‘they could use their manufacturing licence to both help with a national product shortage and diversify’
FreeStep manufactures and distributes a wide range of supplements to help horses stay fit and healthy. The company has a large client base of direct customers as well as selling its products via numerous horse feed and saddlery stores across the UK. FreeStep has an annual turnover level of approximately £500,000.
CoronaVirus and Business Approach
When the Coronavirus pandemic hit the UK in March the owners of the business realised they could use their manufacturing licence to both help with a national; product shortage and diversify into a new product line in case existing sales were badly hit. FreeStep applied to extend its manufacturing licence to include alcohol so they could start manufacturing a 75% alcohol hand and surface sanitiser.
Shortly after the application to extend the license the Ministry of Defence called asking if the company could produce the sanitiser and sell it to them for use in the NHS. This was at a set price – therefore very low profit margin but bulk orders so the FreeStep Directors were happy to help if they had the licence extension to manufacture in house. FreeStep were told the application could be processed in as little as five days rather than the usual months but it was actually granted at the beginning of May.
Whilst waiting for the license to manufacture with alcohol the company sourced the appropriate 75% alcohol liquid sanitiser from a distillery that had already started production – FreeStep acquired 200 plus litres of complete product as an interim measure. This was immediately sold to the public via the existing website. However, it couldn’t be sold to the Ministry of Defence as it was not possible to supply the sanitiser at the appropriate cost base if the product was not being manufactured in-house.
The company premises are on the property of one of the Directors of the business. Therefore, when lockdown started, three of the four full time employees were furloughed as it would be impossible not to mix households otherwise. Covid-19 had affected sales of the equine supplements which had suffered a 20% drop. It has been all hands on deck at the house of the Director who lives next to the premises though, as she has been packing and fulfilling orders of both equine supplements and hand sanitiser assisted by her daughter and daughter’s partner who are both self-employed and have had to temporarily stop trading due to the virus. As the extension to FreeStep’s manufacturing licence has been granted, the other company Director will come off furlough at the end of May and return to work to assist with the manufacturing and sales process.
FreeStep are aware of other businesses that have adapted their manufacturing to produce new product lines in response to the Coronavirus pandemic and have formed close allegiances with these. One example is the NHS receiving protective visors free of charge, manufactured by Galloping Geldings and distributed by FreeStep. These are also sold direct to clients at cost. The Directors foresee a change in cleanliness habits going forward and believe at least a percentage of the increased demand for sanitiser will continue; they therefore intend to continue manufacturing and selling the new product. That is providing the three month extension to their manufacturing license to include alcohol continues to be extended or fully granted in the future.