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Purely Organic

What are the external influences on the business?

The agricultural sector has had to endure many crises over recent years. The Foot and Mouth outbreak in 2002 had a severe effect on almost all country-based activities and businesses. A recurrence of this crisis in 2007 may have a similar impact. Purely Organic were affected by the 2002 outbreak as demand fell and supply of food products, both into and away from the farm became difficult.

Tony Free sums up the impact of the 2002 Foot and Mouth outbreak on Purely Organic:

"The Foot and Mouth crisis in 2002 nearly bankrupted us and we had to sell our house to pay our debts. Foot and mouth affected us so dramatically because not only were Farmers' Markets cancelled for several months, no customers were coming into the farm shop."

Disputes within the organic accreditation industry also have an influence on this business. A disagreement within the Soil Association(http://www.soilassociation.org/) which accredits Purely Organic's methods, threatens to disrupt the organic food movement. The split within the Soil Association, which actually involved one of their members resigning from the organisation, centred on whether it is possible to accredit farmed salmon as organic.

Economic factors such as the value of the currency affect any business which trades internationally. As you will read under the section entitled 'What plans are there for the business to grow?' the owners are in discussions to supply new markets. Such expansion would be made less profitable if sterling's value appreciated against the value of the export market's currency. Similarly, if sterling's value fell relative to the export market's currency, Purely Organic's expansion could be more profitable. Such uncertainty makes it difficult for exporting businesses to plan for the future, as they are often unable to predict their revenues with any accuracy.

Purely Organic’s production areas have to abide by Trading Standards’ regulations. Here a member of staff displays a trout in the main processing room. Image Copyright: Biz/ed Team.

Regulation plays an important role in any business. This is especially so in a firm involved in food production. Visits from Trading Standards inspectors are to be expected and as a result of requests following such visits, Purely Organic have had to take the following action:

• Set up a strict no smoking policy, applicable throughout the entire site
• Improve the production areas of the farm, building new partition walling in the some sections to ensure no contamination affects the trout as they are processed.
• Improve the storage areas of the trout production section to ensure products are not contaminated.

The firm does not own its premises. Instead, it leases the land and buildings it occupies from a landowner. Discussions with the owner are crucial in setting and agreeing the cost of the lease.

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