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HUNGRY is the podcast for Challenger Food and Drink brands wanting to pour gasoline on their growth. Fancy being kind? Want to feel warm inside? Please hit the Subscribe button. You’d really, really make my week.
Dan Pope
So I read somewhere where you said linking purpose with exit and valuation. Talk to me about that. Because in my head, there's a dichotomy to those things. And I think there's a lot of waffle about people saying that they want to not exit their business and build a brand, but like, let's just cut the bullshit.
00:00:47:22 - 00:00:51:01
Dan Pope
Like, everyone wants an exit at some point.
00:00:51:03 - 00:01:23:04
Jon Walsh
Yeah, I so I think that was the Bread and Jam Investor Festival last week, and I—I suppose I had two really simple points to make: one of which is the importance of purpose, and secondly, how actually, if you do run your business the right way, you know, with an eye to exit valuation at the end, that actually helps you deliver your purpose because you need a well-run business in order to deliver your purpose.
00:01:23:04 - 00:01:43:03
Jon Walsh
And I—I used a couple of examples and I think we are one. I'll talk about us in a moment. You know, I think Pip & Nut, what she's doing—not only how she's always run the business, but, you know, now with the foundation, etc. It's—it's fantastic. So—so I suppose that we talk about purpose and by the way, maybe I should just, you know, is one of my subtle plugs then.
00:01:43:03 - 00:02:08:20
Jon Walsh
But for people who don't know us, then here we are: Bio&Me. We do granolas and kefirs. The key thing about us is my co-founder, Dr. Megan Rossi. She's "The Gut Health Doctor." So if we're talking about purpose, she gives us our purpose. You know, when I first met Megan six or seven years ago, you know, she's one of, if not the leading expert on gut health in the country.
00:02:08:20 - 00:02:28:10
Jon Walsh
So our purpose was always there from the get-go. And I think it's one of our kind of not secret advantages, if you like, is we've always known what gets us out of bed in the morning. We've always known what we would never compromise on. You know, it's lovely that the team is up to about 18 people now.
00:02:28:12 - 00:02:54:22
Jon Walsh
You know, and—you know, they join because, you know, they want to work on a gut health brand. There's no confusion about it. You know, Megan still designs all the products herself. So does the social media, etc. You know, what really, really gets her going is gut health education. So the fact that right now—I mean, we've been at this for five, six years—you know, gut health is really having a moment now.
00:02:54:22 - 00:03:18:20
Jon Walsh
It's—it's fantastic. You know, if we're just talking about weight loss, it's actually, you know, the fact that, you know, fiber is like, you know, the natural GLP-1 for satiation. It's all—all coming through now as just wonderful. So we've always had that purpose and—and it drives us. And honestly, it gets me out of bed and I—I flipping love it.
00:03:18:22 - 00:03:38:02
Jon Walsh
And we've got to run our business profitably. So if it was three or four years ago, Dan, when we last spoke, we were probably about, I don't know, 2 million turnover, maybe three. We—now our run rate—so to use a lovely phrase, our quarterly annualized run rate is now at about 20 million. So we've just sort of got up to that mark.
00:03:38:02 - 00:03:43:24
Dan Pope
So—so when you say run rate 3 million, that mean—that means you've got 20 mil? What does that mean?
00:03:44:01 - 00:03:52:04
Jon Walsh
So the last—last quarter, the last three months, if you just extrapolated that out over a year, it’d be 20 million. So that's what—so I think...
00:03:52:08 - 00:03:56:24
Dan Pope
That basically means that's how much you've got—got left until you run out, essentially.
00:03:57:01 - 00:04:18:08
Jon Walsh
No, no, no, no. So if you look at our annual sales last year, they were about sort of 13, 14 million. But we left last quarter—we exited Q4 at a 20 million run rate. Because what you want to see is quarter-on-quarter growth. So you grow throughout the year. So we did about, yeah, 13–14 million sales total last year.
00:04:18:08 - 00:04:20:21
Jon Walsh
And we exited Q4 at a 20 million run rate.
00:04:20:24 - 00:04:24:12
Dan Pope
So when you say exit, like—not exit the business, just left that finished.
00:04:24:12 - 00:04:40:21
Jon Walsh
No, no, no, just that right now we track all—we put one this year and—yeah, so—so—so—so sales are really good, you know? And that links back to the purpose, you know. So our whole raison d'être is to be the very best to figure out how, you know, so long as you've got the right trend.
00:04:40:21 - 00:05:03:16
Jon Walsh
It is wonderful seeing gut health having its moment now. Hopefully, you know, that—that gives you your sales. But obviously, you know, then you've got to run the business the right way. I think with the team, it's just so important. If I've learned one thing in the last few years is—I mean, again, Dan, when we last met, I probably knew every fact in the business, you know, sales rates...
00:05:03:16 - 00:05:20:22
Jon Walsh
For every customer, the cost of every product. I was still doing the consumer emails myself. You know, I—I've done every job in the business. Now I sort of get a little bit pleased about how much I've forgotten. You know, when people ask me questions and I don't know the answer, I rather like it because it means somebody else in the business does.
00:05:20:22 - 00:05:42:04
Jon Walsh
So, you know, there's some of those things about—well, we've just—we just finished a two-day exec, you know, and our Commercial Director, she was talking about new listings that we'd won. I didn't know about them. You know, she was talking to me about some competitive price changes in the marketplace. You know, a couple of our competitors on granolas put their prices up.
00:05:42:04 - 00:05:59:09
Jon Walsh
I didn't know about that. You know, it's—it's... and it pleases me because before, you know, it was not like I was a one-man band—we were probably four or five people back then. We all knew everything. And now we sort of grow in the different parts of the business. And, you know, they—you know, ops runs their part, finance runs theirs, marketing runs theirs. It's wonderful, like, seeing people grow and that lovely word about delegation where, of course, you delegate and you've got to trust. But also there is that piece about trust being—so, you know, if we've got to trust people, they've got to prove it as well. Know—know their game, know their numbers, know what they're talking about.
00:06:21:07 - 00:06:46:05
Jon Walsh
So they know more than I do. And it's—it's brilliant. I mean, honestly, just—and again, you know, linking that—you know, so to build—to build the business to be valuable, you've got to run the team in the right way, which links back to purpose. The other thing I think, Dan, you've got to do is—is at some stage, and we are six years now, but you've got to move into profit.
00:06:46:07 - 00:06:57:24
Jon Walsh
And not big profit. But if you want to be a sustainable business, that means two things: that's the environmental piece and it's the financial piece. You know, if you want to—if we want to exist forever.
00:06:57:24 - 00:07:25:20
Dan Pope
What have you done? Yeah. But also linking—is linking that to the exit—is that people want to see all this. What, Jon? Yeah, I want to see EBITDA now. So you need to start thinking about that. Say let's not beat around the bush—you want an exit in four, five, six years. What have you been doing from a cost perspective, a team perspective, a marketing perspective, to dance—to dance between growing your business and also making profit?
00:07:25:20 - 00:07:29:01
Dan Pope
Because that's a delicate dance.
00:07:29:03 - 00:07:50:04
Jon Walsh
It is a delicate dance. And you know, I—and I'll come on and answer your question, Dan, in a sec. But—but it really is important because, you know, Megan wants to deliver the best health products to—to consumers. We can't—you can't lose money forever. You can't keep selling equity forever. So if we're going to keep delivering those, you do need to move into profit.
00:07:50:04 - 00:07:54:08
Dan Pope
And you say selling quickly, is that—is that raising money?
00:07:54:10 - 00:08:18:05
Jon Walsh
Yeah, sure. Exactly. So for the first five years, when we lost money, we funded that by selling—selling shares in the company, selling equity. Right? And now we haven't done—done that for about two and a half years. And we moved into profit halfway through last year. Not, you know, small profit—like, all the extra margin we make, we want to invest into growth, into marketing, into the team, etc.
00:08:18:05 - 00:08:38:07
Jon Walsh
But—but just enough so that we're all now in the black. A sustainable business, you know, we can keep going, going, going forwards. And I tell you one of the things that pleased me the most, because I thought the team might—I'd be completely open with the team about it all—I thought they might be a bit, "Oh, now I'm not going to have as much to spend on marketing. I'm not going to have enough to spend on NPD" or whatever. You know what? The customers, whatever it might be. Actually, they loved it because they get it. They're like, "Of course. Like, it's fine in the investment phase to—to raise funds and invest and, and, you know, lose money for X number of years." But they know that to be a real business, you do need to move into the black at some point.
00:09:01:05 - 00:09:11:22
Jon Walsh
So, you know, and it's—it means for them, you know, it's sustainable. Their jobs are more secure. You know, you know. And at—at that level, they were really, really into it. It was wonderful. So if you are...
00:09:11:22 - 00:09:16:01
Dan Pope
Listening—so what did you—what did you do? What did you do to make—to get it profitable, then?
00:09:16:02 - 00:09:34:18
Jon Walsh
Yeah. Sorry, I'm taking a long time to answer your question. Also, oh yeah. So—so growing really helps us. And I think one of the things we've—I've enjoyed over the last few years, I know, Dan, we had a chat about co-mans before, but—but as you scale, you know, working with your co-man partners because, you know, they've taken...
00:09:34:21 - 00:09:37:12
Dan Pope
Just—just co-man's, co-manufacturer. Okay.
00:09:37:12 - 00:10:19:24
Jon Walsh
I mean, yeah, yeah, yeah. So we—all the different products we make, we make through expert manufacturers: some down in Dorset, some in Snowdonia, some up in Yorkshire. And as you grow, you know, that enables everybody to buy packaging cheaper, ingredients cheaper, run longer, more efficient shifts. So working out how the benefits of that—you know, some of it comes to us so that, you know, watching all this time of inflation, we haven't had to put cost prices through like—like competition had to. Some of it goes to the co-man to reward them because, you know, I think one thing founders sometimes forget, but they're—those co-manufacturers are some of the—they take some of the biggest risks on you. I remember our very first—our very first granola manufacturer. You know, he put all that time and effort in based on just meeting Megan and myself. He went about 70 grand into the red. You know, if we'd gone pop after the first two or three months. But so much time and so much money. And so, you know, they—they too...
00:10:41:24 - 00:10:46:22
Dan Pope
Put that money in. Yeah. How did you convince him to put that much money in?
00:10:46:24 - 00:11:02:02
Jon Walsh
Oh, that was mainly Megan, wasn't it? Of course. Like, you know, he could see—I did... I, we... Well, I tell you what I did. Yeah, I got in my car and drove down to see him. And I think, you know, just good old-fashioned going and meeting people, you know, where we had a recipe. We took him the recipe.
00:11:02:02 - 00:11:25:10
Jon Walsh
He talked to us about how he could improve it. You know, it is a very personal relationship. And I—you know, I think... Yeah. I mean, love you—love UK manufacturer, as I say. So—so working with them in order to share—share the benefits of growth really helps. You know, on the customer side, we invest a lot with customers on customer-specific NPD.
00:11:25:12 - 00:11:46:14
Jon Walsh
We invest a lot in kind of in-store activation. But one thing we've been able to reduce is—is our promotions. So as our sales go up, you can reduce the percentage we spend on inflated promotions each year, whether that's doing a few less promotions or shallower promotions—the discount is less deep. You know, finessing that. It's one of the things...
00:11:46:14 - 00:12:00:07
Jon Walsh
Giles—Giles Brook, who is our chair, is very hot on—is, you know, you can—there is, you know, if not millions of pounds, there's hundreds of thousands of pounds there in terms of costs to the business.
00:12:00:09 - 00:12:20:12
Dan Pope
What are the other little things you can finesse? Because what—what size is the brand now, if you don't mind me asking? 20 million. 20 million. Okay, so you said—fuck me, that's insane. So what are the others? So—so I like the idea of just being very supple and delicate with how you—you know, you do more promotions, less promotions.
00:12:20:14 - 00:12:33:07
Dan Pope
Yeah, more shallow ones. The co-manufacturer, like sharing the money with them, having them on board. What are the other little fine—fine things that you've just picked up through experience?
00:12:33:09 - 00:12:53:12
Jon Walsh
So one that we haven't done, but—but—but—but, you know, people can think about is—is adjusting your products over time. So I think "shrinkflation" is a very famous thing. But you know, we've seen quite a lot of brands who are in smaller packs right now. So that—that is an option we—we've chosen not to do.
00:12:53:12 - 00:13:02:12
Dan Pope
It, but somewhere that's just conning the customer, though? I mean, the consumer, in my head, is—I mean...
00:13:02:14 - 00:13:24:22
Jon Walsh
I mean, you're faced with—I mean, if you think back, again, over the last four years, that our cost of goods have gone up about 30 to 40%. I think back to the energy crisis, the Ukraine war... you know, no idea how important Ukraine was to the world economy in terms of grains, etc. You know, it's put—it's put a lot of brands, including us, in a very difficult position.
00:13:24:22 - 00:13:46:04
Jon Walsh
Now, we—we were lucky because we were growing so damn fast. We've gone from like two or 3 million to 20. You know, huge economies of scale. That meant we could offset. But you know, honestly, I don't know: would—would a consumer rather spend a pound a pack more or have a pack that was 15, 20% smaller? Like, you know, there were—there were real choices that we made.
00:13:46:06 - 00:13:52:20
Jon Walsh
What you shouldn't do is hide it. You know, if—if you do need to go smaller, you need to be transparent about that.
00:13:52:20 - 00:13:58:07
Dan Pope
But so yeah, I like the idea of an honest—no, just honest marketing.
00:13:59:02 - 00:14:17:05
Dan Pope
Just honest marketing is, yeah, it's James Smith's thing, which is being just brutally honest with your consumers. And then again, I've talked about it with Rory, and there's a restaurant in—in, where we did one of the supper clubs actually, down in Bristol: Sonny Stores. Guys are legends.
00:14:17:07 - 00:14:34:03
Dan Pope
And he put a memo out on his newsletter being like, "It's the last thing I want to do, but we are moving to—moving to, like, you know, pay—pay on your phone with the QR code." Yeah. Which I think is the most, you know, hideous thing you can do in a restaurant. Kills every little smidge of soul.
00:14:34:05 - 00:14:39:02
Dan Pope
But he was honest, and he sent it to his newsletter. "This is the situation, mate. We're doing this."
00:14:39:02 - 00:14:41:10
Jon Walsh
And why they had to do it. Do you remember?
00:14:41:12 - 00:15:09:13
Dan Pope
Because just hospitality... obviously the podcast kind of straddles both FMCG and hospitality, but they—basically hospitality is a—a raving shitshow at the minute in the sense that there's just no money in it at all. Like, literally no money. No. And—and so we get, yeah, lowest of costs and—and actually, you know, again it's like—that's why I say these subtle things because it's the: do you have more staff and then buy less quality produce?
00:15:09:15 - 00:15:18:20
Dan Pope
You know? So it's—it's that constant thing. I love that. So promotion finesse, shrinkflation finesse. What are the other finesses?
00:15:18:22 - 00:15:39:07
Jon Walsh
I mean, you can look at—if you work your way down the P&L, I mean, you know, so we've done price increases, we've done—done, you know, sizing. You know, you can change your ingredients. You know, Mark—one thing we have done... so Mark, who's our—our CEO, you know, he relentlessly searches the globe for different suppliers of the ingredients to the standards we need.
00:15:39:07 - 00:16:00:18
Jon Walsh
So in each of our products, we've got about 15 different nuts, seeds, fruits, etc. So, you know, he can be endlessly sort of scouring around trying to find... So they're changing your suppliers—I hate to say it to suppliers—but you know, that, you know, sometimes you have to do that. We've done that on packaging. You know, that is just the relentless grind.
00:16:00:20 - 00:16:20:16
Jon Walsh
We did take a look at transport. But crikey, you know, all the energy, etc. You know, just try saving money there—it's—it's very, very difficult. So those are the main areas. And then as you grow, of course, if you—if you look at the team cost... so we've increased our team a lot. I think I said we're at about 18 people now.
00:16:20:22 - 00:16:43:11
Jon Walsh
But as a percentage on the P&L now, because we've grown sales faster, it's—it's coming down. So you're becoming more and more efficient. But—but you know, but growing the team both in terms of investing and training, growing the size... so we plan to bring another six people in this year. We've just brought in three new people. You know, that's—that's—that's—that's how we grow.
00:16:43:11 - 00:16:47:03
Jon Walsh
You know, we need to do more. And that means we need more people.
00:16:47:05 - 00:17:05:24
Dan Pope
The—Giles—vividly I remember him saying that, you know, the size of the team can be a swinging dick contest when you go around lunches like, "We're at four." It used to be, Giles... yeah. And Giles saying to me, "Mate," he's like... he was like, "You know, if I've seen..." I think he said 60 million pound businesses with eight people.
00:17:06:03 - 00:17:34:20
Dan Pope
I've seen 60 million pound businesses with these numbers—maybe slightly off—about 70 people. And he was like, "You use for you guys is a darling example of how you keep costs down today." When you're basically—what are you just saying? Like, you know, there's—again, the whole—the whole thing with this end of brands is—I think there's this—this "Shoreditch House-ification" of brand building where it's like, you want to go into Shoreditch House, say you've got an office in Shoreditch, wear your fedora hat, tell people how big your team is, but you're not actually making any profit and it's just all gums.
00:17:34:22 - 00:18:10:18
Dan Pope
Whereas Giles is like, "Look, why don't you go look..." Like you guys based up in Chester, you know. What is—a vodka, a base? So out in Wales, so short-based in Nottingham... the—the of the overheads are much cheaper. And as you say, it's that percentage of—of revenue is—is—is—is fascinating. What were the crucial hires or surprising hires that took you from 2 million when we last spoke—spoke—spoke to—to—to 20 million now? Like, what was it—one or two that had a massive impact?
00:18:10:20 - 00:18:28:23
Jon Walsh
I mean, I'm not sure it's one or two, Dan, but I—I mean, it is sort of the obvious ones. So we have increased our sales team a lot. So this gives me a great chance to—to big up a few members of the team, doesn't it? But—but Emma and—and the sales team... yeah, that's now the largest team in the business.
00:18:29:01 - 00:18:54:03
Jon Walsh
And you'd want it to be, you know, all on stage. And I think because we've got this whole broad product range and we've got our granolas and our porridge pots and our overnight oats and our bars—which are all ambient long shelf-life products—and then we've got our kefirs, which are yogurts and drinks in the chiller... they are completely different buyers, completely different supply chains, completely different competitors.
00:18:54:05 - 00:19:11:14
Jon Walsh
So for a salesperson to try and think about both categories is quite difficult to be as close as, like, a brand that just makes one category, one product. So—so it's sort of—we've created a team of chilled specialists and—and—and cereal ambient specialists and that's really working for us.
00:19:11:14 - 00:19:37:11
Dan Pope
So I says just on that—so Giles said to me, this was two years ago now or last year... last year was with innovation: "Innovate close to the core." So—so—so for example, when—so always innovate close to the core range. The example he gave was when, you know, Innocent tried to—tried to exit to Coca-Cola and they built all these—all these Veg Pots or the soup businesses, which is now BOL...
00:19:37:11 - 00:19:38:20
Jon Walsh
Oh yeah. Okay.
00:19:38:22 - 00:19:53:20
Dan Pope
And he was like, "Well that," he goes, "yeah, but which became BOL." And he was like, "The biggest lesson from that is innovate close to the core." If you're going to innovate, you know, do a different flavor of peanut butter, do a different flavor of granola, do a different flavor of beer. Because when you go to exit, that's—people want to buy that.
00:19:53:20 - 00:20:07:12
Dan Pope
And you gave the example of Lotus who bought Bear... back of Bear, whatever it is. And he was like, "They were only—only interested in the fruit rolls. All the other parts of the business they weren't interested." So you're a granola bit...
00:20:07:13 - 00:20:09:17
Jon Walsh
I think it's true, yes.
00:20:09:19 - 00:20:22:15
Dan Pope
Say, your granola business—surely it's... How come you're going into different categories within fresh or chilled with different buyers, different consumers? Like, what's—what's—what's—the thinking behind that?
00:20:22:17 - 00:20:41:14
Jon Walsh
So funnily enough, I—it sounds like a list of my recent talks there, but I did one at the Tesco Accelerator event a couple of weeks ago. We should talk about the role of customers and, like, amazing what they've been doing. And they asked me to talk about cross-category growth—so brands going into other categories.
00:20:41:14 - 00:21:04:15
Jon Walsh
And basically, my first slide was: "Don't." You know, unless you absolutely have to, you know. Or say positively: if you can achieve all of your hopes and dreams—the scale, the vision for your brand—if you can do all of that through one category, you will make your life so much simpler, way more efficient. You know, back to purpose and valuation.
00:21:04:15 - 00:21:24:24
Jon Walsh
You know, if you—if you can do your purpose through that one category, you will probably drive it to a higher valuation. But just like you were saying about Giles, the example with Bear—Bear Snacks—but for us, we—it was strategically critical to be in two categories. So without doing too much science—this is really Dr. Megan's area.
00:21:24:24 - 00:21:48:22
Jon Walsh
But you did as, you know, Dan the human being. There are—there are two things you need to do for your gut health: one of which is eat more, diversify. But it's funny, but it's really having its moment right now. So... and that—the—the fiber, the different plant fibers go into your tummy, they get broken down at the—they don't feed the bacteria inside your stomach... in its most simple. And that has all the associated health—that—health benefits: physical, mental, the gut-brain axis, etc. And that's what the fiber does—that our cereals and our bars does. And then there are fermented products, so in our case, kefir, which have the live and active bacteria in them. So this is where you can sort of top up the bacteria inside you with specific live and active cultures that are known to give specific health benefits.
00:22:17:12 - 00:22:32:19
Jon Walsh
So that's what's in our kefirs. So if we want to be the leading UK health brand, if that's our purpose, we've kind of got to be in both. We've got to be both feeding the bacteria and topping them up. So that's enough for that.
00:22:32:19 - 00:22:52:05
Dan Pope
So that links—so—so just quickly. So that links again... I love nuance, right? So that links to what we're saying at the beginning: purpose—brand purpose—with, yeah, exit. And so it's like, "Okay, if we are going to go cross-category, is this some—is this right for our consumer?" Is that—that's—essentially what you're saying?
00:22:52:05 - 00:23:14:19
Dan Pope
So if you were to go into fucking, you know, like... I think, like butter or something like that. Like, that is just—that's too much of a crazy distraction. But if it aligns with your consumer's shopping mission, i.e., they're going to go in and they may—they may be buying... You may be able to see from the data that pre-launch in kefir that they were going and buying Bio&Me granola and then X other brand kefir. So you're like, "We may as well go there." Is that essentially what you're saying?
00:23:20:08 - 00:23:30:16
Jon Walsh
I think there may be a slightly different way of looking at it, maybe. I think in terms of going back to purpose, if—if you know that that whole thing for us to be, you know...
00:23:30:18 - 00:23:44:14
Dan Pope
I—it's like—I get the purpose, I get the purpose bit, but I mean one where I'm trying to sort of bridge this—this—is how you looked at it through a commercial lens? Because as you said, you know, you... yeah, exactly.
00:23:44:16 - 00:24:03:00
Jon Walsh
So I think the choice of which categories we went into came from our purpose. Then once you've decided to go into those two, then you go to slide right: How am I going to win? So what's the consumer looking for in granola? What's the consumer looking for in kefir? What can we do better than our competitors?
00:24:03:06 - 00:24:24:16
Jon Walsh
You know, is it around flavors? Is it around health? You know, what—what—what is going to give us... what's going to justify our space on the shelf? Because we can't just turn up and be the same as somebody else. You know, where—where if we're going to be the best at something, if we're going to have a small but justifiable premium because of all our ingredients, we've got to be doing something better.
00:24:24:18 - 00:24:41:22
Jon Walsh
So that's—so I think that's where the consumer piece comes in. The choice of categories, I think, is more internal, purpose-driven. Like, what are we all about? That's our choice. But then when you go there, yeah, it's like: What is the consumer looking for in those categories?
00:24:41:24 - 00:24:46:20
Dan Pope
And how did you make sure you were better and different?
00:24:46:22 - 00:25:09:13
Jon Walsh
I think that's probably where Megan come... Well, from a health point of view, that's where Megan comes in. So she will—oh, you know, this is where—you know, and I love all the research is coming through, all the signs pointing in the same direction. She says very similar—not exactly the same, very similar—to Tim Spector and the other—other songs that they're all based on science and the research.
00:25:09:13 - 00:25:27:22
Jon Walsh
So she brings that. So in the case of all granolas, we have more different plant-based fibers than anybody else. We've got about 15; others have about 6 or 7. It's that sort of level. On the kefirs, we have more live and active cultures. We've got about 400 billion in ours; others have between about 30 to 100.
00:25:27:22 - 00:26:00:20
Jon Walsh
So we just have more. So you can—you work it through from the gut health science point of view. But then, in truth, the consumer sort of expects that, and they know Megan's done—done the hard work there. What—what they want to know is: does it taste nice? You know, that's—you know, we talked about this before, but if you're going to be a health brand, you've got to get that balance right between... you know, people will try you because they want the new benefit—the gut health benefit—but they'll keep coming back because you taste nice.
00:26:00:20 - 00:26:17:00
Jon Walsh
Food should be a pleasure. You know, if you—if you make people compromise on—on taste, you'll lose them. I mean, you know, you'll keep a very small group of consumers who are prepared to compromise. But most—they want to, you know, they want the taste and the health at the same time.
00:26:17:02 - 00:26:24:16
Dan Pope
And—and what's the art of managing cross-categories across multiple retailers? Anything you could speak to that?
00:26:24:18 - 00:26:48:14
Jon Walsh
Bloody hard work. I—yeah, I—I mean, this is—I think we started... we jumped on this part of the conversation because I was saying how it sort of almost not quite the sort of—sort of split the sales team into two—to have Team Chilled and Team Ambient. And, you know, that's really helped, you know, and that's allowed them to be really close to—to their group of buyers.
00:26:48:14 - 00:27:12:04
Jon Walsh
And I—I mean, again, that is helpful thinking about this over the last four years. You know, my gosh, have the retailers got into challenger brands over the last four or five years? I think before that, talking to some of the buyers who have, you know, who've been in position for quite a long time, they—they had a real nervousness around challenger brands because they were being let down on a supply point of view all the time.
00:27:12:04 - 00:27:38:18
Jon Walsh
And, you know, brands were making big promises, but there was really only a very small number who delivered—you know, the Innocents like you were talking earlier, or Bear, big names. Whereas now, I think they realize challenger brands—you know, we're delivering the growth and they can help them differentiate. So my gosh, have they swung! You know, Sainsbury's had the Future Brands program, Tesco the Accelerator, Ocado "Roots"—I’ve just become a Roots champion, actually.
00:27:38:18 - 00:27:51:00
Jon Walsh
I'm really excited about it. You know, out-of-home... Brakes are doing their programs, the Accelerator, Co-op's got the "Up-A-Road." You know, it's—it's brilliant. Like, oh my gosh, has there...
00:27:51:01 - 00:28:11:19
Dan Pope
Has—I mean, I see... oh, I read this, I read a thing the other day saying—well, I've written a piece about it called... and it's a quote by Morgan Housel, who wrote *The Psychology of Money* and I think the other one, *Same as Ever* or something—really good book. And he goes: "You can only understand the golden ages in retrospect."
00:28:11:21 - 00:28:33:21
Dan Pope
So it's like, you know, we may look back at the '80s in New York like that was the period everyone made loads of money. We may—may look back at the, you know, in the oil era of the, you know, 1900s when everyone was making money in oil. I believe in 200 years' time, people look back and be like, especially in the UK, "This was the greatest time to build a challenger brand."
00:28:33:23 - 00:28:48:17
Dan Pope
So, I mean, as we look back at the '90s and say that was the—that was the best time for—for—not for—like sort of Britpop of music, music content. And that's why it really winds me up when people are like, "Oh, it's so hard, it's so hard." I'm like: "Mate, something easier?" 15, 20 years ago, you didn't have LinkedIn to just DM a buyer.
00:28:48:22 - 00:29:10:03
Dan Pope
20, 10 years ago, you didn't have any of these. I mean, when I started Hungry Life, which was 10—bang on 10 years ago now—there were no—none of these programs. There weren't these communities. You know, it's—it's really hard, don't get me wrong. But it's never been easier. And I feel like if you just think, "This is the golden time, this is the golden age," you just become way more positive.
00:29:10:04 - 00:29:33:04
Jon Walsh
Jimmy, honestly, it's one of my favorite things. It's why—it's why—it's why I was up for the talk last week and then the Tesco event and here... like, it—it is astonishing. It's almost—you know, it's ridiculously brilliant quite how supportive the startup community is. I mean, look at what you're doing now, like, you know, how far you've come in the last few years.
00:29:33:04 - 00:29:58:24
Jon Walsh
Like, the amount people are so open. I mean, I'm telling all my secrets today, but like, people just they go... all the Bio&Me founders—I mean, I know—I know the Pip & Nut founders, like the Net Ops ones. And, you know, people are just really, really trying to help each other because I think, yeah, the startup, challenger brand, scaling brand, whatever—they know we—you get far more from helping each other than you do by sort of dragging you—you see.
00:29:59:01 - 00:30:01:09
Jon Walsh
Yeah. You know, it's amazing.
00:30:02:08 - 00:30:29:00
Dan Pope
This guy who owns Bocca di Lupo—big Italian in—in London. He's—he's part of the Cambridge Tech community, he's like a billionaire, Dom. And he basically—it's the idea of "coopetition." So it's competition and cooperation together. And I feel like, you know, again, you're against each other, but you're also actually helping each other out. I noticed this when we did a supper club. Low Rise Beer sat right next to Local Beer—my two mates—they're having a chocolate pudding and a couple of beers. They're literally competitors, but they're having jokes and banter. Like, it's so sad. On the—on the secrets... so we've done that. We've done the fine finesses of how you cut profit. So I made profit by cutting costs.
00:30:44:21 - 00:30:47:20
Jon Walsh
You did? Yeah, yeah, yeah, yeah. Stop losing money.
00:30:47:22 - 00:31:03:00
Dan Pope
What are the big one to three levers you did to—to hit 20 mil? First thing, second thing... what are the subtle finesse nuances that helps you hit 20 mil? Let's start with sort of the big rocks. Then we can move to the pebbles.
00:31:03:02 - 00:31:08:19
Jon Walsh
Oh, Dan, you don't ask for some questions! I, oh, sorry, I...
00:31:08:21 - 00:31:09:24
Dan Pope
I said...
00:31:10:01 - 00:31:34:03
Jon Walsh
I mean, here's what comes into my mind. So I suppose number one is our ranges. So if I, you know, thinking back four years ago, we probably had about, I don't know, eight, nine, ten SKUs. We've now got over 40. So, you know, getting—getting that range done, you know, has undoubtedly been a big part of our growth.
00:31:34:05 - 00:31:53:04
Jon Walsh
I think, honestly, one of the best bits of advice I can—you just love your customers and get really close to your customers. You know, just... we have had such—well, we have had such support and, you know, to Emma and the sales team's credit for this year. I think we've just worked very, very hard.
00:31:53:04 - 00:32:16:20
Jon Walsh
You know, I might say harder than they know then. I mean, it is a bit of a competition. So, you know, in order to—to get great results to the retailers that they want to support us. You know, it's—it's a virtuous circle if you get it right. And we worked really hard at that. And I would—I would say to your early startups: focus on that more than pure-play marketing.
00:32:16:22 - 00:32:29:13
Dan Pope
So—so when just that... let's walk into the sort of fields of nuance here. The—these are like core-play marketing versus getting close to your customer. How are they different?
00:32:29:15 - 00:32:52:01
Jon Walsh
Yeah. So—so I think probably the easiest way to explain it is I would just stay as close to the point of sale as you possibly can at the start. So anything you can do to influence your rate of sale, build your brand at the point of sale is going to be more efficient at the start. Whereas the further away you go...
00:32:52:03 - 00:33:20:15
Jon Walsh
So, you know, billboards, TV, radio, social media... Well, social media, you can—you can get very close to point of purchase as well. But, you know, the further away you go from the point of purchase, the bigger the brand you really need to be already in order to—to make that work. So—so—so with our marketing, which would be the third lead—third big lever, which is led by Mike, you know, that—that's... we stay really, really close.
00:33:20:15 - 00:33:43:20
Jon Walsh
So, you know, one of the things we love the most is when we can do what they call FSDUs—Free Standing Display Units—the big bits of cardboard that you can put your stock in. Because that lets you do an advert on one side and your stock in the middle. I mean, that is the dream startup marketing, where if you can do that, you're...
00:33:43:20 - 00:33:46:13
Dan Pope
Getting—and you're getting secondary space as well.
00:33:46:15 - 00:33:48:20
Jon Walsh
Yeah, I mean just think... but...
00:33:49:00 - 00:33:53:05
Dan Pope
Triple—triple whammy. What's so... okay, so—so this is a boost to done.
00:33:53:05 - 00:34:12:23
Jon Walsh
So you know when you talk about nuances and money, you know do you know what, like, a couple of hundred of those costs like? Well, you know, you want to get to three, 400 Tescos. Just what the—the cardboard costs about 15, 20,000 pounds. Like, it’s mad how much they cost. So that's a big investment. But you'll get it back because of the incremental sales.
00:34:12:23 - 00:34:20:18
Jon Walsh
Whereas if you do 20,000 pounds worth of billboards around London, you know, maybe. But on the other hand, maybe not.
00:34:20:20 - 00:34:29:08
Dan Pope
Okay. This is beautiful. So proximity to purchase is a big rock. Any other big rocks?
00:34:29:10 - 00:35:08:20
Jon Walsh
So—so we've done ranging, we've done sales linking to customers. And I think number three is—is the marketing investment. But—but keep it as close to the point of sale. You know, I don't know if we've got sort of almost like almost sort of performance marketing versus pure brand building. You know, I heard the—I forgot his name rather personally—but the founder from Olipop in the States, you know, he's probably being a bit provocative, but he was saying you shouldn't be doing consumer, you know, pure-play, broadcast media until you're over 100 million. You know, like, you know, really it's more like to use one set of tactics to build the brand and then another set of tactics to maintain it. And that broad-scale media is almost more maintenance than it is building.
00:35:19:03 - 00:35:22:08
Dan Pope
Maintenance versus building. That's such a gorgeous way of putting it.
00:35:22:10 - 00:35:24:21
Jon Walsh
The my...
00:35:24:23 - 00:35:32:23
Dan Pope
Yeah, yeah. No. But anyway, fuck it. I mean, everything's bastardized, isn't it? I think it's a David Bowie quote: "The only art I'll ever sully is the art I can seal off everything."
00:35:33:00 - 00:36:04:16
Jon Walsh
Like, should I tell you what... I should credit him now because I'm lucky enough. One of our—our investors... he's an old Procter & Gamble friend of mine, but Greg—Greg Jackson from Octopus Energy. And he was talking to me, actually, he was talking to me about people and the kinds of people you build. You bring in who—who build brands versus maintain them, whether it's, you know, or the finance or the sales or the operations, whatever it might be, architect, whatever it might be. The people who build are different to the ones who then maintain, and it's a different mindset.
00:36:04:18 - 00:36:32:04
Dan Pope
The—100%. So okay. And then so—so it's late in the day, I'm a little bit tired. The—you said... yeah, yeah. What? I've... yeah. It—it may not sound like it, but my eyes are a bit fucked. So. Yeah. So we said—and then we just go back to that—said proximity of purchase. Totally get when you said getting closer to the customer that specifically... that it's just being closer to the buyer.
00:36:32:04 - 00:36:40:05
Dan Pope
That is being—understanding what their goals are. Is that creating more specific empathy for them or is it—what is that?
00:36:40:07 - 00:37:07:14
Jon Walsh
Yeah, I think at the start, the truth is it probably is all about your buyer. Yeah, buyer and supply chain. You know, just, you know, a little love to supply chain people goes a long way, really does. And getting that right and not letting people down on that is—is hugely important. But then I think we've learned over the years the benefits of extending your network inside the customers.
00:37:07:14 - 00:37:33:01
Jon Walsh
So, you know, the ranging people. So, you know, the buyer will decide which brands to have, but the ranging person will decide which stores to go into, etc. And the—demographics. Yeah. You know, you remember it's really, really—your all rates of sale are incredibly different. You know, there'll be some stores where we'll sell 60, 70 packs of granola a week and others will—will sell, you know, 3 or 4.
00:37:33:04 - 00:37:57:20
Jon Walsh
It's incredible. I did not understand the difference—is it's amazing. So ranging people are really important. Merchandising people who do sort of the in-store point of sale. You know, even finance people just... and also, you know, getting to know some more senior people. We've been lucky enough to meet some of the directors. You know, they—I think most customers are really good.
00:37:57:22 - 00:38:27:05
Jon Walsh
They empower the buyers, the—the teams, the commercial teams, they make the decisions. But having the strategic support of more senior people—directors—really helps. You know, just knowing that they're there, they've got the support. They understand, you know, the gut health journey, the importance for them. You know, Megan goes in and does talks sort of for the staff and you know, and often, you know, up at the directors' some away days or something like that.
00:38:27:05 - 00:38:31:05
Jon Walsh
And it's—it's really helpful to have their support.
00:38:31:07 - 00:38:51:01
Dan Pope
Amazing. So that's those are sort of the big rocks. What are some of the nuances or fine tuning in brand or the brand building stage which is helps you get... because, you know, people say getting to 5 million is hard. Then—then it's the ten bits is you 20 million and what, five years? Is pretty wild. Like, any specific learnings on that?
00:38:51:03 - 00:39:11:17
Jon Walsh
We obsess about our packaging a lot. I remember—I think it was Barney... is it Barney or Jason from Fuel10K—but, you know, I think he told me they iterated their packaging about 20 times. They just refined it and refined it and refined it. And we—we do that a lot. You know, I've—I've also subtly popped some behind me.
00:39:11:17 - 00:39:34:03
Jon Walsh
But you know, we're probably onto about version 10. And I know each time we sort of make a tweak, you know, it's—it's a lot of work for the team to do the changeovers etc. So—but—but each time you're just refining the messaging a bit and, you know, your packaging is your greatest piece of marketing. It really is. The—the front of pack to get those—the selling messages there, you know, the side pack to tell your story, you know, really, really matters. So I'd say, yeah, we probably changed it 11 or 12 times already. You know, just refining, refining, refining.
00:39:47:21 - 00:40:09:14
Dan Pope
So but I love that. It is—it's like a game... well, you'll—you'll—know, the picture you're painting is what I loved about Hungry Life is: it's literally a game of—if—if inches in 1% that compound. Those little bits of packaging, that very subtle dance of, you know, the—the—how often you do the promotions. Are they shallow?
00:40:09:20 - 00:40:30:03
Dan Pope
The... do you manage a bag of coffee or meeting with someone senior? Do you get in with... you know, it's there's all these little things that and it's just that constant fighting at the edge which pushes you forward. Since we last spoke, what are some of the surprising lessons or ways you've had to change sort of personally or as a leader?
00:40:30:05 - 00:40:54:23
Jon Walsh
Oh, golly. Well, I'll tell you some of the hardest decisions, which sort of links a business to people that are clear, because I think the hard decisions are always around people. Is we were talking about co-manufacturers early—earlier, and you know, and that—that first co-manufacturer I was talking about... you know, the—the sad truth is, you know, we—we outgrew them. And I hadn't really foreseen that.
00:40:54:23 - 00:41:14:05
Jon Walsh
And I hadn't really understood that there—there’d come a point where, you know, that person who's been so important to you at the start... you know, it’s about—I always compare things to relationships. I was never very good on the—the relationship side of things, Dan, and I... you know, it's like breaking up with somebody, honestly.
00:41:14:05 - 00:41:23:07
Jon Walsh
It's, you know, they're very hard conversations to say, "You know, it's not..." And it is the "Oh, you know, it's not me, it's you." But how do you... but I found those hard.
00:41:23:09 - 00:41:27:18
Dan Pope
How did you—how do you prep that conversation?
00:41:27:20 - 00:41:50:22
Jon Walsh
You know, sometimes we did it well; sometimes we did it badly. You know, again, I—I've always get in my car and go and see the person because, you know, or at least where I can, because I think, you know, there's—I don't know, maybe it's a bit old-fashioned, but, you know, a bit of respect to go and, you know, go and see them as opposed to just, you know, give them a phone call or drop them an email or whatever.
00:41:50:22 - 00:42:15:02
Jon Walsh
So—so what I have—where I—where I can, I'll go there. But you know, but in truth, we've probably changed... I just think back, I think across all our products, we probably changed the co-manufacturers... we've gone just simply because of, well, scale sometimes, quality... A couple of times we had... I mean, there's one company that now sadly doesn't exist anymore where, you know, they just couldn't get the quality right.
00:42:15:03 - 00:42:34:00
Jon Walsh
And you know, we tried and we tried and we tried, but, you know, ultimately we had to—we had to move on. But—but most of the time it's because of scale, which is a nice reason to have to move, if you like. But—but it is. You know, I get a bit emotional about these things. So—so that was—you know, that's—that's one of the big things.
00:42:34:00 - 00:42:56:12
Jon Walsh
You know, I think with the team, I think we probably—I hope not—not—not—not—not all down to me in any stretch, but—but one of the nice things about when you set up your company, Dan, is you can do it the way you want to. You know, I loved working at Procter & Gamble and Nestlé and all those places, but—but, you know, those were companies that had been going for, you know, decades and decades, if not hundreds of years.
00:42:56:12 - 00:43:17:07
Jon Walsh
So the culture was set, their ways of doing things were set. Whereas aged 48, we could set Bio&Me up in what I felt was the right way with a white sheet of paper, like completely clean. And, you know, and I think most of that is working, but it's—but there's still more that we can do. You know, there's stresses and strains in the business.
00:43:17:09 - 00:43:44:22
Jon Walsh
But, you know, I'd love to be able to smooth out... I'm sure some members of the team are happier than others. You know, I'd love to be able to sort that out. But—but the truth is—and I think this is talked about in the community, but you know better than me—it is hard work, you know. And I know there's a bit more truth maybe being spoken on LinkedIn, but as well as sort of your sort of Hoxton/Shoreditch analogy, I think a lot of people kind of like to pretend, you know, all you have to do is a few LinkedIn posts and—and off you go.
00:43:44:22 - 00:43:50:00
Jon Walsh
And it's—it is not like that. It is incredibly hard work. I mean, it really is. What's...
00:43:50:00 - 00:43:56:11
Dan Pope
What—what do you—what's—what's—the incredibly hard work that most people don't understand?
00:43:56:13 - 00:44:07:00
Jon Walsh
I think probably the intensity of it. I what I do... I work probably shorter hours than—than I did at Nestlé, but it's—but it's more... Do you work...
00:44:07:02 - 00:44:10:08
Dan Pope
What, do you work seven days a week?
00:44:10:10 - 00:44:28:22
Jon Walsh
I used to, when we started, with about the first 18 months, and I got it down to six, and now it's probably about five and a half. So I—I yeah, I’d... it's about five and a half. But—but I get in at half eight and I'm home to have kids... kids... I have dinner with my kids.
00:44:29:00 - 00:44:29:11
Jon Walsh
I don't eat...
00:44:29:11 - 00:44:32:11
Dan Pope
Like, a nice—nice—nice—fruity evening.
00:44:32:13 - 00:44:38:06
Jon Walsh
Exactly. You know, we always had to have stuff around 6:00, and I'm home for that, so, you know, injustice...
00:44:38:08 - 00:44:43:05
Dan Pope
But then I eat... but—but then it—but then are you doing work into the evening?
00:44:43:07 - 00:44:47:19
Jon Walsh
Sometimes. Like, you know, I've got my laptop on watching TV with the girls in the evening. But...
00:44:47:21 - 00:45:06:23
Dan Pope
No, because I think it's important. Because I feel like—I feel like work-life balance is a myth. And I feel like it's... and again, it's like people need to see: to get to 20 mil, you do need to do seven days a week, you know. And that's why I like how open and honest, you know, perfect...
00:45:07:00 - 00:45:27:09
Dan Pope
It's like, "No, no, no, this is like—we're always working." Because I think there is just—it's the intensity of it and just the... because I find that with this, this is a 24 over seven food... and I've spoken to other podcasters who are ahead. And so now this is a constant on, like, you can—so be present and—and see your mates, but like, I'll be editing on a Sunday to get the podcast out. So I wanted to try and, yeah, not sugarcoat it—feel like, you know, I switch off and, you know, play chess or whatever. Like, it is that relentlessness of it. What else would you say is good or bad?
00:45:42:07 - 00:45:58:13
Jon Walsh
It is a competition, you know. And if not—if not for consumers, then for space on shelf or whatever it might be. And competition does drive you on, but—but it does drive you, you know, like you've got to be very driven for it. And I—you're right.
00:45:58:15 - 00:46:20:15
Dan Pope
Yeah. Yeah, 100%. What did you—so—so that was—that was sort of the intensity of it. What other hard decisions did you have to make to unlock the 20 million pound growth? Because I think you're the—some of the hard decisions you make... and that's saying no. Going back a few steps... I what—what were those?
00:46:20:17 - 00:46:47:01
Jon Walsh
I'm quite bad. It's very narrow down. I'm not—I'm not sure. Prioritization is not one of my—my big—my big areas. I mean, I, you know, when you say it, I honestly, there's nothing particularly... you know, the big three drivers you asked about earlier, that's—that's what we focused on. You know, our NPD plan—a lot of it, when you asked about customers earlier, has been driven through the customers.
00:46:47:01 - 00:46:58:10
Jon Walsh
You know, we find out what the buyers want, so we focus on—on that. That makes a lot of sense. I... yeah, first time you've asked me a question, I'm drawing a blank. I—there’s nothing I—so good that comes to mind.
00:46:58:10 - 00:47:17:13
Dan Pope
Interesting. So when you say so you—it's interesting. So—so we had the consumer piece for the kefirs and the products and the sort of the granolas. So you then you ask the customer what they want for NPD. So say what sits at Waitrose versus Sainsbury's—and then we'll wrap this up after this, you've got to pick up kids.
00:47:17:13 - 00:47:34:17
Dan Pope
But like I do see you—you'll—you'll ask the buyer what they want. How do you make the decision between doing what's right for the buyer versus what's right for the consumer? Because they're—the, again, slightly different things.
00:47:34:19 - 00:47:56:18
Jon Walsh
Yeah. Well, here's a—here's an example: a customer I haven't mentioned so far—Waitrose. So, and it goes back to Giles's theory about innovate close to your core. So, you know, granola, granola, granola. We flipping love granola. And our expertise is in how to make it, you know, the best for gut health. But especially when you're small...
00:47:56:18 - 00:48:24:05
Jon Walsh
The buyer—the—the retailer has got far more data around flavors and flavor choices and which flavors their—their shoppers prefer. So, you know, Waitrose came to us, oh, maybe 18 months ago, maybe more recently. You know, they wanted the ginger one because ginger is particularly strong in Waitrose. It's—it’s one of theirs. Yeah, yeah, yeah. So—so it's fantastic because, you know, they're an amazing retailer.
00:48:24:05 - 00:48:47:05
Jon Walsh
That's the flavor they wanted. So we do a specific one for them. Yes, of course. You know, same for Tesco, same for Sainsbury's, etc. because they've each got their particular flavor profiles and we'll do bespoke. So it's exactly like Giles is saying: it's really close to the core. Same factory, same—a lot of very similar ingredients. But just tweaked for the individual shopper.
00:48:47:05 - 00:48:48:13
Dan Pope
What about the bars? What about the...
00:48:48:13 - 00:48:49:21
Jon Walsh
What about the bars?
00:48:49:21 - 00:49:08:24
Jon Walsh
Same. And we've only just started on bars. So we—you know, they're... we've just relaunched. And by the way, Dan, we had pure fiber bars before. We've now gone out... very complex around VAT. VAT rules get in the way. So we've now got a sort of fiber and protein bar, putting the two benefits together.
00:49:08:24 - 00:49:16:08
Jon Walsh
And that's really flying. So now we can start to get into some more flavors for customers, etc. It's really cool.
00:49:16:10 - 00:49:27:15
Dan Pope
What would you say, since 2 million when we last spoke to 20 million, are the three biggest mistakes you've made? Oh God. Oh, okay.
00:49:27:17 - 00:49:57:13
Jon Walsh
Three biggest mistakes. Right. What comes to my mind? We changed our porridge pots. We—we were—we had vegan porridge pots that were in plastic, and we went to milk-based that were in paper. I'm sorry, paper pot manufacturers, but they just didn't work. The lids didn't stick to the paper properly, etc. We had terrible damages, etcetera. So that was... not the mistake...
00:49:57:18 - 00:50:06:21
Dan Pope
The mistake there was cost in wastage. What—what was the—all of it? Scar tissue of that. Okay. Interesting. Yeah. Next one.
00:50:06:23 - 00:50:33:11
Jon Walsh
One... probably not investing enough in marketing early enough. I think, you know, if I—if I applied hindsight, would—would I—would I have grown the marketing team and put a bit more money into the marketing plan earlier? You know, it's—it’s a debate every company has. We go round and round and round. We're just getting the—the courage to invest more now.
00:50:33:11 - 00:50:34:13
Jon Walsh
So you might say...
00:50:34:16 - 00:50:40:11
Dan Pope
Is that trade—is that trade marketing or is that more, as you say, the traditional brand-building playbook?
00:50:40:13 - 00:50:43:06
Jon Walsh
Book. So. Okay.
00:50:43:08 - 00:50:46:11
Dan Pope
How would you have spent it if you had to—time again?
00:50:46:13 - 00:51:08:00
Jon Walsh
Probably close to the customer. But—but—but even more, you know, sort of creating some of those amazing in-store displays. I saw—to credit them—MOMA did a lovely... with the Co-op they did a lovely—it was with the—the Barnardo's, the child—the—the—the children's charities. Really brilliant. But my gosh, the—the in-store standout!
00:51:08:01 - 00:51:32:10
Jon Walsh
So again, brilliant equity driving in-store. I think we would have invested even more into that. And, you know, hindsight is a wonderful thing. But we have done that. Also, I think during the cost of living, inflation was at its peak... we—we froze the team growth. And we froze it for about a year and a half, maybe even two years.
00:51:32:12 - 00:51:53:10
Jon Walsh
And you know, we had to. And I think we—we—we deliberately chose a strategy sort of waiting until, you know, the people are about to go pop. You know your point, Dan: people used to brag about big teams; now it's about who's got the most efficient team. But I think probably in a couple of areas, especially on operations, we left it too long.
00:51:53:12 - 00:52:14:00
Jon Walsh
We should have brought—we should have—should have more people in earlier. But—but it's not a—not—not to get my violin out—but it's a big thing bringing some—you know, creating a new role, bringing someone in. You've got to be really certain the role is there, you've got the money to pay for it. You know, you don't want to bring people in on a false promise and bring them in and then let them go.
00:52:14:00 - 00:52:20:17
Jon Walsh
So I think we were sort of right to be cautious. We were probably a bit too cautious.
00:52:20:19 - 00:52:41:24
Dan Pope
Final thing, mate. So when—many moons ago, feels like yesterday—2 million. What are some of the things you've radically changed your mind on now we're at 20 million? Like, a pre-held belief? And when we were here, now we're up here. What—what—have you changed your mind on?
00:52:42:01 - 00:53:08:01
Jon Walsh
Oh, go Dan... I've got a terrible feeling the answer to that question is "not very much." I feel like I—I mean, we haven't changed around what we're all about—going back to our conversation at the start—in terms of purpose and consumers. We haven't changed our mind on how we run the team. We haven't changed our mind on trying to run the business...
00:53:08:03 - 00:53:27:08
Jon Walsh
You know, by the way, Dan, we're not—you know, I don't want to, like, be waving a for-sale sign, that we've got a lot more to do, etc. But I think just having, you know, being honest and having a mind of like: we're trying to both be the best at this and at some point, like every—like all other brands, you know, we want to find the right home for us.
00:53:27:09 - 00:53:46:16
Jon Walsh
You know, I'm 53... you know, it's... just being honest. Honest with the team, honest with investors, honest with everybody. So I think trying to run that business that right way and, you know, getting to break-even was really important. I think perhaps one thing I had underestimated was—was how important our customers are.
00:53:46:16 - 00:54:00:09
Jon Walsh
You know, I just thought on that whole piece we talked about in terms of... core how they've got behind us and supported us. So not changed their mind on that, but probably grown on there. God, what... what should I have changed my mind on?
00:54:00:11 - 00:54:17:06
Dan Pope
Well, no, no, it's just—it’s interesting. Like, I think the "underestimate" maybe is a more nuanced way of asking that question, but I think the thing you said about the retailers... and I think there's a common narrative of brands to slam the retailers. I think it's Giles talks about, "Oh, it's like—it’s this David versus Goliath ballocks."
00:54:17:06 - 00:54:33:17
Dan Pope
And it's like, "Okay, you can—you can just—like muffle you want, mate, but like, they open the keys to distribution." And if you want to go to Australia, go to Ireland, go to America... like, we have the best grocery system in the world. And you know, we've honestly...
00:54:33:17 - 00:54:56:10
Jon Walsh
Buyers—I know there are some brands who they're pretty... somewhere between aggressive and entitled in their comms to the buyers. I don't think they understand. You know, buyers spend a lot of time on customer service and trying to make sure, you know, the big brands' availability in-store. The big brands will always do about 80–90% of sales.
00:54:56:10 - 00:55:17:05
Jon Walsh
So guess what? They're going to devote 80–90% of their time there and they should. Yeah. It's where the fun growth bit, then, you know, becomes serious once you get some scale. And, you know, if the buyer is not responding to—to you, it's not—it's not... therefore it's probably, "You know, why is your message not right? Why—why is your message not landing out?" I'd have a look at what you're doing rather than criticize them. I—you know, they—they can spot trends. They've probably seen you, but they're—they’re busy. So you know, I'd be... I think you get a lot more—get a lot further—by being positively persistent, you know, in a nice way, than by criticizing, because, you know, they've got a tough job and...
00:55:42:20 - 00:55:58:04
Dan Pope
Yeah. Final thing—so I know you've got to go—just fine—final, final, final thing. So how you're thinking about the valuation in the future, how do you think... how does that inform decisions you're making today? Like, about the exit and timing. You said you've got a long way to go, but if you're at 20 million, you could exit.
00:55:58:06 - 00:56:00:06
Dan Pope
Like, you know, I mean, you can still make a shitload of dough.
00:56:00:07 - 00:56:28:12
Jon Walsh
We still got lots to do. But, I mean, I think it starts at the top line and works its way down. So, I mean, I probably the best example is this whole, like, getting to break-even so that you are both environmentally and financially sustainable. You know, that means you do need to look at your margins. So all those nuances that we were talking about... because, you know, just throwing products out there that are never going to make money, you know, that's a fool's game, you know, and you're—you’re not going to get to your purpose that way.
00:56:28:12 - 00:56:42:23
Jon Walsh
So I, you know, all that whole conversation we had about, you know, the nuances of—of—of making your proposition, you know, successful commercially, I think is, you know, that—that—that's absolutely at the heart of it.
00:56:43:00 - 00:57:01:14
Dan Pope
Mate, we'll wrap it up short, but sweet, but super informative. And I know you've got to go onto dad duty now. But we will catch up soon. And always a joy and mate, buzzing that you've had such a glorious, speedy, you know, climb. So congratulations.
00:57:01:16 - 00:57:21:08
Jon Walsh
But also at the same time back to you because, you know, like, Lord knows how many followers Hungry Life had back then. But now we—now look at you! Like, you know, you're mixing with the—well, present company excepted—the great and the good. Like, it's amazing. I—just I'm watching and I, you know, bit of pride that maybe I was... just amazing. Amazing what you've done.
00:57:23:00 - 00:57:28:06
Dan Pope
I really appreciate that, mate. Really do appreciate that. Sick. Nice one, brother. All right.