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Growing demand for gourmet tomatoes sparks funding deal

For David Craig and Scott Robertson, 2013 was a rollercoaster year with plenty of highs and lows.

TASTY: David Craig and Scott Robertson secured a loan to expand the business Clyde Valley Tomatoes.
TASTY: David Craig and Scott Robertson secured a loan to expand the business Clyde Valley Tomatoes.

They had revived the once-famous Clyde Valley tomato industry at Carluke by taking on the largest business in the area on a three-year lease agreement with retired owner Jim Craig (no relation) with a £150,000 rescue package jointly funded by Clydesdale Bank, South Lanarkshire Council and Scotherbs, the specialist growers based in Carse of Gowrie near Dundee.

In their first growing season which ended in November last year, they cropped 100 tonnes (2.5m) of new and classic varieties from 10,000 plants grown hydroponically, and re-established the brand with the existing customer base at Dobbie's Garden Centres nationwide, chefs, and farmers' markets and farm shops across the country. A turnover of £200,000 represented a small operating loss, but they were happy with sales performance.

As cropping for the new season begins over the next two weeks, they're taking a great leap forward. Such was the buzz around the newly-branded product, given a smart new logo by Glasgow-based designer Graven Images, that two large multiples immediately approached them last summer for exclusive supply in 2014. From May, Waitrose will sell three varieties - mini plum, medium vine and large vine Clyde Valley Tomatoes - in all its Scottish branches, and Morrisons will sell their Annamay cocktail vine tomatoes in 65 branches in Scotland under the Scotty Brand label, using the distribution hub at Cumbernauld. A television marketing campaign will support the launch in Morrisons' stores.

Dobbies Garden Centres across the UK will sell red and yellow cherry toms, baby plums and rainbow packs. Other outlets are WholeFoods Market in Glasgow, House of Bruar and St Andrew's Balgove Larder farm shop. In addition, the pair will be personally selling at farmers' markets in Edinburgh (Castle Terrace and Haddington), and Glasgow West End. A number of Scottish chefs are also using the tomatoes.

All of which has meant that Craig, 33, has been on a nail-biting search for new funding to support the purchase of 14,000 new plants, planted in February this year, to recruit two full-time members of staff, and to increase facilities at the 32-acre site.

On advice from Johnston Carmichael, he did not want to pursue an equity financing package at this stage, and instead has secured a £100,000 loan jointly from South Lanarkshire Council via the West of Scotland Loan Fund, Development Strathclyde Ltd, and Clydesdale Bank.

"One reason we've managed to secure funding is that we've pre-sold stock. We are absolutely delighted at the response so far, though our challenge this year is capacity," he said.

"In a business like this we spend a lot of money up front in establishing the crop. The revenue streams come in as the season progresses from May. We'd prefer to postpone equity financing, so we can remain in control rather than pandering to investors."

He admits that they made mistakes in their first year. "We didn't have the right mix of varieties, and we planted far too much of the classic round tomatoes. It became clear very quicikly that our customers didn't want them, and preferred the more specialist varieties like red, yellow or black cherry, tiger stripe and baby plum tomatoes. We simply didn't plant enough of them," he said. "This year, we have increased production by 50%, and are now using the entire greenhouse, filled with 21,000 stems of tomatoes. Some are new varieties, such as the Black Marmande giant beef tomato." By contrast, the heritage Scottish variety Ailsa Craig has been dropped because it did not grow well hydroponically.

Surplus of unwanted classic reds were sold at a "knock-down" price through the Glasgow fruit market at Blochairn, where prices fetched are the same as for Dutch tomatoes. Clyde Valley Tomatoes are pitched at the premium market, to reflect their local credentials and specialist environmentally-friendly growing techniques. The plants are being grown this year in coir, a natural medium, and pollinated by native bees. No pesticides are used. A range of branded Clyde Valley produce is also planned, in co-operation with small farmers.

Craig and Robertson have the option to purchase the site when the three-year lease expires in 2015. They plan to actively pursue equity funding in the summer to do this, and also to purchase a biomass heating system. They revealed that they already have three interested parties, though they will prioritise those with a genuine interest in the business.

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