After his zealous crusade to alert the world to the perils of climate change, assisting a British grocery retailer's quest to turn a profit might seem far below the agenda of such a man as Al Gore.
The former US vice-president does not appear to think so, however. This month, Generation Investment Management (GIM), a private equity group backed by Gore, forked out several million pounds for a small stake in Ocado, the online supermarket that sells Waitrose food.
The sale of shares to Gore added him to a growing blue-chip investor register for Ocado which now includes Procter & Gamble, Goldman Sachs and the John Lewis pension fund.
For Jason Gissing, one of Ocado's co-founders, GIM's investment is a vindication of its search for credibility as an environmentally friendly consumer brand.
‘They are investing in this business because, having done all due diligence, they understand we do it differently,' he said on the day the deal was announced. ‘Our carbon footprint is different from going into a normal shop. It's a fantastic validation of all of the stuff we're passionate about.'
The company's latest fundraising, has taken it a step closer to the inevitable: a stock market listing likely to value it at £600m or more.
Since its launch at the beginning of 2002, Ocado has scooped award after award for the quality of its service, the efficiency of its supply-chain operations and the sophistication of its email marketing efforts.
Yet, beloved though it may be by its customers, Ocado has yet to do that crucial thing in business: make any money. This is hardly surprising; few online retailers have become profitable, and few of these have been food retailers.
Ocado, however, is confident that it will buck the trend. After scrawling red ink on its till receipts for seven years, the company has set itself a target of 12 to 18 months to move into the black. Once that goal is achieved, the funds generated from a listing on the public markets should allow it to embark on more rapid expansion.
The decision to price-match Tesco on everyday groceries has provided Ocado with a reasonable claim to offer decent value. Its service credentials are also excellent. Delivery times are largely adhered to, and the sophistication of the company's supply chain means that what customers order, customers usually receive.
These are invaluable attributes, but Ocado faces a battle if it is to replicate its initial competence on a bigger scale.
First, its competition is formidable. Tesco, for example, is investing heavily in its own internet shopping business -hardly surprising, when analysts believe that the market for online groceries is likely to expand at an unprecedented rate in the next few years.
That is likely to have an impact on Ocado's performance once it expands outside the M25, particularly given the power of the ‘big four' supermarkets to compete ultra-aggressively on pricing.
There are also likely to be further fiscal demands upon shareholders. Gissing's vacation of the role of finance director will allow him to focus on marketing and innovation, but there is little doubt that Ocado's investors will have to reach into their pockets again to support both. After all, there is little awareness of the brand outside the south-east of England.
That once-distant day of joining the rank of profitable retailers may now be closer than ever, but Gore will soon realise that taking on the giants of the grocery industry is likely to present no shortage of inconvenient truths.
Mark Kleinman is City editor at Sky News and a columnist for The Times
30 seconds on Ocado
- Ocado was founded in 2002 by Jonathan Faiman, Jason Gissing and Tim Steiner, all former Goldman Sachs merchant bankers.
- The name ‘Ocado' is a made-up word, intended to evoke fresh fruit, according to Jez Frampton, non-executive director of Ocado and chief executive of consultancy Interbrand, which devised
- the moniker. However, Neil Taylor, also of Interbrand, says the name was derived from ‘avocado'.
- Other proposed names for the company included Bean Runner and Fruit Passion.
- The John Lewis Partnership agreed a five-year stock partnership with Ocado last November, replacing a rolling one-year deal.
- According to its website, ‘Ocado was conceived with one simple objective in mind: to offer busy people a true alternative to going to the supermarket every week.'
- Greenstone, a carbon management consultancy, reports that using Ocado is greener than walking to the supermarket. Ocado offers ‘green van' delivery slots.