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Match made in Devon
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If you were trying to sum up Gregory Distribution in a single word, it would be...`brown' I suppose. It's not every company that chooses a rich chocolate hue with yellow writing as its livery, but it seems to have served Gregory well, creating a distinctive marker on crowded roads. The colour scheme, as with much about the business,seems to date from an earlier age. That's not to say the 86-year-old business is old fashioned: more that it is traditional in its outlook which,as current MD Andy Walker explains, is no bad thing.
The firm believes sustainable business springs from deep local roots. Walker explains that its whole strategy is "about traffic in and out of the SW". This, ie says, has enabled the firm to win an array of blue-chip clients such as Cadbury, Coca Cola and Masterfoods. He adds: -Increasingly, what's happened over the last five to six years is that the major manufacturers have looked for regional partners rather than one national firm to handle their distribution.
"So our regional strategy has paid dividends — it has enabled us to develop traffic flows away from the region for smaller, local firms and bring loads of finished goods back in from the blue-chips," he says.
"Our strategy has never been to tramp around the country to get ad hoc work: we are always trying to create balanced traffic flows.
-Our core area remains in the South West."
The firm started in NorthTawton, the agricultural heartland of Devon, serving farms across the region. Perhaps surprisingly then, it wasn't until relatively recently that it began undertaking milk transport.
Despite no previous experience in the sector Gregory Distribution diversified in the mid1990s and now collects and consolidates the milk from more than 2,000 farms across the South West for farmers' co-op Milk Link. Walker explains the decision to head down this milky way: "We identified the sector in 1994 or 1995 when the old Milk Marketing Board was broken up. We thought we had a good knowledge of the South West and that our skills in distribution and logistics could transfer to this non-traditional market."
Rationalised business
Starting initially with two depots it then acquired another two from Wincanton, before it rationalised the business, closed depots and consolidated the operation and made other changes such as the introduction of doubleshifting."It's a continuous process of evolution — there's constant pressure [on price] in the dairy industry,"Walker adds.
There's also the recent diversification into the waste haulage sector. The acquisition of local rival Greendale Transport and a contract win with South West Water prompted the launch of its new division Gregory Environmental (CM 7 April).
Once again Walker says it saw the waste sector as an opportunity for expansion: "It comes back to the theme of diversifying core skills. We had an approach last year asking whether there was any interest [in Greendale]. We saw there was a market niche in recycled paper and plastic. It's a growth area as all local councils have to hit recycling targets. We saw it as an opportunity to diversify and the fact that it was in the South West was another bonus as well." As, we assume, was Greendale's brown livery.
Of course, when you are constantly trying your hand at new things there is the chance of the occasional failure. -Not everything works." admits Walker. "Although we give it our best effort, there's always a risk. This industry is incredibly capital intensive: for every £1 we make in turnover there's another £1 that goes back in to the company."
Clearly the firm has expanded from its South West base. in part due to customer demand. For example, handling the distribution in the southern half of the country for Cadbury meant a site was opened in Minworth in the West Midlands. But, says Walker, there's no great desire to become a national player.This despite an isolated foray into Scotland, after taking over a contract from disqualified Twynholm firm Hayton Coulthard. "Well, it is South West Scotland," he says half-jokingly.
He sees its position in the South West as a microcosm of a firm like Wincanton."Because of the services and diversity we offer it's like a small version of one of the big players."
Despite this Walker remains conspicuously modest about the firm's presence in Devon and Cornwall.1 don't think we are dominating the South West — we know there's always competitors out there seeking opportunities and if we allow ourselves to think that we are dominating a particular corner of the industry then I think that's when complacency sets in.
"We are undoubtedly the biggest private operator in the South West, but we'll leave that for others to say."
In which case we'll let the numbers speak for themselves — it has 1,100 employees, of which over 650 are drivers, and last year saw it make a £2m profit on turnover of £63m: this year turn over looks to be in the £70m region. Despite this it seems to retain a paternal instinct towards its employees. -There are a lot of people who rely on the decisions that we make for their livelihoods, It's a big responsibility. We know that we wouldn't be where we are without the employees who rely on us for their living — it's very important in a privately owned firm."
In 1992 when Walker joined the firm it was working on a margin of 14%, these days it hovers around the industry average of 3% according to its 2003 figures, although it aims to raise that to 5%.
-What's the choice though? We talk to suppliers and they are getting pressure from the supermarkets on price and they look to us to make more efficiencies in our operation.That's the key to getting your margin up — efficiency. keeping that expensive vehicle asset moving,' he says.
Slim pickings
Despite the sometimes slim pickings in road haulage, Walker remains upbeat. "I've been in transport my whole career—when it's good, it's very good and on the other hand..." he winces "There's lots of things I enjoy about it; managing people, which is challenging but interesting: and there's the buzz you get when you are delivering a distribution contract and doing it welt The only thing in the industry that's constant is change — if you are a person who thrives on that then you are always getting a new buzz from the constant challenges.
So what is the next challenge for Gregory? "To make that 5 %," he deadpans •