Through shrewd acquisitions, Culina Group chief executive Thomas van Mourik has built a logistics business boasting a turnover of over £1bn. But as far as he’s concerned, it’s all just an enjoyable hobby.
A year as challenging as the last one has only served to enhance the reputation of Culina Group boss Thomas van Mourik. It has also underlined the resilience of his business model.
The winner of our 2020 Service to Industry Award insists that when a company stands still, it goes backwards. So, even in the grip of a pandemic, he has continued with the highly successful acquisition strategy he has developed since launching the company back in 1994.
Last June, for example, he surprisingly splashed out £98m to buy third-party logistics giant Fowler Welch – a business with a great reputation in the marketplace, giving Culina a strong foothold in the fresh produce logistics sector.
The group now boasts a turnover of more than £1bn, boosted by numerous acquisitions that complement a core focus on ambient and chilled food and drinks. The list now includes the likes of IPS, CML, Morgan McLernon, MMiD, Unity, Warrens and Great Bear – a portfolio impressive enough to see Culina also scoop our 2019 Haulier of the Year Award.
But it’s that Fowler Welch deal that van Mourik, pictured, feels is of most significance: “What we are doing now is injecting investment and funds into Fowler Welch that will make it, over the next two years, of equal size, importance and profitability to Culina Logistics,” he says. “But with a market proposition that’s different. That’s fantastic.”
Until now, he has been happy to limit his ambitions to complementary businesses, but times may be changing: “That’s our playground,” he agrees, “but we’ll end up exploring ventures as part of an acquisition that do not necessarily need to stick to the core principle. Some targets are small but fit into the Culina Group jigsaw and some may be a new pillar to the group. We don’t have any boundaries.”
Understandably, he is guarded on targets, but retaining any existing management structure remains key: “Maybe a small acquisition gets absorbed, which is what we did with Robsons in Spalding,” he says. “When we bought Fowler Welch, which came from nowhere, there was no point in Robsons doing the same thing separately. But that’s an exception. If we buy a business of substance, we want to keep them the way they are. We don’t buy businesses that are broken.”
Van Mourik also remains refreshingly upbeat on the likely longer-term impact of the pandemic: “By 2022 we’ll have forgotten it to a large extent,” he says. “Humanity has got one thing sorted – we forget the bad things and always remember the good. And Covid will be another one where in a couple of years we’ll say, ‘can you remember those times?’ ”
His positivity is fuelled, to an extent, by the spike in demand that many of Culina Group’s customers have enjoyed. “We just carried on with the customer base that we have always had and done it with bigger volumes than we were expecting,” he explains. “That’s the Covid effect.”
But have soaring volumes translated into spiralling profits? “Well, under normal circumstances you would say yes, and we have been up a little bit,” he says. “But people have had to work in less than ideal circumstances. They’ve got to be two metres apart, people have been off work unwell and we have had to hire more people while implementing a large amount of increased health and safety procedures, which puts a lot of cost into it. We’ve done better, but it has not been exceptional.
“We are in the fortunate position to be in the sector where demand has gone up. We are warehouse-supermarket predominantly and supermarket deliveries are a bit bigger than they used to be. But volumes will stabilise. I’m not counting on a benefit in the second half of the year as we come out of lockdown.”
Drinks are down
The only area of the business that has struggled, he admits, is the bonded drinks business in Hoddesdon, where volumes dipped at the start of the pandemic. But Culina Group furloughed only about 50 people here out of a total workforce of 11,000. Most have since been re-employed at other sites.
One major downside has been the “nightmare” of Brexit, where van Mourik’s views are already well documented. Suffice to say, the situation has cost Culina Group “a boatload of money” and he fears it will take a long time for trading between the UK and Ireland to return to previous levels of profitability.
He adds that the government didn’t consult with the industry in the run-up to Brexit. “The only meeting they have ever had with me was on the future of transport,” he says. “It was all about driverless trucks.”
Future challenges
For the future, he identifies two major industry challenges – labour and storage. With logistics heavily reliant on immigrants, he fears that, once restrictions ease, many workers will want to go home for a break. Others will want to go back permanently.
The storage challenge, meanwhile, stems from the impact of Brexit: “We are inevitably putting far more product through our supply chain before it gets to the consumer than was necessary,” he says. “I know storage is now at a premium. Anything that gets built gets taken.”
He admits he has missed interacting with customers, but has probably visited more of his 65 depots than he has ever done previously: “I just go off and see that everyone is doing a good job or give them a bit of thank-you. People will want to go back to work. It’s nice to talk with the technology, but it’s even nicer to meet face to face. We have people at Culina Group who can’t wait to get back in the office and have a bit of banter.”
Meeting people, he says, is his favourite part of the job – his proudest moment being the group’s 25th anniversary last year. “To be able to celebrate with the whole family of employees and do something special has been the crowning moment of my career,” he says. “It’s not about achieving any financial goal or turnover milestone, just 25 years in business.
"We hired Alton Towers for the day. You see thousands of people walking round there with kids and grandmas and you think: wow, what a responsibility we have as an employer.”
Returning to strategy, van Mourik is clearly a man who does things his own way, rather than following anyone else’s lead.
However, he admits to being particularly impressed with Amazon: “I like to know when my goods are being delivered,” he says. “With Amazon, their service is fantastic. What I really admire is how Amazon started at a similar time to Culina Group out of a single site, yet they have grown into one of the biggest businesses in the world. I can’t comprehend how they have managed to grow so fast.”
The conversation finally turns to alternative fuels: “I don’t think you can do electric with an HGV,” he says. “A 44-tonner needs so much battery power, it will fill the trailer and you’ll have four pallet positions left to do your delivery.”
He also rejects Siemens’ e-Highway system: “I can see it working in Sweden or Germany maybe. But in this country, we’ve not spent a penny on our motorway structure for years. All we’ve done is turn the hard shoulder into a motorway. We call it a smart motorway, but there’s nothing smart about it. We have a problem. We are a nation of patching up.
“If I were a betting man, I’d say hydrogen is where we’re going. We all need to go electric, but unless we get an opportunity to charge the vehicle in a very speedy way wherever we go it’s not going to work. The infrastructure isn’t there. At the moment we’re dreaming.
“Biofuels are far more of a goer. But again the availability of that is not that great. And it needs to be pushed by the big boys.”
However, like many big operators, he admits he doesn’t want Culina Group to end up being the “guinea pig” for failed experiments. “And then you also have customers that were very keen on us going down the green route until you tell them what it’s going to cost,” he laughs. “All of a sudden they’re not green any longer.”
Ultimately, van Mourik seems far more focused on acquisition and expansion than fuel options: “I love growing businesses and seeing things become even more successful,” he smiles. “I’ve grown up with it. It’s not stress, it’s 24 hours a day for me. I have my phone switched on even when I’m on holiday. It sounds a bit awful, but it becomes a bit like a hobby. I truly enjoy it. It’s a lot more than work.”
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