On 21 November 2019, GJE hosted a panel discussion with John Eastaff, Investment Director at Peter Jones TV, Adam Sopher of Joe & Seph’s popcorn and Raheel Rehman of Annabel Karmel baby food who provided their top tips for starting and scaling food and drink businesses in today’s crowded and fast evolving market. The panel was chaired by Edward Carstairs,Trade Mark Attorney and Partner at GJE LLP.
- John Eastaff – Investment Director at Peter Jones TV, responsible for managing Peter Jones’ portfolio of businesses including those investments seen on Dragons Den.
- Adam Sopher – Co-founder of the popular luxury popcorn brand of Joe & Seph’s
- Raheel Rehman – Head of Export Sales at Annabel Karmel, who has a best-selling cookbook with over 6 million copies sold worldwide
The food & drink industry is said to be worth £31bn to the UK economy, with about 96% of the businesses being SMEs (i.e. enterprises with 249 or fewer employees). Therefore, the sheer number of existing products and brands in such a crowded sector makes it hard to come up with something new and it’s all too easy to clash with someone else. Add to this the ever-shifting consumer trends, increased regulation on sugar, salt and fat and so on and it becomes clear that this industry can be a tough nut to crack.
For those businesses that get it right, the food & drink industry is a great space to be. Here are our panellists’ top tips:
- Do the numbers add up?
This requires particular attention.
As is so often the case on the BBC’s “Dragons’ Den”, the finances of a business are scrutinised and the numbers must add up if to secure investment. Accuracy with your accountancy is crucial when you are starting out and a pitch can quickly unravel if you don’t know the ins and outs of the balance sheet. The financial side is clearly fundamental to the business but regularly seems to be overlooked by businesses in the early stages.
If you aren’t a numbers person, find someone who is; you can then invest your precious time in parts of the business where you do excel, in the knowledge that your bank balance is in safe hands.
- If you don’t know, find someone who does.
Don’t underestimate the benefit of experience and the value this has at a time when your business is growing. When it comes to the complexity of the business or the industry, naivety will show. In the food and drink industry this is particularly relevant when you are trying to get a product listed.
If you don’t have experience in a particular area, seek expert advice and bring the right people on board. Go to school on someone else’s time by taking a job in a similar industry to learn from those around you and gain experience in the types of hurdles small businesses come up against and how they are overcome. Successful businesses will need to learn and adapt quickly to external pressures in this dynamic industry and first-hand experience in this will be invaluable.
- Understand the market
Do not assume that what works in one territory will work in another. When you are targeting new markets, domestically or globally, analyse the nuances of those markets. Take into account local considerations and speak to people who have successfully navigated exports whether that is baby food to China or popcorn to airlines (as our panellists have). For example, one market may be more concerned about environmental issues and another less so – do your research and be ready to meet those requirements. There will be countless pitfalls you won’t have thought of and cutting corners or making assumptions could cost you dearly.
- Love your product!
It seems simple but our panellists all agreed that having a passion for your product really does come across in everything that you do, particularly (and crucially) in your pitches to investors or suppliers. Make sure you surround yourself with advisors and colleagues who share your passion for your new craft beer or vegan marshmallows – this passion is infectious and the positivity will shine through in everything that you do and to everyone you do business with.
Be positive in the face of a crowded market – don’t be afraid to launch just because there are other similar products already out there. If you have a great product and have enthusiasm to boot then you can carve your own niche and make your business a success. Equally, if you find a gap in the market and can exploit it with gusto, you will catch the interest of those all important supermarket buyers.
- Simplicity is key
Can you explain your brand in 2 minutes? Being able to simply define your brand will make it easier for investors, distributors and customers to understand what you’re offering. The best brands can be summarised very easily and a simple relevant brand is the most attractive – you aren’t going to have long to catch the interest of your listeners so you need to be clear and to the point about why your product is great. Your pitch should be short and sharp and always make sure to have your deck ready to go. You never know where the next opportunity might arise.
- Push for a trial period – be prepared to take a hit short term and don’t take no for an answer!
With these small, but successful, trial runs it is easy to illustrate the scale-ability to other potential retailers with real, successful examples. Where you have had success in the past be sure to point to that in your conversation with the next retailer.
Be prepared to pick up the phone and speak to people. Build a rapport with your contacts and don’t take no for an answer. You want to be front of mind when decisions are made.
- Protect your Intellectual Property (IP)
Investors commonly hear from a business that all of the relevant IP has been protected but due diligence then reveals otherwise, which is a big red flag and could torpedo a proposed deal because it leaves the business vulnerable to a third party acquiring a conflicting right. An initial early investment will improve the value of your business in the eyes of investors and will give you strong grounds to prevent competitors adopting conflicting names.
Do not underestimate the value of protecting your IP – make sure you ask the right questions and seek legal advice early on. IP protection goes beyond your trade mark or logo, extending to the product packaging, copyright in the website content or recipes and even the shape of the product itself. Make your IP work for you and if it’s not appropriate to seek protection, know why – investors will ask.
GJE is a leading firm of patent and trade mark attorneys with a sector focus on food and drink. For more information on how we can support your food and drinks brands please contact either Ed or Alice at Edward.Carstairs@gje.com or Alice.Anderson@gje.com