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Q&A: Why Prince Charles and Madonna love the £15m Planet Organic

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Founder Renée Elliott on building Britain’s largest organic supermarket

Planet Organic’s opening days saw trading levels that even its founder, Renée Elliot, doesn’t shy away from branding as “dreadful”. No rose-tinted spectacles here.

Sales were so scarce for Planet Organic in the first few months that the whole operation nearly wound up before it got started. “I think back and think good lord – we’ve come a long way!” she chuckles.

Launched in 1995, the business spent many months floundering at the starting gate. Come 1996 and the BSE food scare got people thinking about what they were munching and looked to Organic Planet. In 1997, Organic Planet reported a £1.2m turnover followed by £2.4m the next year. Today, Elliot is sitting on a £15m firm.

Elliot had to give away chunks of equity to make sure Planet Organic could prosper, with her other investors effectively holding a controlling stake. There was even a legal battle in the early days between her and her business partner, who was the wealthier of the two and – she says – tried to wrest control of the business from her grasp.

The company’s growth is commendable given the UK’s organic food sales have been withering over the last four years. Even the US organic goliath Whole Foods has yet to make a profit since coming to the UK in 2010, with it losing £4.4m in 2012.

With Planet Organic growing, Elliot has enjoyed some major high points – like Prince Charles visiting their first shop in Westbourne Grove in 1999. She walked the Prince around the store for 45 minutes and even managed to sell him a jar of olives. Other celebrity fans include Madonna, Gwyneth Paltrow and Claudia Schiffer.

I caught up with Elliot before she took the stage to speak on social entrepreneurship at the Ben and Jerry’s Sundae School, to find out how she built her organic retail chain from nothing and the difficulties along the way.

How did Planet Organic get started?

It started when I was working in the UK as a journalist and I realised very quickly that I really should work for myself because I hate being told what to do. I knew I had the ability to lead, I figured that out when I was 19, even though I was very shy girl…!

After working in England, I went to America on a leadership course and while I was there I started looking around a Whole Foods store, and I thought ‘ooh it’s different and not conventional and its food which I love’.

I went back to Boston to see my family and my sister said if you’re thinking of opening a Whole Foods store, go and see Bread and Circus, an organic store. I had never seen anything like it!

In America, the supermarkets are really downmarket. You don’t have the Waitrose quality outlets, they’re pretty gross actually.  However, I walked into this organic supermarket and couldn’t believe it and I took the idea from there.

I came back to the UK and got a job in the largest Whole Foods store that existed at the time, and then worked there for a couple of years, got experience and realised that I was going to love this and then left to set up Planet Organic. This was in the fall of 1994.

Was it easy to set up Planet Organic?

The truth is I was very naive. I knew how to run a shop but that had got nothing to do with running a business.

I took a leadership course that actually taught me what a P&L statement was, I didn’t know how to write a business plan which was critical or how to go about getting investment. That was the starting point.

After writing the business plan, I then started the process of putting together a professional team in order to raise the finance. Because the concept was so brand new, it was going to have to be private investment because no one would touch it. I couldn’t really get people to understand the concept.

I remember talking to someone about it and they said ‘Oh it’s like a really big Holland & Barrett?’ And I said ‘Nooo…it has fruit and veg and so much more!”

I had a business partner at the time and it was his father’s contacts from whom we raised the money.

How did you feel about giving up equity?

We gave up equity and became ordinary shareholders.

We had a handful of investors, my best girlfriend and an organic farmer who we met at a conference invested in the business. It was a bit of a hodge-podge of people.

When we got to building the first shop, we couldn’t pay the architect who was a friend of my husband’s so he took shares in my business.

Basically we didn’t know what we were doing! I didn’t know what I was doing, we just took one step at a time until the products were on the shelves and from there, we started learning every step of the way.

The organic industry is lovely to work in as its suppliers are really good people. The organic industry is full of people who love what they do, and hippies who say they don’t do it for the money so you’re working for a supportive network.

But for all the niceness, surely you needed sales? What was it like at the beginning?

It was awful! I come from a very average American family so I had scraped together all I had, borrowed and raised some money.

The great thing was we had gone to several banks for an overdraft and they all said no.

But Natwest said that Anita Roddick had gone to them however many years before and asked for a £5,000 loan and they said no. The bank manager I was speaking to at the time said we’re not going to make the same mistake.

We got a £50,000 overdraft from Natwest which was really needed and we set up, but it was awful. We opened in November and we didn’t do any press, because I read Anita Roddick’s book and she didn’t really believe in press and I thought I didn’t either.

Sales were dreadful so we organised this big press party, but nobody came. Fed up, we decided to hire a PR company to sell the story because we knew we had great editorial and it was a great story and we needed to let people know that we were there.

Even making payments was different. When we got a final contractor bill to pay the suppliers, it was either pay the team or pay the suppliers. It was appalling so I paid the team and the suppliers gave us extended credit.

Sales kicked into gear on 1 January 1996 but it was in February when the first big BSE scare hit that we got press on the back of our organic British meat counter and we took off. Thank god!, as at that point we had no money in the bank! All we needed was food scares to wake people up and raise consciousness of it.

In that crisis, there was an opportunity?

We took off.  I remember when we started at the time, if people understand the product and the truth about food, they’ll come shop here but how do we make that happen?

How do we do that from this not so good site on Westbourne Grove? At that time that part of the road was pretty dodgy. The food scare was just what we needed and we got press off the back of that.

How quickly did you take off?

In the first year, we did £1.2m but it came from nothing. November, December, January, we did nothing, and then we took off. In the second year we did £2.4m and it took off from there. It was meteorological growth, we were running to keep up with the business at that point!

I remember the day that we opened. All the data hadn’t downloaded onto the computer system, it was pretty shabby. We had sectioned off parts of the store with these big
plastic sheets that you couldn’t buy because it wasn’t scanning at the tills, I think back and think good lord – we’ve come a long way!

How far has Planet Organic come?

We have five stores in London at the moment and are signing a sixth in the next couple of weeks.

We’re turning over more than £15m and have about 200 employees.

Are you turning a profit?

We’re in profit this year, and in for good profits for the first time.

We’re investing in growth and there have been difficulties along the way but we’re at a very exciting time now, especially coming through the recession.

Food really struggled and organic independent sales grew because as I believe, people want organic. The supermarkets got rid of organic lines and sales across the country dropped but I don’t think it’s a reflection of what the consumer wants.We’re having our best weeks ever in business right now.

Would you ever sell Planet Orgnaic?

The sad thing is it’s not my decision as I didn’t have the money to fund Planet myself so I’ve always had investors.

As we’ve refinanced and done rights and issues over the years, I’ve tried to keep my stake up but I have a group of investors who have a controlling say in the company which I allowed to happen in order that Planet Organic could grow, so obviously they will sell and they’ll want to sell, and I’ll go along with it.

I set Planet Organic up to do something that I loved and was rewarding for me for the rest of my life. That is not the reality today.

I’ve had to change gears over the years but I’ve done that especially after having children. There was a time when I couldn’t imagine doing anything else. I thought this was my life and what else could I do? And now since then, I’ve written two books, I’d like to write more books, I have some other ideas. I’m never short of ideas.

What sort of ideas would they be for alongside and after Planet Organic?

Erm. Well there’s something I haven’t talked about and I’m not sure ready to! I feel quite shy about it.

What about a hint?

(laughs) I don’t think I’ll talk about it. There are two books I’m keen to write and I’m talking to publishers at the moment.

They’re all about my passion for food. The first would be about the best quality food that is nutritious for children. The other one is about Creole food. My Mum is from New Orleans and the history of that food came up through her family history, but I’d be bringing that food into today because no-one has time for long sauces and complicated recipes.

My whole thing as a working mother of three kids is food has to be easy, quick and incredibly nutritious and delicious.

Thank you for your time Renée!




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