Espresso: Giles Brook "STOP Innovating!! You Need to be the HERO in your Category

0:05you need to be a hero in your category and that's the big thing when we looked at we know when we sold the bear business we were the leading brand we were the biggest and the most and the leading brand for kids fruit snacking right and that's what made a big difference in vitacoco you know at one point in time we had a 92 market share of coconut water that got down to as low as 51 um but all the way through that time regardless of market share we were always the number one coconut water right yeah and that was that was the big thing right that's what buyers want to see they want to bring in you know if you're a successful exit they need to make sure that you're a hero category and that's why if you're actually got a big turnover but you're littered across five or six categories and you're a jack of all but master none of those categories it's difficult to get a very exciting exit because you're just not powerful enough in any of those categories that's not just for who wants to buy you it's more important it's for the for the buyer yeah so if you're in a so when you say buyers and the if you're on it if you're in a test sold supermarket buyer right so if you're tesco saings or whatever right my advice is always build really deep before you go wide right which basically means you know so if you look at let's take one of my current ones, BioMe, for example, right?

1:10We are focused on two categories. We've got cereal, and then we've got basically dairy. And we're not going any further than that at this stage, right? Because we just want in cereal, we've got muesli, porridge, and granola. And we've also got some cereal bars, which sit as part of that portfolio. And then we also have kefir yogurts and kefir drinks. They are billion-dollar opportunities in themselves, right? we are now just working with the buyers and just focus on those two categories and just to make sure that we're absolute heroes in those categories. We're getting loads of things, oh, you could go and do this category, this and this.

1:45And actually for us, it's no, no, we're going to build really deep because then we know if we become a hero in those categories, it really does help us then if at some point in time we want to exit that business, we're in the strongest possible place because we're very strong in that relative category. But the bit I also just wanted to mention to you, Dan, what I don't think people realise is, is that when you come to sell your business, you are going to be sat in a due diligence meetings with not just the commercial director the marketing director the md the ceo the whoever it is from these big entities who are obviously kicking the tires on your business there'll be these days now there is a guy like you sat there with a laptop who is a data guy right when you go into an exit process whoever's buying you will i guarantee you unless you are very lucky and you have very deep pockets as a startup or challenger brand they will know more about your brand your consumer and your business from the data perspective than you will because they have access to all of the consumer shopper and category data so i've honestly i've seen it and funny enough i was speaking with some of the um m &a advisors in the last few weeks and they were laughing they said i've been in some meetings recently and some of the founders jaws are just dropping because they're suddenly sat there going oh my god they're like they're sat there going oh my god these guys know more about my brand and my consumer than i do so don't bluff don't bullshit but also you've got to make sure you know your your consumer really really well because you know the stakes are very high in an exit and you've got it you've got to realize you've got to be on top of your game if you want to get a successful exit people think that you know innovation has got to be as weird as wacky and as different and out there as possible right yeah innovating close to the core is the number one advice i can give everybody about innovation right because if you innovate if you've got something in your if your core business or your core category, your core skew is really strong.

3:30Doing different derivatives or very similar products at that is going to create more value for you, for the shareholder, and for the consumer, whichever way you want to look at it. And there's so many examples of that. So the VitaCoco one you've given, I remember across, I was in that business 12 years. We did every single flavor like passion fruit, pomegranate, blah, blah, blah. We did sparkling. We did everything. We tried everything. And then we sat there and we obviously had VitaCoco Pure. and then somebody said well look everybody's the normal thing one thing we've always known is people said look god i wish it tasted more like a pina colada so we're like that's the white skew isn't it yeah so that's the pressed right so all we did was we took the great cool pure offering and we basically blended in another 20 30 percent of your puree to create a much more richer and sweeter coconutty tasting flavor which was we call pressed which was for those people who are real diehard loves coconut taste that was for those consumer and it tasted obviously clearly no alcohol at all but it tasted almost like a you know like what you expect the pina colada within the first 12 months that press launch delivered more revenue to the group than the last seven years of innovation in total in 12 months and again let me give you one example as well of just in market i just think so smart at the moment is that again look at the red bull juggernaut right red bull at the end of the day 99.8 % of their turnover or night let's just say 90 whatever it's 95 99 % whatever you want to say is their regular Red Bull and then their sugar-free Red Bull and then different pack sizes around that right so actually don't forget pack size packaging is big innovation as well as obviously looking at different variants right they've tried tonics they've tried Red Bull Cola they've tried additions all of them do hard anything but what's really smart I think that they've done in the last few weeks has been announced so they've now launched red bull zero so they've looked at the coke model and said well actually let's look they've got coke diet coke coke zero so what they've done now is they said well do you know what let's do the same on energy drinks so we've already got sugar free and we've already got the regular but actually sugar free doesn't taste the same as the regular but let's do a coke zero equivalent and call it red bull zero and they've launched that.

5:43And I guarantee that is going to absolutely fly. And, you know, again, another example is look at Oatly, right? They have their oat drink. They then have the organic one. They then have the barista edition and stuff. Again, very similar product, but a slight twist or nuance on it. And these are all hugely incremental and bringing in new consumers. The format thing is fascinating. And I think it's actually, I think, as you say, people can get, think because I'm an entrepreneur or a founder or even the team, it's like, we've got to do something fucking, a bit like that Jaguar thing. it's like do something so fucking bonkers that's trending at the moment isn't it maybe that's what it's all behind it they know it's really bad but they've got to do something so wacky and crazy to really push the boundaries and you see brands just kind of moving as you say away from their core category and then you i'm walking down another line i'm like shit these guys are playing in here and i won't say the brands but like that's crazy but the format thing is really interesting it's actually quite easy to do and there's the sales director advisor coca was talking about um consumption expansion.

6:38So he was saying that, you know, if you get a pack of eight of those Vita Cocoa things in your, in, in store, right? Say it's a pack of eight, I don't know the actual sizes. If that's in your fridge, you were going to bosh through that. And I know this for a fact from Diet Coke. If I've got Diet Coke in the fridge and I've got eight of them, I will just blitz through them versus if I've got one, it's like, all you've got to do is make the, sorry, make the pack bigger, get that in. It's not that, but then it's going to drive your sales and it's this consumption expansion thing and you know i think it's what dash do very well by doing those big those big things on d2c it's like if i've got one dash at home but oh sorry versus say 10 i will get through for a day so i've just been you'll drink more in between the same yeah because let's just say again it varies by person but let's say your average main shopping trip is every seven days yeah guarantee you if you get that strategy right you can double trouble quadruple double treble or even quadruple your consumption yeah over that same period by just getting the pack size and you're right you've got d2c you also got you know vehicle like costco as well you see people buy massive packs in costco but they're buying as frequently because they get the consumption though they're not running out during you know during during the period between when they're making you know the second but the first and the second purchase right um what about but there's also one other big thing on there as well right and this is where some of the brands are smart in the d2c world is the more you can get the consumer into the subscription model the better thank you so much for listening to that espresso i hope you enjoyed your morning coffee and are ready for the day.

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