Espresso: Tony’s Chocolonely’s Global Marketing Strategy in 16 Minutes

0:04you know,

0:10I have a very strong view or how you grow a business like Tony's, how you find the right balance between investing in each of those three things. Yeah, let's go into it because this is perfect. So what were they again? So from a kind of brand marketing point of view, what I would call a rolling innovation plan and then sort of geographic expansion. If you look at those three things in balance,

0:38I think in the past people said, well, you've got your core range and therefore you should then just put loads and loads of marketing money behind those things and grow it and then occasionally do innovation and as a sort of last resort kind of expand geographies. And I've always just looked at it quite differently in terms of I'm a man that lights irons in the fire and options because not everything works so you don't want to bet the house on anything. And therefore, from my point of view, innovation, particularly in a business like Innocent and Tony's where you can do innovation relatively cheaply.

1:12You can roll out quite a few products. And as long as you're disciplined about then backing the ones that work and quickly dropping the ones that don't, I think it's just a really powerful way to grow the business. What you see from the big guys is they will get a launch. They will probably take too long to getting it to market because they'll have done 58 pieces of research. There's a lot of fear inside big companies about failure. and so they over research it then they're a little behind on their timing and somebody else has got the latest trend out in the market so then they say well this must work so then they pile in loads and loads of marketing money at day of launch and yeah get one in ten works and they and that's the stories you hear but but nine out of ten don't and then there's a sort of inquisition into the business why did this fail it's like the conclusion is normally then well we better research the next one a bit harder and guess what it takes even longer so you create fear what what i try what i tried to do at innocent and and you know picking up from where the founders left off and what we do is how do you remove the fear from failure and if you remove the fear from failure and you try what i would call small to medium sized bets it's really easy then to turn the marketing taps on to things that work and i have a great belief that if you if the thing is not selling on shelf without marketing marketing ain't going to save it one way or the other so yes so so i'm i'm i'm much i'm a much bigger believer in putting something on shelf seeing its first three or four months array of sale if it's above the threshold that's when you pile in with the marketing money that's when you really back the thing because you're you've already halved your risk by saying well this thing's already selling i'm now i'm now trying to get it from the second quartile maybe into the first quartile i'm not trying to i haven't bet the house or my marketing pot on a thing that was always going to be in the fourth quartile and maybe if i'm lucky i'll get it to the third quartile so you so we always had a program of rolling innovation and then you back the winners uh rather than you kind of bring it all together on day one and you make these kind of big yeah this this year is all about the marketing money behind going behind this one thing for me that never made any sense are there any specific examples innocent or tony's of that rolling innovation sorry brand and marketing pillar here rolling innovation pillar two geography expand geographic expansion pillar three of that working with you guys yeah so on the countryside what you have to understand i've never seen a market get to any meaningful scale certainly within three years and typically within five years so so when when i'm thinking about you know and we innocent as you know went from nothing to over 500 million and tony's you know in the last couple of years we've grown the business over 100 million and you can't just rely on one thing but you also have to understand with the countries i'm now making bets on sort of markets, you know, we're just, we've gone into Australia, we're rolling into Canada.

4:21I kind of go, I've launched them, but they're not my big thing. What I'm hoping is that they're going to be my big thing in year three to five. So that's going to deliver meaningful growth for me at scale, not when it's at one to 2 million, it's when it's suddenly going from five to 15 million, suddenly that's 10 million of growth in a year, because you've done the groundwork, But because you've built the retailer relationships, country growth is just on this much longer lead time. So you have to think about, okay, where do I want scale coming in in year two, three, four? And some of those markets won't work as well.

4:59So you're laying down a sort of set of bets on a certain timetable on countries, on innovation, certainly in the chill juice world where you could get stuff to market quicker. It's a bit slower in a 12-month chocolate world. again, you're laying bets, but they're much sort of shorter term in terms of the binary, does it work, does it not work? Yeah, sure. The reaction, obviously, from a does it sell on shelf, does it not, happens really quite quickly. But I'm also, again, there's a big difference between launching another flavor of your existing product or launching a completely new range, whether it's a kind of seasonal range or whether it's, in our case, sort of tinies which are the small chunks in rats as a sort of gifting product yep those are very different types of bets and again so i'm always just thinking about the layers of bets i've got going knowing that i also can afford one or two of them not to work and still deliver good growth layers of bets so you're yeah this this this sort of idea of this year's about one thing and everyone says, you should focus.

6:07I'm like, if you want to grow a business from 100 to 500 million, you've got to be smart and you've got to be tactical, but focusing on one thing won't get you at pace from 100 to 500 million. So I guess the contrarian view, long way back round to the original question, is probably I don't believe in the one big thing kind of strategy. I believe in, you know, and I've scaled Innocent and we're scaling Tonys with a kind of... So what were some bets you placed maybe two years ago or a year ago where you're like, right, these are my bankers? And actually, and just go through that, again, that three things, brand marketing, rolling innovation, country.

6:49Let's sort of pick up from where Adam left off, the kind of innocent phase where I took over, the business is already at 200 million. So you're like, this is a pretty good... Yeah, yeah, yeah. Where do I go from here? Yeah, yeah, yeah, yeah, yeah. These guys have done a pretty damn good job, and obviously I've been part of that, but, you know, their name above the door. What we had there was we had some countries seeded, and we had principally we'd got going in juice, so we'd had the smoothies, we'd made the transition to juice. What I then did was say, okay, we need another layer to smoothies.

7:26So we had the core smoothies, but they'd kind of hit. the nothing but nothing but fruit thing had done brilliantly for the business and there was this sort of mantra inside the company like yeah but that's our that's the magic i was like no the quality of the product is the magic so when we said well let's do super smoothies with added vitamins but we're nothing but nothing but fruit and you're like no that's that's a that that was a explaining that range not explaining the company and so we made a bet on super smoothies which was basically, you know, the angst inside the business was huge. It was like, but, but, but.

8:01Yeah, sorry. And so we had to lay a bet to say, no, we're going to do smoothies with added vitamins with a kind of positioning about, you know, energy or gut health or whatever it may be. So we laid that bet. We then obviously the juice bet moving into carafes with juices, not just smoothies was working. So again, how do you expand that from core apple juice and orange juice into multiple flavors alongside that? And then what we were doing was we were saying, right, Germany, France, Scandinavia, how do we properly invest with not just demonstrating for the sale process that they worked? You actually then had to make them work.

8:41How do you invest behind those things? And particularly with France, we made a very meaningful bet in a field sales force team to say the only way to scale in France is you basically got to hire 20 people way ahead of your revenue curve to get visibility and distribution on shelf. So there's your map of three different things going on at the same time. Where do I then put my marketing money? Well, it turned out that juice was the absolute flyer at this point. So it's really driving revenue. So that's why it was just the superfood juice. No, so this was just, at this time, this was apple and orange and kind of mango, you know, tropical juice.

9:17So we came to Super Juices later. Right, okay. Then you got the tap of marketing and brands. So we put it behind the thing that was really driving at the time. Now with Super Smoothies, we launched them. They did okay. But what we then did was did lots of editing. So we had sort of dark labels and we had four different positionings. What we could see was that the energy one, effectively natural energy, was the one that was selling. So very quickly, within a year, we positioned them all, different flavors around natural energy. At that moment, they really started to work. So we did about three different iterations over about 18 months.

9:57And you suddenly saw the rate of sale go. And again, that's the point we put the marketing money behind the super smoothies. And guess what? Then juices were starting to tap out a little because their distribution. so it's okay from super smoothies to super juices so you're just kind of layering one on top of the other and and all of the while the kind of country growth was happening yeah and again once france got to a certain scale i could then say right i'm actually going to properly put some marketing money because i'm not just a car for central a monoprix central paris brand i'm now a national brand i can see that my rate of sale is starting to grow let's do some national advertising in france and and again that then really moved the dial but we were seven years into france and we'd lost a lot of money before we put meaningful advertising money marketing money down when how did you guys get france moving specifically like what actually happened so um again we had this original strategy of Brits abroad so it worked so well in the UK it's like well take some British people who love innocent and put them in France what could possibly go wrong I mean everything went wrong and and again I've referenced before but consumers are much more the same across Europe than youth than everyone will tell you which sorry what do you mean by that well i've spent years both in chocolate and previously in juice where everyone says oh but but my consumers in in scandinavia like this kind of thing and my consumers in france what you've got in britain will never work we're like well we can't afford to have bespoke flavors and bespoke levels of strawberry and every and guess what if you get your positioning right everything sells pretty well in most european markets so um so from a product point of view you can scale a european brand and to some extent like we are doing now in the u.s a u.s brand with the same portfolio so if everyone tells you it's in the product the differences i challenge that i think it's in your positioning in market by market in france it's like germany like scandinavia the commercial execution is so different you need people that understand how to sell and build retailer relationships and understand where the margin goes in the P &L because where you give margin is completely different in France to where you give it to Tesco.

12:34So you need that expertise. So what the second phase which worked was hire people that understand the trade strategy and make them fall in love with innocent rather than send people who are in love with innocent and go and make that work. So that was the sort of strategy that we took and then with the brand and one of the things i'm proudest of in my time at innocent is that the french think it's a french brand what i didn't what um because detail me more well because again we said you do that well because we i think we hired some eventually we hired some good people commercial people and we hired someone that could tell jokes in french so you know our packaging was was where you told the stories right so you then started in a very small way doing the French social media and the French packaging with people that understood French humor.

13:25So you're not copying and pasting English jokes and putting them on French packaging. And then we did the first big push we did was a kind of a sort of homage to Paris and how we loved Paris and all the rest of it. So it's unusual for an international brand to sort of then do that. So over time, you know, what the feedback was, it got to scale and they thought it was a French brand, kind of a young entrepreneurial French brand coming through. it hadn't sort of really you know obviously some people knew it'd be you know but in general it was loved like it was a local brand and i think that's powerful because you gave local marketeers the opportunity to kind of mold the macro positioning the macro sense of fun to that local market and that was that was really powerful you know and now when i look at the the us you kind of roll forward 10 years and i'm now in the sitting at tony's and we're doing the same thing again what you need we've got the same product set in the u.s never saw but the americans love this and they'll never work you know the u.s is now the biggest part of our business so it's now we sell more in the u.s now than we do in the netherlands which is a sort of mind-blowing transition for the for the business um with the same product set but again the marketeers have the freedom to sort of say well you'd probably need to find a different balance between ethics and taste in the way that you communicate to us consumers than you then you do than you do than you did when you launched it in amsterdam where it was very much about the ethics 15 years ago the so i was speaking to nickel about this before we we jumped on mate but like i the podcast that went out today was with seth godin obviously a big marketing genius and he detailed your story right one of the questions was like how do you go from smallest viable audience you know that sort of bell curve adoption curve where you go from early adopters and you've got across the casim to sort of um the rest of the market he's like the story with tony's right when it started to get those diehard fans was the was the piece about all the ethics and we'll get of course we're going to get on to all this changing the chocolate supply chain um the purpose as you get bigger you you need and he says where most brands go wrong is one they just because you're successful when you're early doesn't mean you're going to be successful as you get bigger and two he says the best brands create a shareable status story for their consumer so it's it's you know the shareable status story of Tony's and I'm just bouncing ideas around here could be like when when it started you rock up to a chocolate um to a dinner party it's like this chocolate is they're so it's saving the supply chain right that's what Seth said um but as you get to be a bigger brand 10-15 years later the story is as you go mass market is the these american parents rocking up to a halloween party and the shareable status story of the brand is less about the ethics of the brand and more about oh my god look how thick the chocolate is look at the tastes look at the crazy packaging and i think the way he detailed it in like two minutes was like insane but it's interesting what you're saying about america and how that market's beginning to to take shape with the marketeers based on that and like the the way the shareable story changes