Espresso: David Milner - How to ACTUALLY exit your brand for MILLIONS

0:02So I want to just discuss this with you because again I've done hundreds of these conversations it's just i love picking at the new ones some people have said to me like as a brand you should only build you should really build in the uk to begin with and then one other market to show um you know you work in another market like go narrow and deep and then so that's one sort of school of thinking the other which is i think you can go to scattergun where you're exporting into a gazillion different markets and you're just like what is this like you've got one store in costa rica one store in Japan.

0:35What's your thoughts on brands who just go for those two countries? Or do you think that's actually quite a good strategy? That is, of the two you've identified, that is the strategy you go for. Because the objective of the exercise is not to build a business that you can say, oh, I've got 5 million pounds worth of sales in France. That's not the point. The point is, you need to demonstrate to the ultimate buyer of the company, the multinational, that you have a brand that transcends boundaries. It's not a national brand. It's an international brand. So if you're based in the UK and you launch in France and Germany, which are the two biggest countries in Europe for business anyway, if you launch there and it works, they need no more evidence that this is certainly an international in terms of European brand.

1:18No, it may not work in Africa. It may not work in Canada. Who knows? But it's certainly working in Europe, and that's generally enough. And so my approach working with Thomas in this instance is always to keep it fairly tight. So if you take another example, which I'm always talking about, if you took St. Pierre. Yeah, that's what I wanted to do. They were massive in the States, right? Well, that was the market that we were able to, when we sold that business, we were able to say, well, we're the brand leader in brioche in the UK and America. And that was really big. Talk to me about San Pierre.

1:51Because I've always, it's been kind of those wonderful brands that kind of is just like, kind of a bit like Cross Molica slowly just got, was massive. I don't know if that, because obviously, but you don't see the big sort of LinkedIn hoo-ha and obviously LinkedIn is very much a microcosm. It's not reality, right? But yeah, it's a fucking massive brand in America. In America. Yeah. So you come into that, into San Pierre. How big is it when you go there? And then what did you do to get it going? Yeah. Well, Sampierre, when I was chairman there for three years and worked with... What year was that?

2:29Sorry. When did we exit that? I think I started there in probably 2019 or maybe 2018 and then exited about two and a half years ago. But I did three years as chairman, working with the exec team and the founders. And then I did a year where the founders stepped up to chairman, and I became the chief exec. And that year was really to exit the business and let them take a step back. And I would do that. That's the selling part of the role. But well, first of all, I love working there. Because again, if you like a barbecue and you like the burger or hot dog, which I do, You can't beat that product as the as the bum that goes with with the burger.

3:17So I always liked the product and And there wasn't anything quite like it and and it is a it's a big market Obviously the bread market the rolls market, but they're not a huge amount there is branding, but it tends to be brandy, you know, hovis or Warburton's which is a sort of an overarching brand and then there are lots of different products underneath that Premium niche brick. Yeah, but there wasn't, I don't think there was much going on in premium there. And no one was doing brioche, which I found extraordinary because I always thought brioche was, you know, the ultimate premium bread treat.

3:52Anyway. Yeah, with a burger, you can't. And once you've had a burger with a brioche bun, you are not going back to that crusty white roll. Or a hot dog, actually, for that massive. No, you're right. Yeah, yeah, yeah, yeah. So love the product. When I was first involved there, first when I was chairman, it was more than half. it was private label. So they were making products for other people's brands, typically supermarket brands. In the UK? In the UK, but also in the States. So it was already in America before I got involved. And we had a big business, but it was private label. And then what we, again, if you think about the end game, you're going to want to sell this to a multinational.

4:29They don't want to buy private label businesses. There's a number of things they need. So first of all, it needs to be an international brand. Secondly, it needs to be one brand. Now, people will disagree with me on this because lots of people build up their company by making acquisitions and end up with a stable of wonderful brands they'll describe. So when you say one brand versus a house of brands, examples of that would be? Well, so St. Pierre's one brand. Everything I do is one brand. They start off with more than one brand. So we've got more than one brand at Costa Malika. We have more than one brand at St.

5:00Pierre. but when it's a multinational they don't want three really good sort of medium-sized brands they want one but i'm a great believer in focus you mentioned it earlier on you can't focus on your main brand if you've got three main brands okay so so in order to get the best out of your business you need to focus and but more importantly i think selling a business that's made up of two or three or four brands to a multinational is going to be really hard work because they don't want that they want the struggle you have with the multinational is if i'm going to buy you are you big enough that I don't crush you?

5:33So there are kind of rules. Say that again. If I buy you, I'm big enough. Are you big enough? So I love your brand. You grow fast. You're cool. You're in the right category, but you only turn over 30 million and I turn over 50 billion. The biggest failing or the most frequent failing of a brand that gets acquired by an international is it's so small that it gets crushed. It gets ignored. It gets stepped on. People forget about it. All sorts of things, but basically, it's not big enough to worry about. So the challenge, so they really like to buy businesses at least 50 million and pushing towards 100 is great, because then that's big enough.

6:08If you've got three brands that make up your 50 million, they're 15 million each, that's just not, that's going to be very hard to sell. So I have this argument up front, because usually, the entrepreneur has built up this, you know, two or three brands, and they all do something different. Oh, we love it, because this covers this part of the market. this is the premium bit this is the cheaper end this is the you know I don't want to do that I want to make it one brand so it's only my personal opinion I mean people have sold businesses that are more than one brand but I think it's it's not the right approach so what did you do at St.

6:41Pierre you consolidated it into well what there we were in three hours we were in private label so no someone else's brand then we did Baker Street and then we did St. Pierre and the company was called Cars Foods which I could never understand Because everyone went, oh, Cars Foods, is that like the water biscuits? And no, it's not the water biscuits. And after explaining that for about 10 times, I thought, why don't we just call the company St. Pierre, because that's our brand. And actually, changing the name of the company, changing the letterheads, changing the branding of the office, so it was all orange and said St.

7:10Pierre everywhere, did something to help everyone focus on the fact that it was all about St. Pierre. Because it said it everywhere, rather than Cars Foods. So we focused on the one brand and that doesn't said that the the business was more than half private label And we basically turned it into a branded business. So by the time we exited I think it was over 80 % brand And and in America the brand did brilliantly. So it's the number one brioche brand in America We had a very good distribution partner there and we spent a lot of time over there I mean, the thing about the US is it is the most attractive consumer's market in the world.

7:48There's 320 million people that have plenty of money, and they love a brand. Private level's relatively small there. So if you can make it work, that's the gold medal in what I do, if you can make it work. Usually, it doesn't work, because you can't be a part-time competitor in the world's most competitive market. You need to focus entirely on that. And usually, in a small business, you've got other things going on in your home market, and you're nearing international markets. So usually either it doesn't work or you don't go there. But in this instance, we were already there. We changed the emphasis around to be more unbranded and it did work very well.

8:25And we got a fantastic exit. We sold the business to the biggest baker in the world. How much for? It was a very large amount of money. Pardon the pun. It was a lot of money, yes. Okay, two months free. Yeah, that's what Espresso sponsors Unleashed are offering. They are supply chain gurus and offer inventory management that talks to your e-com and accounting software. It's helped Ireland's cut admin time in half, get granular clarity on your margins, know where your stock is. Don't miss availability. Brands like Candy Kittens, Tarquin's Gin, Minor Figures and Trip all use Unleashed. And I reckon you should too.

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