Summary
Forest Garden turns over around £50m per year.
• It manufactures and distributes more than two million products.
• It has the largest garden shed manufacturing facility in Europe.
• Log cabins were introduced to the range this year.

Hurricane-force winds may not be everyone’s idea of a good time, but for Forest Garden a storm in late 2007 – the largest in 17 years – was the archetypal cloud with a silver lining.

Following a seven-year period of ownership by 3i, the Worcestershire-based company had just been steered through a management buyout by its then chief executive and now executive chairman Jonathan Halford.

The storm provided a welcome kick-start. “It felt like everyone’s fence panels had blown over,” said sales and marketing director John Gomersall. “We probably could have sold our capacity three or four times over in that year.”

Largest manufacturer

The company has consolidated its position since then and is now the largest manufacturer and distributor of garden timber products in the UK, turning over around £50m per year. It manufactures and distributes more than two million products, including over a million fence panels and 130,000 sheds per year.

Its premium Forest branded range of products is sold into independent garden centres and timber and builders merchants, while it supplies the DIY multiples sector with a mixture of own label and unbranded products.

One key part of the success of the whole set-up is a third strand to the business, Forest Sawmills Ltd, which encompasses two sawmills, one at Steven’s Croft in Lockerbie, the other at Sennybridge in Brecon.

Forest Sawmills is run as an independent business, supplying more than 45,000m³ of locally-sourced, FSC-certified processed timber, 80% of its output, to Forest Garden (catering for 80% of Forest Garden’s sawn timber needs) and the remainder to third parties.

Having these specialist fencing mills in its camp has enabled the company to smooth out the peaks and troughs of seasonal – and often unpredictable – demand.

“The sawmills give us complete control over our supply chain,” said Mr Gomersall. “After the storm of 2007 for example, when everyone was fighting for material, Lockerbie was able to operate 24/7 to supply our assembly operations and service the market.”

The smaller Sennybridge mill has the flexibility to cater for the short runs that are often called for, while Lockerbie, according to Forest Sawmills’ commercial director Mark Dayson, is more of a “sausage machine”, running full shifts on one particular sized product at a time.

“Lockerbie operates seven days a week with two shifts. At peak times we can operate additional night shifts and will process 40 loads of logs per day, so we run it quite hard,” said Mr Dayson.

Sawmill investment

This year Lockerbie has seen investment to the tune of £500,000 in three new log handling machines and automation improvements and upgrades, and features grading, 3D scanning, planing, shaping, re-sawing and pressure treatment facilities.

These investments and improvements, said Mr Dayson, have increased output at Lockerbie, which will help drive further external sales – a target going into 2012.

Fencing slats – 15 million of them a year – framing battens, cappings, featheredge, posts, shed boards and gravel boards are the main areas of production, with assembly and subsequent distribution taking place at Forest Garden’s headquarters in Worcestershire.

Until 2008 these functions had been carried out at two sites, Hartlebury in Worcestershire and Eardisley in Herefordshire, but when the opportunity arose to take more space on the Hartlebury Trading Estate the company jumped at it.

Not only did it provide Forest Garden with centralised operations, the move also allowed it to refocus on how it served the market, taking on board changes in customers’ buying trends.

The company is active in all market segments: DIY multiples account for a significant share, with builders merchants and garden centres coming second. The biggest change has come from the segment that makes up the balance of business – mail order and internet retailers who are growing in size and gradually stealing market share from traditional bricks and mortar retailers.

Home delivery

In order to cater for the growth in this sales channel, the company decided to dedicate one of its units on the trading estate to home delivery – Forest Home – and the other to builders merchants and DIY multiples deliveries – Forest Store.

Volume production is the name of the game at Forest Store, which has capacity for up to 50,000 standard lap panels and 5,000 sheds per week. Recent investment in shed floor automation has resulted in a 25% increase in output and “the largest garden shed manufacturing facility in Europe” .

In peak periods Forest Store dispatches around 80 40ft Eddie Stobart articulated lorry loads per day – in the run-up to Easter it hit a record 96 artic loads – and delivers to up to 3,000 different outlets per week.

Meanwhile, Forest Home’s business is growing year on year and the company now undertakes 90-100,000 direct home deliveries on behalf of its customers every year.

“Our customers take the order, pass it to us and we process it, communicate with the consumer and book the delivery direct with them,” said Mr Gomersall. This, he added, has led to a huge operational change – the company has invested £200,000 in a fleet of 30 vehicles and launched Forest DDH (delivered direct to home).

“Delivering direct to the consumer, rather than via a third party haulier has brought lead times in, helped us manage costs and given us a lot more control and flexibility,” said Mr Gomersall.

This closer contact with the end consumer has also taken Forest Garden through “a massive learning curve,” according to head of marketing Vicky Nuttall.

“Traditionally we’ve been dealing with trade customers and calls coming into our customer services from stockists,” she said. “We now have a whole department dedicated to enquiries from consumers regarding home deliveries.”

Call centre

Forest Garden’s customer services call centre, also based at Hartlebury, now handles up to 2,000 calls per day in the peak season across both the Forest Store and Forest Home departments.

Since the end of March an online order tracking facility has complemented DDH and the call centre, but it isn’t the only web-based service at the company’s disposal. Since the launch of Forest Connect in 2009 trade customers have been able to place orders via their own password-protected, customised page, accessed through the main Forest website.

“It’s another way of streamlining the process and eliminating the risk of misinterpreted handwritten faxes or phone messages and it’s been really well received,” said Ms Nuttall.

In fact, more than a quarter of Forest’s independent customers now regularly use this system, which includes up-to-date stock availability information, earning themselves a 2.5% discount in the process. More than £2.5m of orders have been placed via Connect in the last 12 months.

Adding value

Adding value to the proposition in terms of the service Forest Garden provides for its trade and consumer customers is increasingly important as a way of differentiating itself from competitors, but product development and launches are still crucial.

Product design is in-house and is sub-divided into categories headed up by “product range champions” within the business who will look for gaps in the portfolio or areas where products might be “rationalised”.

“It’s a very collaborative process and takes input from all parts of the business, drawing information from our different customer bases,” said Ms Nuttall. “Some of our customers are very proactive and tell us what they want, while others are happy for us to guide them.”

With a product range including fencing, sheds, decking, landscaping and garden buildings, Forest provides a one-stop shop for customers. This year log cabins have been added to the mix; the overall market for which Forest estimates is worth around £24m a year.

“This has filled a gap in our range and enhances our one-stop shop offer,” said Ms Nuttall. “There is a definite trend for home offices and for people wanting additional space without having to move or extend their home. Many of our log cabins fall below the 2.5m height limit for planning permission, and when that’s taken into consideration, they are a cost-effective option.

“We’ve had a good buy-in from our core customers featuring them in their brochures and from independents taking display models,” she added.

Product displays

Product displays “in situ and in context” are more effective than “toast rack style” storage and Forest is looking to encourage more of this, along with “face on” rather than “end on” racking with its independent customers who have more control over the use of space.

The grow your own ranges have sold particularly well using this method and this autumn Forest plans to replicate their success with displays of storage solutions. These will be heavily marketed as part of the company’s National Tidy Garden weekend, an initiative designed to drive extra demand before the main gardening season ends.

Scheduled for October 22-23, the weekend the clocks go back, the campaign will link with leading industry figures, including an as yet to be revealed TV gardener, to provide advice on winterproofing the garden, from storage and repair work to protecting vulnerable plants.

“Twenty per cent of our sales are made in April and 60% in the space of three months, so the year is always front-loaded,” said Ms Nuttall. “Anything we can do to spread that is going to be beneficial. Our sales team is out there now pushing promotions and products, which we’ll support with point of sale and marketing. There is good extra business to be had at the back end of the year.”