Organic growth

24 April, 2009
Miller FWP Matthews has just invested £1.2m in its business, which focuses on organic and premium flours. Joint MD Paul Matthews tells Georgi Gyton why extra space and a new test bakery will fuel future growth
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Located in the heart of the Cotswold hills in the picturesque village of Shipton-under-Wychwood, specialist independent flour miller FWP Matthews has been putting its money where its mouth is.

The company is owned and run by Paul and Graham Matthews, great great grandsons of the founder Frederick William Powell Matthews, who commissioned the building of the mill, which was completed in 1912. However, the history of the company dates back as far as the 1860s, when Marmaduke Matthews started a small business selling seeds from his barn in Fifield, Oxfordshire.

The company now supplies organic, speciality and conventional flours, as well as distributing a wide range of French flours from Moul-Bie. It sources as much wheat from local suppliers as possible and local farmers still personally deliver their wheat to the mill, which currently employs around 38 people.

Despite having its feet firmly rooted in the grains of tradition, FWP has recently made a considerable investment in its mill, namely with the building of the new warehouse - The Wychwood Building - which was officially opened in February this year by HRH Princess Royal. Among the family members at the opening were the architects and builders who completed the project, as well as representatives from various local community groups, such as the local football team, the Brownies and the local theatre group, to which FWP contributes money.

Alongside the new warehouse, the company is also installing an on-site test bakery, as well as a new blending plant and £50,000 palletiser, at a total cost of around £1.2m. "We had outgrown our existing warehouse to the extent that we had a bit of warehousing we rented about a mile away," explains joint managing director Paul Matthews, who says a lack of office space had also resulted in the need for a portacabin to house three members of staff. "It took around two years to get planning permission, but we started building in January 2008 and completed in October/November."

The new building provides the firm with a flour warehousing facility and extra office space, and has also enabled them to install the test bakery, which is due to be completed soon. "It will be great for when we have customer days or are working on specific product development for individual companies," Matthews explains. "It will also be used for quality control, which will be useful for our organic works, as well as our conventional and French works."

The test bakery will also be used to bake test various wheat blends, for product development with customers at their request, principally with Moul-Bie, and for introducing customers to the French products as well as our own, he says. "The flour will come through to the new blending plant and then we can bake-test it. When we have customer or company days, we can then bake-off various products at their request and they'll be able to do a tasting panel if they like."

FWP Matthews is capable of producing around 600 tonnes of flour a week, but it is one of the smaller mills in the country - the larger being the likes of Rank Hovis, ADM and Allied Mills. As it cannot compete in terms of the volume of flour it produces, how does FWP differentiate itself? "In the last eight or nine years, we've specialised in the more premium products, such as organic, speciality French - we do around 50-60 products for Moul-Bie - and the more premium-type flours, saying that we'll provide standard flours for large bakeries as well," says Matthews.

In terms of trends, he says, value breads are definitely making a comeback, purely on the grounds of cost. "Some organic bread is actually cheaper than conventional branded loaves, but the problem we have is the perception of organic - namely, that it's expensive." Matthews believes they'll be playing a waiting game over the next couple of months to see which way consumers decide to go. The organic trade is difficult enough as it is - and more so in the current climate, he says; production has fallen dramatically, so it is difficult to know how much wheat to buy. "You've got major retailers pushing prices down, so at the moment, we're very squeezed on our organics supply," he adds.

Currency has also had an effect in terms of wheat that's imported from outside the UK, with regard to TRQs - tariff rate quotas. The wheat only comes without a levy if it's high enough in protein: if it's not 15.3% protein, a E94 (£85.35) levy is slapped on it. "Buying organic wheat is extremely fraught, as we've had two bad summers and we've hardly been able to buy any UK organic wheat this season," says Matthews.

"I believe retailers are looking to promote home-grown organic products, and we're hoping to have a good harvest this year, and that there's going to be a lot of promotion around 100% organic UK loaves."

There is only one word for why organic wheat does so badly in the UK and that's 'climate' - or rather unsuitable climate. "You can grow it, but at the end of the day, to make a loaf of bread, you need a certain amount of protein and you cannot get it by artificial means. On top of all that, you need a lot of sunlight hours between the beginning of June and the middle of July," explains Matthews. FWP has sourced organic wheat from the likes of Canada, Argentina and Eastern Europe, as well as the UK.

In terms of the recession, Matthews views it as just another challenge. "Obviously we've invested heavily in the new facility and we've just put a new flour tanker on the road," he says. "I think that, although it is tough, there will be tremendous opportunities for us. We have many advantages, not least that we are a small team - there are essentially only three or four of us that make the decisions."

Matthews believes it is being able to act on decisions quickly that has helped the success of the business. Although the family aspect of the business is important, he says that decisions have to be made for the good of the business, not the family, or that's where things start going wrong.

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=== Then and now ===

Founded by: Frederick William Powell Matthews and now run by great great grandsons Paul and Graham Matthews

History: Dates back to the 1860s, when Marmaduke Matthews started selling seeds from a barn in Oxfordshire. Mill completed in 1912

New developments: £1.2m investment, including the building of a new warehouse, The Wychwood Building, an on-site test bakery and a £50k palletiser, completed last year





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