Today, The Fruit Box delivers to a who’s who of Australia’s blue chip corporations, but it’s been a bumpy, busy ride to the top
It took Martin Halphen at least seven years to get his business, The Fruit Box, into a cash flow positive state. At one point, he and his wife sold the family home to ease the burden. Things were tough, as Halphen recalls, but he knew his business model was solid, and there was light at the end of the tunnel.
Jump ahead to 2014 and The Fruit Box is hugely successful, delivering fruit boxes to 8000 corporate customers at least once per week, and racking up an impressive 25,000 total deliveries nationally per week, buffered by its newest division, milk for the office fridge.
Whilst The Fruit Box may be in a very comfortable position today, Halphen has never forgotten the early days.
“I was warned by my dad that it would take five-to-seven years to build the business properly,” he says. “He said it wouldn’t happen quickly and that I needed to be patient. It took exactly that amount of time, and it was really tough and really stressful. We were dependent on credit and at one point, we went backwards. My wife and I sold our home which gave us the breathing space to continue. Eventually we paid off our debt and after seven years we were in a cash flow positive position.”
Those lessons have taught Halphen to take a conservative, or as he puts it, “non-aggressive” approach to business.
“Those seven years scarred me, I’m now scared of banks,” he says. “We have a pretty simple approach these days. We invest in the business constantly, but we don’t spend more than we make.”
Halphen bought The Fruit Box business in 2000, after seeing an ad in a local paper. He was desperate to become his own boss. He’d spent three unhappy years as a commercial lawyer straight out of university.
“I just wasn’t interested enough, it was a bit of a train wreck,” he concedes of the experience. He then moved into an operations role at Visy Recycling where he was happier, and gained valuable insights into logistics that he says are still useful.
When he took over The Fruit Box, it was a suburban-based business, delivering fruit to homes in Melbourne’s south-eastern suburbs. When a customer enquired about delivering fruit to her office, an idea was born, and the business quickly evolved to service the corporate market.
As a new business owner, Halphen was involved in every function. He recalls early mornings at the market buying produce, he spent time on the phones talking to customers, he oversaw payables and receivables, acted as a business development manager, and drove the truck on delivery runs.
“I knew I had to work out what the business’ priorities were,” he says. “Fruit in the workplace was a no brainer. It was easy to sell, but hard to deliver. So we focused on operations and our business culture. Then came purchasing, and understanding the markets. That was a completely different culture to anything I was used to. My attitude to customer service and finance was that I’d do it until I could find someone else to replace me, and in time, that happened. And these days I’m much more involved in strategy, to take the business to the next level and give us a better chance to grow going forward.”
The decision to expand into milk is a key part of The Fruit Box’s growth strategy. When the GFC hit, Halphen realised the business was vulnerable.
“Fruit is a discretionary spend in corporate Australia and we were reliant on it. We asked ourselves, ‘what can we do to diversify?’ and toyed with the idea of milk. Every company needs it, we know about delivering to corporates, and we had the database. So we did some research into how to deliver it, since it’s not a product but a service, and now it accounts for one third of our business.”
Office workers of today are spoilt for choice, with everything from fruit to muesli to nuts and ready-made lunches available via a phone call or a click of the mouse. But The Fruit Box continues to build its brand awareness and focus on what it does best.
“Where there’s competition, there’s a business opportunity,” says Halphen. “The main focus for us is to provide a competitive proposition. We don’t take anything for granted, we’re all about improving our customer initiatives. And we’re not hell-bent on what others are doing. We like to run our own race.”
It’s fair to say Halphen has achieved his modest objective from those early days – to run a business that was cash flow positive – and in his own words, “we’ve experienced more success than we ever thought possible”.
Writer: Megan Gamble
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