased greatly.
The situation is not really getting better, a new run of checks started in Jan 2022, exporting is harder than importing, with more tightening expected in the Autumn. For intra-European businesses we set up an Irish subsidiary, which has improved things, we looked at a few locations and Ireland was the easiest from both an administrative and cost perspective.
The only benefit we can see Is that competition who don’t have the same level of expertise or resource may struggle to export. Overcoming the issue faced in the past 18 months was more down to resilience and persistence than anything else.
How have you dealt with supply chain issues?
We have tried to build as many plan B’s and as much diversity into supply chain as possible. The supply chain crises is global and has been impossible to avoid. For instance, we use a type of naturally blue-coloured corn which had a poor harvest and couldn’t be procured from Europe. We found some in the US but were then severely hampered by the container crisis where importing from the US had a big back log, so took several months to receive this ingredient. Thankfully we were able to supply other products to customers during this time and increase supply where others were unable to because of shortages the competition were also facing.
To what extent are you experiencing inflation, and is it short term?
We are seeing inflation across the board. The basic purchasing costs for raw materials has increased at around 8%. We don’t expect year-on-year increases to continue so believe it to be a medium-term problem at this stage, although I don’t think prices will go back down either.
Are these Europe wide issue or mainly UK focused?
Worldwide. I wouldn’t say any worse or better in the UK – it is a similar picture across Europe and even some of the other jurisdictions we supply, for instance in the middle and far east.
What are your main goals for the year ahead?
Keep growing. The business has tripled in size over the last few years, and we are targeting a growth rate of above 50% in the current year. We have won distribution with Tesco and Co-op recently and our business in Germany is also performing well so we are optimistic for the year ahead.
What are the latest trends in the snacking industry?
The Healthier / better for you trends continues to be strong, and there has been a lot of snacking brands consolidation in the market during the pandemic from the acquisitions of competitors such as Eat Real and Propercorn in the past 18 months. We believe this consolidation will continue as big corporates seek modern and vibrant brands.
To find out more about Mister Freed visit their website