From famine to feast

Roger Trapp meets a man whose fine foods business has moved a long way from where it started, in the back of his car

Twenty years ago next month, 22-year-old Mark Leatham was fresh out of the army and looking for something to do. Little did he know that the activity he took up largely to fill in the time would form the basis of a business that this year is on track to turn over about pounds 25m.

As Mr Leatham explains, he had been a very frustrated soldier when he left the service because - a keen shot - he had missed much of the season while serving in Northern Ireland. The result was that he returned to the family home in Buckinghamshire and, as he puts it, took out his frustration on the local pigeon population.

He soon began selling the birds to restaurants and pubs in the area and, when the market became saturated, ventured up to London. Although he enjoyed some success, his father was concerned that he should get "a proper job" and he accordingly started work for the estate agents Knight Frank & Rutley.

Although he realised within two weeks that it was not for him, he stuck it out, while carrying on with the shooting for restaurants to supplement his meagre income of pounds 40 a week. "When the game season came round, I bought game from the shoots I took part in and distributed it to London restaurants in my lunch break," says Mr Leatham.

After a few months, business was going so well that he decided to leave the estate agents and become a "fall-title pigeon-shooter and game dealer". But having set up a business, he realised that he could not rely on game - and so began importing poultry to make up for the absence of grouse, pheasant and the rest. In so doing he set in train a series of events that sowed the seeds of today's successful company.

One of his earliest customers was Albert Roux, of the noted restaurant Le Gavroche, who was impressed by the quality of pigeons being sold from the back of the young entrepreneur's car and invited him in for a drink.

"He said he only drinks champagne and we shared a bottle. He seemed like a good bloke," Mr Leatham now says of the restaurateur who is notoriously choosy about produce.

At about this time he was joined by his brother, Oliver, two years his junior and just out of university. The younger Leatham started as a Christmas delivery man on pounds 25 a week and is now one of the partners in the business. The other is Terence Faulkener, an old school mate of the brothers. Several years ago he gave up a banking career to buy into the company and take a role in managing it and planning its move into supplying manufacturers of sandwiches and other pre-packed foods with top-quality produce.

Sales in the Christmas week of 1979 totalled pounds l,500 and the newly formed partnership M&O Leatham felt it was going somewhere. With the help of a loan from their father, the brothers moved into a butcher's shop in Streatham, south London and saw sales rise to pounds 7,000 in the run-up to Christmas 1980.

Soon afterwards, they were operating out of a small house in Chelsea and starting to deal in ducks, frozen prawns and smoked salmon, in addition to the regular game. "We were getting midnight deliveries from Scotland and the other tenants got fed up of waking up to find 40-foot lorries outside. Somebody reported us for running a business from a residential area and we were asked to leave," Mr Leatham says in explanation of yet another move.

By this time, though, they were getting serious. The new premises - in Camberwell, south London - were much larger than anything they had had before and funding them would require a sharp rise in turnover. Help came in the appointment of Leathams Larder - an operation set up to serve retail outlets alongside the main business's service to catering professionals - as London distributor for Phileas Fogg premium crisps.

Meanwhile, the company continued the diversification it had begun: it started importing such products as quality olive oils and sun-dried vegetables, initially from France and Italy, and then from further afield.

As the increasingly affluent Eighties rolled on, the company's fortunes grew, and 10 years ago it acquired Fayre Game, the UK's largest producer of quail and quail eggs. Although its turnover then was only about pounds 400,000, Fayre Game was attractive because it had, in Mr Leatham's words, "synergy with our game offer and a presence in Sainsbury's". Since then, Leathams has expanded sales to about pounds 5.5m, or about a fifth of its total turnover, by using the Sainsbury connection as a springboard into most of the other leading multiples.

The late Eighties also saw the brothers and Mr Faulkener, who started at M&O Leatham as finance director and then moved into his current role of commercial director, setting up a more professional management structure. They took on new sales and operations executives - thereby increasing their overheads just in time for the recession.

But although the recession had a big effect on the business, in that people who previously wanted quality became much more focused on price, Mr Leatham has kept with the structure on the basis that finding the products is, he says, a lot easier than finding the right people. His recruitment criteria of "blue-chip background" and entrepreneurial instincts, combined with the desire to play a dynamic role in a smaller organisation, are not easily met, he admits. Nevertheless, in keeping with other organisations that have enjoyed lengthy success, he and his colleagues have not been afraid to reassess the business and shift its focus as appropriate. Consequently, they looked at the business that had emerged from the recession of the early Nineties and realised that it had been "stripped of added value".

In 1994, they launched a plan to restore some of that value. Consciously splitting the company into two parts, they established Merchant Gourmet as a brand serving retailers. Now minus the Phileas Fogg crisps business, which has since been sold, this division is particularly well known in the trade for the product Camargue Red Rice, and has done especially well on the back of Sainsbury's Special Selection category, for which it supplies the goods. About 35 products from around the world make up the range and they are united, says Mr Leatham, by being "authentic and best-in-class".

The second part of the plan fell into place this year with the launch of Chefs Brigade, a food service brand. This is already establishing itself, says Mr Leatham, because of the growth of interest in quality ingredients for everything from office workers' sandwiches to the menus of the themed restaurants that have boomed in recent years.

Chefs Brigade has forged a particularly close link with Pret A Manger, the sandwich bar concept that has flourished, largely on its seated commitment to quality produce.

The demand has given Leathams - as the overall company is now known - the confidence to move out of its old premises, where the 160-odd staff were bursting at the seams, and into purpose-built premises in nearby Old Kent Road.

But, although he has come a long way from doing everything from shooting the product to preparing and selling it, Mr Leatham, who still finds many of the products himself, insists that the central message remains the same. Pointing out that the company name is underscored with the slogan "The Food Innovators", he says: "We're known for innovation. We've always got something new."