Oddbox ready to grow again after cost of living crisis bites

The business offers doorstep delivery of packages filled with oddly-shaped or surplus seasonal produce that would otherwise have gone to waste — and the company’s profits have recently looked as wonky as its rescued carrots.

Oddbox boomed during the Covid lockdowns and the post-pandemic surge in home working, with revenues soaring from just over £3 million in 2019 to £32.2 million in the year to July 2022 as subscriptions poured in. Despite investing in expanding operations, the company reported a £539,000 profit in 2021.

However, Oddbox has since been hit hard by the squeeze on family finances and the trend towards returning to offices, which has resulted in a decline in the number of meals cooked at home. Inflation has also taken a bite. Its latest accounts show sales fell by £2.5 million to £29.7 million in the year to July 2023, with pre-tax losses of £3.7 million.

Vanpoperinghe, 43, largely attributes the fall in revenues to Oddbox stopping marketing to acquire new customers. This move was part of a pivot to cut costs and focus on profitability, as urged by the company’s investors. Oddbox recently laid off over 40 people from its previously 100-strong team as it restructured operations. “That was not something we thought we would ever have to do. We thought we had been quite prudent in terms of hiring, so it was quite an emotional journey,” Vanpoperinghe said.

Demand for the firm’s delivery boxes of wonky fruit and veg exploded during the lockdowns

“We went into the cost of living crisis and everybody started reconsidering their spend, and especially their subscriptions, so we saw a lot more churn than what we were predicting … It was quite challenging because we didn’t expect the Ukraine war to accelerate the post-Covid effect so quickly.

“We had built a team that was too big on the basis that things would continue and stabilise at a higher level, and the whole investment market shut down … Suddenly it shifted from ‘growth at all costs’ to [a demand for] ‘profitability’ — and that’s a huge shift for a business.

“We had to cut overheads, we had to re-look at all our supply chain costs, we had to reduce marketing spend and be a lot more efficient on how we acquire customers — and we also focused on what we could do to evolve our proposition to ensure customers are staying longer.”

The entrepreneur is optimistic for the future. Oddbox now employs 60 people and has outsourced packing and delivery to two partner companies. Vanpoperinghe said the company expects to be “very close to break even in 2024”. She also believes Oddbox can ride a wave of new trends, including the focus on gut health, and cooking from scratch to avoid ultra processed foods.

Against a continued backdrop of restricted consumer spending, the founders are looking to update Oddbox’s offering and launch new products to grow sales.

Millions of tonnes of food goes to waste in Britain each year

Plans include offering customers the option to personalise their boxes through swapping out produce they won’t use, because ending up wasting their rescued food is the “main reason” customers give for ending Oddbox subscriptions, Vanpoperinghe said.

Early rollout of customisable boxes has already “shown customers are staying with Oddbox for longer”. The team is also launching new cooking pastes made from wonky fruit and veg to cater to a back-to-the-office economy, and is in discussions with retailers to explore wider sales. Following successful trials, Oddbox will also give customers the chance to add other non-veg “rescued” items into their boxes from 2025.

“Now we’re in a better place and team engagement is really strong,” Vanpoperinghe said, adding that the founders have learned that complete financial transparency with employees has helped restore trust.

“The online grocery market is still predicted to continue to grow,” she said. “And we’re still continuing to grow, but at a pace which is a bit slower.”

Origin story: Ditching desk jobs on an Oddbox mission to save 90,000 tonnes of fresh food

The UK produces the largest amount of food waste in Europe, with around 9.5 million tonnes of edible produce squandered annually. About 50 per cent of food waste happens in homes, 30 per cent on farms and 20 per cent in the supply chain, with anywhere between 5-30 per cent of a supplier’s crop likely not to meet supermarket specifications, Vanpoperinghe said.

She grew up in northern France with grandparents who were potato farmers. She ate vegetables from the garden and “knew what it takes” to grow a single crop. One day, while researching supply chains in a bid to understand why strawberries and tomatoes in the UK were so “disappointing” compared with those in Europe, she discovered the extent of food waste in Britain.

“That’s when I realised that 40 per cent of the food we produce is never consumed, which for me was shocking because there are a lot of people who can’t afford to eat,” she said. “I thought: ‘there has to be something that we can do about it’.”

Vanpoperinghe had previously worked in finance and the charity sector, while her husband, Deepak Ravindran, 44, was a former consultant at Deutsche Bank. Through launching Oddbox, the couple hoped to both rescue produce and raise awareness about food waste in supply chains.

The couple started the business as a sideline using their personal savings and bootstrapped it for two years. They initially partnered with wholesalers in New Covent Garden Market, spending Friday nights packing boxes before driving around south London making deliveries every Saturday.

“Initially I was cold-calling farmers,” Vanpoperinghe said. “We had a small warehouse that we were sharing with two businesses, and some students who would come for a few hours to help us pack.”

By early 2018 Oddbox had about 500 subscribers and was “starting to get traction”. By early 2020, the couple had partnered with an external warehousing company and were buying surplus produce directly from producers. At this point, they realised it would be difficult to scale without raising external capital. Oddbox has since raised £26 million, including over £6 million from supporters on Seedrs, a crowdfunding platform. The couple retain a controlling stake.

Support from contacts and investors proved useful as Oddbox faced an explosion in demand in lockdown. Orders soared from 8,000 boxes a week in March 2020 to 30,000 boxes by June 2020. They reached 50,000 weekly box deliveries in 2022, before the cost of living crisis struck.

Through all the ups and downs of their business journey, Vanpoperinghe said having her husband as co-founder has been invaluable. She said: “If you think back 50 years, most businesses were family businesses, and what’s really important between co-founders is that trust. We’ve been together a long time, so there’s a lot of trust and support.”