The journey of a traditional family estate to a diversified business

Rhug Estate in Denbighshire, North Wales, once a very traditional estate, now a thriving, diversified business with its own brand.

Over the past 20 years, Lord Newborough and his team have stepped the business up a gear, creating a multi-faceted enterprise while keeping farming, food production and the land at the heart of what they do.

We spoke to estate manager, Philip Hughes, on the drivers to diversify and how the business has evolved over the years.

Figuring out the options

“Lord Newborough inherited Rhug in 1998 from his father and it was from this point forward that we were given the green light to start researching different opportunities to diversify,” explains Philip.

“This was a process of looking for opportunities that would allow us to build the business, while driving maximum value from existing assets. We had a 12,500 acre estate to ‘play’ with but each idea had to fit in with Lord Newborough’s vision, and work with the existing, traditional enterprises.”

See also: Assessing farm assets for farm diversification

Going organic

The first move was the organic conversion of the inhouse farm having identified organic meat as a growth area. “By the year 2000, we were an organically certified farm producing lamb and beef and selling direct to Waitrose.”

Philip explains that over the years, as farming tenants on the estate have retired, Lord Newborough has chosen to take a number of these farms back in hand allowing livestock numbers to increase.

“Beef and lamb is still very much where the volume of protein comes from, but we have also introduced poultry, producing organic broiler birds for table meat, as well as Bison and Japanese Sika deer both of which occupy the parkland.”

Having increased livestock numbers there was a natural progression to start looking for other options to sell their own meat and reduce the reliance on the major supermarkets and their pricing structure.

Farm shop opening

“In 2002 we opened the farm shop which consisted of two mobile units, a butchers and a catering unit with the intention of taking these out on the road, but they ended up being successful at home.

See also: Business start-up guide - Farm shop

“Having thought we were located in the middle of nowhere with the wrong local demographic for organic produce, we were proved wrong as we realised the value of the A5 which runs through the estate. People were using us as a stopping point on their journey.”

From this point forward the food retail business went from strength to strength. In December 2010 a 5,500 sq. ft. farm shop opened with half of the floor space dedicated to food retail and the other half a bistro and grab and go food outlet which now sees between 300,000 and 400,000 people visit the shop annually.

“Our approach at Rhug has always been to figure out and learn how it is done ourselves before taking the next step.

“The farm shop was a prime example of this. We tested our idea before investing huge amounts of time and money and learnt how we wanted to take things forward.

“You could argue that our ‘trial years’ were a period of wasted trade, and perhaps if we had a little more experience we would have invested harder sooner but we chose to prove the site and do our learning first.

“After several years, we employed three experienced managers to take the business up another gear.

The UK’s first farm drive-thru

With the volume of traffic through the farm shop continuing to grow, August 2018 saw Rhug launch the UK’s first farm drive-thru. “We had got to a point where the farm shop wasn’t able to give a quick enough service to our customers who wanted a grab and go option which is why we introduced the drive-thru offering fast food.

See also: How to carry out market research

“This move has allowed us to extend our opening hours at a lower cost as you don’t need as many staff to run it efficiently and safely which has helped the farm shop enormously.”

Renewable energy

The most recent diversification has seen the estate move into renewable energy in a big way, introducing a number of renewable technologies. “Our intention with this has been twofold – one to improve our environmental credentials, and two, to help reduce energy costs of the business.

“Lord Newborough wants the business to be sustainable and this is one of the steps we are taking to realise this vision.”

Philip also explains that from a financial point of view the renewable energy enterprise is the most profitable. “You have a guaranteed customer and price, and the type of business means it’s a series of engineering projects that have to be delivered and project managed.

“Therefore, operationally you have to be good, but you don’t have the added complexities of dealing with customers and marketing which other elements of the estate do.

“The one bit of advice I would give to anyone looking at going into renewable energy is to move quickly because when politics are involved things change that will affect the market. Take as much risk out of the project as you can and have some perception of where things are going.

“We are in the process of developing a 20-year business plan to decide how we manage our infrastructure over the coming years. It’s an exciting time to be in this sector, but getting the right advice from the start is highly important to ensure you get the right system in place for your set-up.

“We are fortunate enough to have a number of assets that we have been able to capitalise on and realise Lord Newborough’s vision of creating a diversified business and because of this we have been able to spread our risk through various revenue streams.

“We now have the challenge of having a very diverse business, employing a number of people which can be complicated. We’ve realised that we’ve created our own small brand now with some recognition and our intention is to start exploring opportunities to leverage this brand and to let other businesses know we are open to share what we have created with them.

“We are looking to bring in external expertise, skills and investment to grow other businesses on our site that can make use of the honey pot of visitors that are now coming to Rhug."

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