Grenade's £200M Exit to Mondalez: Juliet Barratt Co-Founder of Grenade LIVE On Stage

0:00Fiona Fitz:Hello, Bread and Jam. I'd love to welcome all. It's my absolute pleasure to welcome Juliet Barratt of Grenade here today. A big round of applause. Thank you so much for coming in today to see us.

0:18Fiona Fitz:Tell us, for those of the audience who haven't, well, they'd have to be blind and deaf if they haven't heard about Grenade over the last how many years. Tell us, how did you start the business? um hello everyone i'm sorry for people over that side i don't really want to spin around so um i'll probably just face face this way um so al and i started grenade in 2010 so i had a very sort of weird background i had a teaching i worked in schools sixth form college but i was like a shocking teacher and i met al on a very drunken night out in birmingham um he had a distribution business and then the sort of rest is history we realized that we could do sports nutrition differently from everyone else.

0:59So we started Grenade, we started buying up the IP, protecting like all the names and whatever else. And, you know, people always say about starting a business, you know, it's not day one, it was like the 10 years before that that sort of helped us to get to where we were. So basically Grenade started as a result of a very drunken night out in Birmingham back in 2003. And what was your first product? So we wanted to be the Red Bull of sports nutrition, so we only ever wanted one product. So we started with a weight loss product because we thought, actually, you can feel that working. So it had caffeine, green tea, bitter orange, lots of ingredients that you could really feel.

1:34So that was our first product. We launched it in a grenade-shaped container because we wanted it to be really distinctive and stand out on the shelf. And I was absolutely obsessed with the military and paintball. So it was a perfect marriage, really.

1:46Fiona Fitz:And I don't know if everyone recognises that product, so it's in almost like a toy grenade plastic container that looks exactly like a grenade with capsules in it and still the same ingredients today, more or less, right? Yeah, definitely. I mean, I don't know what businesses you're all in, but there are really few magic ingredients out there. You know, we have the same ingredients as everyone else. So it was just the way it was packaged that set it apart. And how important was that, that your brand name and that you looked different and that people could really recognise you? I mean, what would you say to brands out there who haven't actually necessarily made themselves stand out in the same way that you guys did?

2:21I think it's key. I think consumers are sort of bombarded with products now. And unless you, you know, you literally have seconds to grab their attention. So by having something that's distinctive, it stands out. And I always call it a twat factor. You don't want to confuse consumers. If they don't know what you are, you've got so many call outs on the packaging and it's just not clear. They get turned off and they go and buy something else. So standing out was really, really important to us. And I always, it sounds really creepy, but there was a little bit of Alan and I in all of the products because we were a bit weird.

2:51to be honest with you. And I think that personality is key and that's what gets consumers buying your brand because it resonates with them and they buy into the founders. Weird in what way, I have to ask. Oh, gosh, you just don't want to know. Okay. Definitely not. Now we all really want to know, don't we? I'm sure some sort of psychotherapist out there would just have an absolute field day, but I think what goes on in our heads is best staying. Okay, okay.

3:19Fiona Fitz:Welcome to Brand Growth Heroes, the leading podcast for the founders of Challenger grocery brands. I'm your host, Fiona Fitz. My 25 years at global giants such as Nestle and Challenger brands such as Goo Chocolate Puds, Chobani and Strong Roots, as well as coached to over 400 scaling brands, means I have the experience to ask the questions that truly matter and get you the insight that will inspire you to think differently and drive serious growth for your brand.

3:50Fiona Fitz:so you launched the grenade product the the original one in the grenade and how quickly did you know that you had something that had traction um i mean when we launched we this was like a second business together so we thought we could retire and do it from wherever we were in the world so i remember launching with clf and tropicana two like distributors and we were sat in florida and we were watching the sales because you could log in and see what like the data was and like nothing was selling and we were thinking oh fuck you know we just put all of our money into this product and it just wasn't selling so we realized very early on that we couldn't have it as a hobby and we needed to get back to the UK and really make it work so very early days it looked great but it just wasn't selling it was really body power in the NEC which was sort of two three months after launch when we got noticed by GNC in the US we drove a tank into the NEC and And that was really the catalyst for Grenade because people saw us and liked what we were doing.

4:44How did you get a tank? Vegetable oil. Our friend's quite eccentric. He's got a collection of about 100 down in Northampton. She only lent us one. Okay. Yeah.

4:52Fiona Fitz:Wow. Okay. Yes, you do. So I think that's really, really interesting. So you had the product. It wasn't really selling. And you're thinking, okay, we can't just do this from anywhere in the world. We have to be there. There seems to be a difference between businesses that just maybe tick along gently or that you approach differently. you approach gently and you don't necessarily have a tank and your packaging might be fairly similar to all the other queues in the similar category and what you've done which is basically you know all in we're buying up all the ip we're buying up all the website addresses we're buying up all the names i mean you even spent i think 50 grand didn't you in the very early days what was that purchasing yeah so when we launched we only wanted one product like the weight loss product so we bought grenadefatburner.co.uk and.com but then we realized that to be a credible brand we actually had to have more than one product and a guy in the US owned grenade.com so we ended up spending$50 ,000 buying that off him and we did this whole we're really small UK brand and he was like oh yeah yeah that's fine and then obviously what it turned out to be I think he's a bit pissed off he didn't charge us a lot more money but again that's one of those conversations that we probably should have had at the beginning you know where do we want this brand to go that brand stretch and sort of set ourselves up for that growth.

5:58Fiona Fitz:But you did know that you wanted to grow a brand that was going to sell to Cadbury's right tell us that story yeah so I mean it wasn't arrogant but I think you know we wanted to set a really sort of strong goal for us and I remember saying to Al you know we want to sell this to Cadbury's one day and you know it's weird that it did actually happen you know we sold to Cadbury's owners so okay so we have this product and you go back from the states and you drive the tank into what was it the sports the NEC body power it was body power in the NEC. And then things started picking up. And how many years before you had your first inflection point and your first kind of, I think you said to me before that 2014 was the first time that you got investment and then you brought the bars out after that.

6:38Fiona Fitz:So what was that first chunk like before the 2014 bit? Yeah, I mean, do you know what? In hindsight, and I'm a big believer in everything happens for a reason, I think that was probably the best fun because there was so much to go at and we didn't really have any wins there. So we had a great product. You know, it look great we were starting to get traction in the UK we started to bring out more products but you know everything was a fight you know we had to fight for new listings we had to fight to get marketing space we had to save money to put an advert in the US and you know every win then was such a you know wow I can't believe we've done that and I used to do all the invoicing so I've still got like the first word document like 001 you know bearing in mind I'm like rubbish on a computer it was like 10 000 grenade units to like this distributor and like we just used to do everything ourself and we set ourselves targets so i want to sell 10 000 units this month then it was like 20 000 then it was 50 000 and you know i think it was those benchmarks that really when you look back on it you think you know what we did really well so what size was the business i mean what was the revenue tracking at before you got your first round of investments an 18 mil valuation for the first investment in 2014 and then that was grove point capital which were like pseudo private equity really super nice guys and actually they just love what we were doing but you know we didn't put any cash in the business it was all cash out and again in hindsight i wouldn't change anything but you know we sold a majority at that point that's the only investment that they did and in hindsight that probably wasn't the right thing to do because we didn't need the money we were just a bit flattered okay so you ended up then with a minority stake yep that's right only just but still it sort of changes the direction of travel okay okay and so then what changed after that because after that then and I just want to bring people on the journey to there because you're probably all imagining your own business and thinking how do you grow a business that gets sold to Mondelez for 200 million like what are the steps on the journey so at this point there's a range isn't there of sports nutrition products that look totally different to any of the sports nutrition products out there because your white space was not looking like a scientific sports nutrition brand right yeah that's right and you had your athletes that were your influencers talk us a little bit about what it was like yeah so this was like quite early days so it was like sort of 2010 2011 so social media was just growing you know there wasn't really this sort of paid influencer thing that everyone else is doing now so we always wanted to be really genuine and I and I feel that when you have a food brand people ingest you so there has to be that trust so we use credible athletes that love the product we didn't pay them it was just a real experience and Al and I are huge on culture so we only work with people that we like working with and we took this team of athletes all over the world.

9:15So they stayed in hotels, you know, we all trained together, we went to the cinema together. And I think we built that real grenade team that resonated with our customers.

9:25Fiona Fitz:I'm thrilled to introduce Brand Growth Hero's newest partner, Jolson. Jolson is a leading B Corp certified commercial law firm that specializes in guiding the founders of scaling CPG brands. With long term relationships with clients like Little Moons, Trip, Eat Natural, Bear, Graze and Pulsan. Jolson is also famous for advising the Innocent founders in their landmark sale to Coca-Cola. And believe it or not, they still work with the Innocent founders at Jamjar Investments today. I'm especially impressed by how Jolson sets founders up for long-term success and by their commitment to championing female founders.

10:02Fiona Fitz:Recently, I asked one of Jolson's managing partners, Paul Chappie, a tough but crucial question. should co-founders discuss right from the start what happens if one of them wants to leave the business absolutely i mean with any joint venture that's what a sort of co-founder relationship is you've got to be very clear from the outset as to what each party is bringing to that business look at the skill sets look at the time commitment i often see uh founders coming where you know one founder might have a full-time job they're still getting the same amount of equity and and you can see immediately that there's an imbalance in that relationship that they either haven't looked at or are ignoring and eventually that will come home to roost so i think the key thing is to look at you know what are we bringing what is that future going to bring what are the things that you know If I have to go and look after kids or have to emigrate somewhere, what's going to happen to this business?

11:05Fiona Fitz:What happens to my equity? All those questions need to be thought through, discussed. And contractually, you can then just draft those provisions into that contract and set that relationship in the firm footing. Huge thanks to Brand Growth Heroes podcast sponsors, Jolson. Now let's get back to the show. we were talking about this in the coffee shop before we came in but like what really strikes me you know i talk a lot about value proposition and coherency and anyone who's doing mini mba at the moment will know i keep banging on about it all the time but like you guys had this you know target market you decided that your brand was going to look like this it was it filters through the packaging the marketing the way you were as people everything you did you banged a drum really loud visually and in everything you did how did you know to do all of that oh it's just it was that gut feeling and I think because Al and I were so hands-on you know I'm a bit sort of OCD control free not like weird like turning cans around and stuff but like every piece of marketing material went out I checked it and everything was completely on brand and what we never wanted to do we always wanted to stand out but we never wanted to offend anyone I think there's a difference isn't there between that so you know if you think of that is a FC UK you know their French connection or whatever, they did a really good job of sort of having that tug of cheek sense of humour, but not actually offending anyone.

12:28And that's what we wanted to do. So everything was fully targeted. You know, we focused, we knew what we wanted to be, we knew what we wanted our consumers to see us as, and we never deviated from that. And the consumers at that point, were they, they weren't bodybuilders, the way you described it? Again, small pants. Small hands, that's a completely different show. So they were just like everyday weightlifters. Yeah, so, you know, everyone always says about the grenade journey. And I think timing has so much to play. So, you know, we were right place, right time. If we'd have been 5, 10, 15 years earlier, it wouldn't have been, I hate the word success, but it probably wouldn't have grown as it did because the market wasn't there.

13:08But protein was becoming a lot more normalized. People liked that men's six-pack look. You know, they wanted to look lean. Blokes wanted to look like it. Girls wanted their partners to look like it. So it was right place, right time. And, you know, people, it was, we launched in a recession. So actually people couldn't afford to go out, but what they were doing was investing in what they looked like. So they were going to the gym and they wanted to look good. So protein bars or whatever, you know, the Gymshark crowd, you know, it all grew at the same sort of time.

13:35Fiona Fitz:Okay, so it was a wave and you were kind of democratising protein, kind of like in nutrition for people who just wanted to be everyday athletes. Yeah, definitely. And I think, you know, some of the big boys like Weetabix were doing protein cereals. They were actually educating people on the benefits of protein. So it was an easier conversation for us to have with the buyers. The fact that, you know, we had a protein bar, for example, because they understood the value of protein and the proposition of that category. So then how did the bars come about? Because obviously everybody probably has tried the bars, eats the bars.

14:05Fiona Fitz:I got the tube to work this morning with a friend of mine who I was staying with. And he is in a bank, in bank. and he said yeah some of his team get these delivered they're bankers they get delivered the boxes of grenades still to the office you know so it's like a still a massive thing yeah i mean like that sort of that is like really flattering you know whenever i see a grenade wrapper on the floor i'm like oh my god i'm so proud and then i sort of think they're a litter bug and like hate them but we we knew that to move from sort of niche sports nutrition because it was niche into mass market food we had to have a food product hence the bars so like not everyone is going to take a weight loss product or a pre-workout but most people eat chocolate so I think having the credible sports nutrition background so the protein the low carb in a chocolate bar actually helped us move from niche into mass market food and do you mind telling everybody about your co-manufacturing journey and how you ended up doing this because I think this is really one of those kind of transformation catalysts it's a bit of a wanky term but you know had you done this differently things could have been very different so this was clever yeah definitely I mean, we realised that people are really protective over their chocolate.

15:11And actually, all the protein bars that were out there in the US tasted like shit. You know, disclaimer, other protein bars were available. And they never used that on their marketing materials. But we wanted a protein bar that tasted like a chocolate bar. So, instead of going to all the bog standard protein bar manufacturers, we went to a chocolate manufacturer and got them to innovate with protein. So, there was no compromise. You had the great macros like the low carb, high protein, but it tasted like a chocolate bar. And that's what really was the catalyst for growth because you just didn't have to be miserable eating it.

15:44Because life's so short, isn't it? You just don't.

15:45Fiona Fitz:I imagine also like the whole NPD process with that co-manufacturer would have been much more pleasurable because, you know, when you go to the wrong, has anyone to have this experience and, you know, disclaimer, there's lots of great co-manufacturers out there. But if you go to the one who's mismatched for you and you're kind of dragging them through the process and you get the samples and then you get the second round, the third round. and you're thinking, oh, God, and you're trying to inch, inch, inch, get it better. Whereas you get the right person, and boom, you're like, oh, thank God, they get it.

16:10Yeah, definitely. But I still think it's like a long journey. So we definitely had the right manufacturer, but we still had 27 different varieties to get the first carb killer flavour. Did you? Either because we're perfectionists, but we wanted it to taste amazing. So we weren't going to settle for anything. But it makes that process, which can be really arduous, much more enjoyable if they're on board with you.

16:31Fiona Fitz:Yeah, and they understand chocolate and how to manufacture it. Does, going back to your thing about being a control freak, those 27 versions, what was that like for you? I mean, were you like, okay, no, it's still not right. It's still not right. Yeah, I mean, to be honest with you, Al did most of that. But, you know, we had protein before and we were tasting unflavoured chicken protein, which was absolutely fucking horrendous. So, you know, a chocolate bar was a walk in the park compared to that. Okay, okay. And so you launched that. Did it just take off straight away? compared to like the weight loss product yes i mean we did a really good job of getting retail listings so we started to get listings in like tesco's and whatever else and i think because we proved concept in the retailers before with like the sports nutrition products when it came to a chocolate bar they were much more willing to list us so al and i always wanted to under promise and over deliver that was our mantra really so we never bullshitted anyone we told them how it was we said what we were going to do we always did what we were going to do and we always sold more than we said we were going to.

17:29So that made us a good brand to work with.

17:32Fiona Fitz:And was there something interesting about the source of business from a shopper perspective? Were you surprised? Were they surprised when they saw people, you know, who weren't just looking for sports nutrition, but they were like swapping out of chocolate for a particular reason? Was that a thing? Yeah, I mean, like to start off with, we did go into the sports nutrition aisles, but actually the sports nutrition buyers wanted to keep us there because obviously they were selling like wildfire. But then we wanted to be in mass market food. So we wanted to be in the confec aisle and we wanted to be till point.

17:59So there was a bit of a battle internally sometimes with the retailers to get us listed in the right places. But wherever we were listed, we spiked basket spend. So we used to do a lot in convenience and in petrol stations. And, you know, we got the data from, I can't remember if it was Rontek or one of the others, but we were actually spiking basket spend because people were going in and buying like three, four, five different grenade bars.

18:21Fiona Fitz:It's like every buyer's dream, every category director's dream, really, isn't it? that's amazing so what was team like at this point then so who did you have and when did you hire and how did you work the whole people thing yeah so i think recruitment is really tough so when we had the first round of equity invest private equity investment in 2014 i think the headline was um grenade got investment alan jules and four cats because we had such a small team um they made us put an fd in and ala like we're like fuck that we don't need an fd it's just going to get his big calculator out and tell us that we can't spend any money but actually he was one of the i mean mean he's the CEO now he's been in the business for like 10 years and he was great because he actually did the bits that Al and I didn't want to do and he could answer all the private equity questions that freed Al and I up to go and grow the brand and you know do all the fun stuff you know we didn't really give a shit about the numbers you know the sales would come and that sounds like really a bit blasé but I think if you start focusing on the numbers then you make really bad decisions because you drop the price or you do offers and you know we never wanted to do that.

19:24So ours was always a focus on brand building and not on the numbers.

19:28Fiona Fitz:Okay, that's really interesting. What did that mean for price promotion? Yeah, I mean, we obviously had to do some, but we never did any sort of deep price promotions. And we tended to add value. And we worked with retailers and gave them exclusives on flavours and things as opposed to constantly dropping the price. So we never ever traded on price. Okay, clever. So what about then other team members? Because I'm thinking about people here, you know, at an earlier stage of their journey and they're thinking when do I invest you know are they going to pay for themselves that's a really scary thing to have to shell out you know whether it's 60 80 grand on people how did that journey go for you guys I mean sorry um when we first started you know we employed a graphic designer from the local college I think he just graduated I remember giving him a five quid bus fare to get home after his interview he came with a lego cv and now he's the head graphic designer you know again he's been there throughout the whole journey and we gave this guy rob a job that we really liked and he's head of operations now so we employed you know that cultural fit was so important because you spend so much time with these people you don't want to work with knobs it's as simple as that we might have to cut that bit out but no no leave it in i think one person with the wrong attitude can really change the culture in a business and that can have a negative effect on on everyone and you know we always i think it was richard branson we went to an event once and he said well the people with a one or two cultural fit so as in rubbish you're never going to employ the nines and the tens you're going to employ it's seven and eights that you have to question because you might be able to sort of mold them but they could be really damaging in that role so yes we employed people that we liked but as the business grew and we needed like category managers and data managers you know we had to recruit on skill set so we needs to make sure that they really got the grenade journey.

21:13Fiona Fitz:And how did you lead those people, like in terms of culture, leadership and values? And is that something that you took seriously? Did it just happen? Yeah, I mean, Al and I were sort of in the business until the end. So I used to be first one in, last one out. I don't know whether that's a right or a wrong thing. And I think when people see you working, then they are in that journey, on that journey as well. And, you know, we used to do like a chat with everyone about how the brand started, because we never wanted people just to join the business because they got avocado on toast for breakfast we never gave them that by the way but I remember a recruiter saying that that we needed to attract people because they could get avocado on toast for breakfast but we wanted to attract people that love grenade and love the grenade journey and wanted to be part of that you know we drove tanks through London you know we had great fun and people wanted to be on board and they genuinely loved the product and that was so important to us and we talked about honesty being one of your core values and we talked about you know how that kind of was very much part of your leadership style but you made a really important point about you know where there was boundaries with honesty and I think that's really interesting yeah I mean I'm probably too honest and blunt and mildly offensive sometimes but you know I absolutely hate bullshit and you know I think in society I probably shouldn't be saying this because I'm probably gonna get you can say whatever you want what is it what was they shall Malcolm cancelled that's it you know I think we've become so sort of conscious of what we say that you know if someone's rubbish at their job we can't say that anymore you know we have to spend six months trying to get them to be good at their job but you know we just didn't have that time in the business so I'm brutally honest you know I'll say it how it is and at least everyone knows where they stand and that's really important to me but you know I've worked with a number of food brands over the last sort of few years and I think Al and I were always really good at being joined up and being like the founders of the business and being completely decisive and focused with what we wanted to achieve so we never raised cash for the business growth so we never had those constant funding raises you know but we're always completely joined up we had difficult conversations about the brand and where we wanted to go behind closed doors but in front of the staff we were always completely united and you know I worry about businesses that overshare and tell their staff that you know we need to raise money we've only got two weeks runtime or whatever else, because the staff must be thinking, shit, I need to look for another job.

23:35So I think you've got to be focused and I think you need to be clear and strong leadership is really important.

23:40Fiona Fitz:Yeah. Well, I think that's great advice, not something that people talk about enough.

23:47Fiona Fitz:If this episode is inspiring you to think about new ways that you can drive growth for your business, don't forget to click follow or subscribe on your favorite podcast app and even leave a review. Your small gesture has a big impact on me and my business and will be truly appreciated. The funding journey then. So we talked about this, we were laughing, laughing almost in a kind of a terrified and admirative way that everybody's always on a fundraising journey these days. I mean, I couldn't do it. And I think you're all amazing to be out there fundraising all the time. It is a full time job, scares the living daylights out of me because it is so much hard work.

24:26Fiona Fitz:And I know that it's really necessary because gross margin is a really difficult thing to get right in this day and age when ingredients, the cost of ingredients, the cost of living, cost of salaries are so high. Talk to us about your fundraising journey, your view of it today, the advice that you would give to people. I mean, just go wild. Yeah, I mean, like from the grenades, you know, we had investment into the business, but it was always cash out. So we were always cash generative from day one and that was really important to us. So, you know, again, Al and I are a bit weird. We never owed anyone a penny.

24:54Our suppliers used to tell us to not pay them so quickly because it was just really important to us. But I work with other food brands now that seem to be on a constant journey to raise funds. And it's just absolutely exhausting. And it takes the founder's eyes off the business, which is really, really important. And again, I think it can make them make bad decisions. So discounts, we've got to hit this number this month. So they do stuff that probably doesn't sit well with them just to hit those numbers. So I would beg, borrow and steal off family, friends so that you don't have to get investment unless it's literally the last resort.

25:32Fiona Fitz:Yeah, I mean, it is hard, isn't it? Because we live in this LinkedIn world, this LinkedIn bubble where everyone's talking about it all the time and it seems to be the cool thing to do. And if you're not doing it, you've got FOMO and you're thinking, well, I'm not investing, I'm not raising, I'm not this. And I can totally understand being in that bubble myself that it seems to be the thing that you have to do. Yeah, definitely. But I think people, I mean, you all probably know it, you know, social media is bullshit. You know, you can see people having the best time of their lives on social media.

25:59And then you think, well, actually, that's not their life. It's just what you want them to see. And again, on LinkedIn, all these wins that all these brands are having, which is absolutely brilliant. But, you know, they never say if they're generating cash or they're loss making, you know, they don't tell you that sort of stuff. So, you know, just be on your own journey. What other people are doing is great. And that's what they're doing. but you know what happened for us in Grenade that's just my story it doesn't mean it's going to be the same for you guys just be on your own journey and just be comfortable with what you're doing if you want to give somebody a go do it if you don't want to do it then don't do it don't make anyone do anything that you don't want to do or you don't feel comfortable with god that sounded like a therapy session I'm so sorry it's great it's what we all need isn't it a bit of