In an exclusive interview, Failté Group’s CEO Jim Cummiskey (above) tells Cash & Carry Management’s managing editor Kirsti Sharratt about the fire that completely destroyed the company’s fresh fruit & veg business on 17 August 2017 and the challenges in bringing the business back to life.
A feeling of utter helplessness washed over Failté Group’s CEO Jim Cummiskey as he found himself stuck on board a cruise ship for 10 unbearably long days. Instead of enjoying a much-needed holiday with his wife Margaret after five years of building up a previously failing business into a successful fresh produce wholesaler, he was hearing that, 3,000 miles away, it had all been reduced to ashes.
At the Glasgow Fruit Market where the business, Failté Produce, was based, a fierce blaze had ripped through the warehousing and offices.
Cummiskey told Cash & Carry Management the story: “Failté Produce was established in 2012 when we took over an unprofitable business. We turned it around to the point where, with seven units (a total of 17,000 sq ft), we were the biggest tenant in the Glasgow Fruit Market. It was generating £6 million a year in turnover and it complemented our main Failté Food Service operation (servicing all types of caterers and foodservice outlets) and our Failté Wholesale bulk soft drinks business.
“Margaret and I hadn’t been away for a long time because I had put a lot of hard work and money into building up Failté Produce, which was situated round the corner from our Food Service and Wholesale premises. By mid 2017 it was running at full tilt so I decided to take a holiday.
“When I got to Glasgow airport ready for our flight to New York, I was told there was a fire in the Fruit Market but that Failté Produce wasn’t in any danger. However, on the flight we had WiFi and I was getting reports saying that the fire, which was caused by an electrical fault in a unit six doors down, was making its way up to our units.”
Nevertheless, when it was time for the Cummiskeys to board the ship for their Caribbean cruise, the business still didn’t seem to be in harm’s way. “We set sail and were just going past the Statue of Liberty – this will stick in my mind for the rest of my life – when my mobile rang. It was Grant (Rennie, Failté’s managing director) who simply said, “It’s gone.” I said, “What are you talking about?” He said, “Failté Produce has burned to the ground. The only thing left is the safe.”
Cummiskey continues: “We were actually lucky, believe it or not, because the fire had been heading for Failté Food Service as well when there was a change in the wind direction. That said, the whole place was evacuated and we couldn’t get any vehicles out for deliveries – there was no trading that day. All the power went down but luckily we have generators in the Food Service warehouse and they kicked in.”
The enormity of the devastation of the fruit & veg business hit Cummiskey hard. “It felt like a member of my family had died. I was told that there were staff standing on the hill near the Fruit Market on the day of the fire crying as they watched the place burn to the ground. They couldn’t believe it. We had all worked so hard to build up that business and in a matter of hours it was gone.”
Cummiskey had to focus on being positive and proactive – not only were his staff relying on him, he also had to decide whether he could resurrect a business that had been five gruelling years in the making. It was insured for consequential loss but he was unwilling to take the cheque and run. “That would have been too easy,” he says.
“I admit I was despondent for a whole 24 hours but I dusted myself down, based myself in a small Irish pub on the ship – I wasn’t drinking, I add – and proceeded to try to get things back up and running along with Grant, Irene (our financial director) and the other senior management and staff in Glasgow.
“Grant held the fort admirably and we spoke several times a day while I was away. When I came back we put a structured plan in place.”
They decided that they should empty the Failté Wholesale depot which, at 6,000 sq ft, was less than half the size of the Failté Produce former units. It was full of products, including pallets of Barr soft drinks, so AG Barr kindly took the stock back into storage. “That was a big help but it didn’t solve the problem of having no refrigeration in there, so we rented four 40ft chill trailers.
“We had also lost our manufacturing facility so we had no prepped veg. We were contracted to the NHS and schools but they had to start pulling in other suppliers because we couldn’t give them the service they needed. In this industry sympathy lasts for about 24 hours and then it’s ‘Where’s my order?’
“We managed to get back up and running within seven days but with limited resources. We had a situation where we were having to empty a 40ft container to get one pallet out and then put the rest of the stock back in. An eight-hour job turned into a 14-hour job.”
The challenges extended beyond the physical rebuilding to managing damage limitation with customers. “We were operating at about 20% capacity and we had lost the confidence of some customers. We hung on to a good percentage of the contracts; the battle was about trying to bring back customers who had left.
“We also faced the unsavoury situation of a couple of competitors phoning our customers saying that we would not be trading again and that we had recommended them as replacement wholesalers. All these customers stayed with us – they were disgusted by those antics.”
The 55 Failté Produce telesales and admin staff had to move into the Food Service premises as their own offices had been directly above the warehouses and had suffered the same fate. “My office was used as a war cabinet,” Cummiskey recalls. “We were all treading over each other.”
He continues: “Within six weeks the business was up to 60% capacity but we were blowing our brains out from a manpower and logistical point of view. Between them, the staff worked 24/7, seven days a week, for the first three months. I can’t thank them enough.”
Cummiskey secured a supplier of prepared veg so that Failté Produce could resume a full service. At the same time, he was overseeing the construction of chillers, racking and shelving in the former Failté Wholesale warehouse. He then came up with the idea to build offices above the chillers. “It was a
massive job as we had to get planning permission and keep working around the builders. People said it couldn’t be done, but we’ve done it.”
Failté Group received interim payments from its insurers, so funds for the refit of the warehouse were not an issue, and the insurance case was settled quickly. “I class myself as being one of the best negotiators in the world – I do it every day for a living – so the loss adjustors were glad to see the back of me!” Cummiskey laughs.
In the midst of the challenges, he took heart from the positives that could be salvaged from the situation. “The relaunch gave me and Grant an opportunity to refine the Failté Produce business and get it exactly as we wanted it. Also, bringing the business into our former Failté Wholesale warehouse meant we weren’t paying any rent as we own the building, and we didn’t go back into vegetable prep – it made financial sense to use external suppliers – so we saved half a million pounds.”
The company also replaced its 16-strong Failté Produce delivery fleet with new vehicles sporting redesigned vibrant branding. In total, £1.6 million was invested in rebuilding the business. This included a £250,000 canopy along the back of the warehouse to give an extra 10,000 sq ft of storage space,
protecting stock from whatever the Scottish weather throws at it.
The turnover of Failté Produce is now up to £4.5 million and the target is £5.2 million. “We will max out at that because we are operating from 6,000 sq ft compared to 17,000 sq ft and that’s where we want to be because the fruit and veg market is so fickle,” he says.
With the management team’s energies concentrated on reviving Failté Produce, they were naturally sidetracked from the day-to-day running of the Food Service operation. “It suffered from losing warehouse space as well as our focus because we had to make room for some of our Wholesale stock. We had to deal with a lot of logistical difficulties but we have come out the other end and are a lot stronger now.”
Before the fire, Failté Group had a turnover of £23 million; this year it will hit £26 million. Cummiskey’s resilience is reflected in his view of the present position: “If you said you could take me back in a time machine to before the fire, I wouldn’t go back. I much prefer having all the businesses under one roof. We are now doing what we want to do with Failté Produce and we can control it a lot better.”
Cummiskey reiterates his gratitude to his employees: “Without our staff, Failté Group is nothing. I know they need leadership and Grant and I give that, but they played a huge part in getting us where we are today.”
He also acknowledges the impact of the fire on his wife. “It totally ruined Margaret’s holiday because I was like a bear with a sore head – I don’t know how many times I tried to get off that boat!”
As Cummiskey concluded the interview with Cash & Carry Management, he was packing to go to Tenerife with Margaret for another long-awaited break. This time, nothing was going to stand in his way – not even the fact that he had been at A&E with a perforated eardrum just a few hours earlier…
Jim Cummiskey: area manager at just 19
Jim Cummiskey’s career in the food industry began over 40 years ago at the bottom – literally the bottom – working in the basement of a general grocers after school and at weekends.
When he was 17 he was made manager of the store and within two years he was promoted to area manager for five branches in the greater Glasgow area.
At the age of 20 he struck out on his own, opening his first grocery shop, having persuaded his parents to offer their house as collateral for a bank loan. He subsequently opened four cooked meat shops, then moved out of retail to operate bakery vans. He founded Failté Wholesale in 1995 and Failté Food Service in 2004. In 2012 Failté Produce was established.
Tel: Failté Group 0141-548 6170