Smart50 rank: 3
Revenue: $64,984,745
Growth: 205.87%
Founders: Shane Hodskiss, 33; Jordan Muir, 29; William Scott, 30
Based: Victoria
Employees: 80
Industry: Retail trade
Website: www.aussiefarmers.com.au
WINNER: Top Franchise
First the busy folk outsourced the cleaning, then the lawn mowing. Now they are even outsourcing the buying and delivery of milk and bread. That and a bit of a "buy Aussie" focus in the downturn has led to the success of Aussie Farmers taking third position, growing 205% to $64.9 million in 2008-09.
Shane Hodskiss, William Scott and Jordan Muir, started the business based on the simple philosophy of produce coming straight from the "farm gate to the front door".
"With our network of local milkmen, we provide quality, value, freshness and convenience, with a guarantee that all products are 100% Australian owned, made and produced," Hodskiss says
The company started in 2005 with more than $100,000 and 30 customers and in less than four years, has expanded to over 110 franchises, covering metropolitan Melbourne, Sydney and Brisbane with further expansion planned across Australia this year.
Aussie Farmers Direct works on a franchise model where franchise owners enter into an established business with an exclusive territory and initial guaranteed customer base. All aspects of the back-end management process under the one roof with customer management, billing, payments, new product development and procurement are handled by the franchisor.
To get the word out, milkmen hit the streets and present service directly to customers, with about 800 new sign-ups a week to the existing 55,000 customers.
Aussie Farmers Direct also joined forces with Aussie Helpers charity to help farmers survive the drought and money raised is devoted to tackling serious issues such as depression, suicide, family break up as well as funding the restocking of farms and providing emergency feed. "With each new customer being offered the option to donate a small amount each week, we raised $25,000 last month."
The most challenging part of starting up the business was sourcing Australian suppliers that could provide 100% Australian owned, made and produced products and meet the demand of customers.
"With the increase of foreign ownership and investment into iconic Australian brands, we needed to ensure that the suppliers could meet our specifications and requirements."
The brand's integrity continues to be a challenge today. "Today, over 95% of liquid milk that is manufactured and retailed in Australia is foreign owned," Hodskiss says.
Building a brand and customer base from day one also required a lot of hard work given the highly competitive and commoditised market.
The biggest challenge was getting three new warehouses with specific requirements in three different states over the last 12 months. "As with the warehouses, the head office of Aussie Farmers Direct has had to relocate similarly three times over the last 12 months to house the growing staff numbers," he says.
Departments including finance, marketing and the customer contact centre have all been bolstered, as the off-the-shelf CRM system was ineffective. "We had to look for more functionality within the database and this resulted is us designing and implementing a custom built CRM system that could handle the density of our customer requirements," Hodskiss says.
Most of the revenue comes through the website with an easy to use online ordering system with the ability to change the order online, confirmation emails for all order changes (irrespective of whether the order changes are made online or through the call centre), web surveys, weekly fruit and vegetable email newsletters with price information, recipes and information regarding current conditions affecting our produce, product information such as nutritional information for each products plus weekly specials.
The new online order system has resulted in smaller numbers of delivery errors as customers enter their own orders rather than submitting them through call centre operators, and a reduction in call centre wait times as customers can now change their orders online.
"We are currently in the process of developing self-service websites to provide franchisees with tools to allow them to more readily assist their customers and run their franchise," Hodskiss says. "The past year has seen a large amount of change for Aussie Farmers with the introduction of an ERP system, which has allowed us to introduce many of these new initiatives and we are constantly looking for ways to utilise technology to provide improved service to our customers."
The downturn had a positive affect on the business which is currently expanding its product range. "Our primary target market (families) are now more inclined to eat at home and to purchase fresh, high quality, affordable produce," he says. "We have added to this by providing the extra bonus of a convenient free home delivery service. As people are more disconcerting about where they are spending their money and as an organisation in an industry that is flourishing, we see this as an opportunity to further ensure value to our current and future customers." Franchise inquiries have also risen and the company plans to have 167 franchises by June 2010. At present all 120 franchises are profitable.
"In the coming year we are looking at geographical expansion, product range expansion and additional business channels."
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