How to ACTUALLY Exit Your Food Brand for Millions - David Milner, Giles Brook, Adam Balon, Barney Mauleveur

24:24So it's a perfect direct-to-consumer brand. But I'd never sold anything through Amazon before. I didn't know anything about direct-to-consumer. I just knew really about supermarkets. And so we went in to meet Amazon and had a fantastic meeting. It was really interesting. It was all new to me. And we realized that you could build a business where you had your own website selling direct to consumers, but you could also sell through Amazon. And those two things didn't actually conflict. So logically, at the start, that seemed impossible. But in fact, it worked. And it didn't conflict with the supermarket business.

25:00So I assumed at the start, gosh, if I build a big direct to consumer business through Amazon, that's going to upset Sainsbury's, you've just listed the product. But they didn't seem to notice or worry. And I don't think they actually competed with each other. I think there were different people buying direct than buying in a supermarket. And so you're asking me, of all of them, which was the least clear at the start of how I was going to do it, I'd say it was the pet food business because of this multi-retail point of building the business, whether it's your direct consumer business through your own website, Amazon, actually selling to consumers direct through the website of the supermarkets, which is the third weight of D2C in effect, or supermarkets or pet food.

25:44I mean, it's the most fragmented of all the markets I've worked in. And actually, for many reasons, it's very attractive because of that, because you're not beholden to one customer. Like if you've got a supermarket brand, over 30 % of all your sales is going to be through Tesco. So that's a good thing, but also it's a concentration.

26:00Giles Brook:It's a house of cards, potentially. That's not always that good. So you took Lilies from what size to what size? I think it was about 5 million when I first got involved. And today it's over 100 million. 100 million. Yeah. So that 500 million journey is what a lot of people listening to this will want to try and go on at some point, whether that's bringing outside people in. And you said in terms of the plan, it was the focus things. So what were you doing? So we had this D2C operation. you realized the upside was in there. Like what were some of the challenges in going from 10, sorry, five to sort of 100?

26:41Well, I think it probably brings us onto the fourth of your blocks. Yeah. If you've got, you know, big category, superior product, have a clear vision for where you're going to go, plan. Fourth thing is get a great team. And I think, as I said, I didn't know anything about selling direct to consumers. So I thought, well, better get some help with this. So Amazon, actually, if you want to work with Amazon, you can work with companies who are experts in doing that. And in fact, what we did, we engaged with Tambo, I think the name of the company is. And Tambo had their own account manager who sold our products in to Amazon for us.

27:22So we basically outsourced the account management to Tambo. And then the other thing we did is identified a business that did brilliantly direct to consumer, which is Hotel Chocolat. And the person there who was the head of direct to consumer, we hired her, Michelle, and she came and worked for us and did her magic at Lily's Kitchen. What was the magic? Well, she knew what she was talking about, which is a really good start. Yeah, that's a good start, yeah. Because she had all these acronyms and sort of ways of doing stuff, which were completely alien to me. and so she helped us. She basically did it, helped us and all the people that worked around her, we now all know a bit about it as well.

28:01We'll never know as much as she does. But yeah, so I think, but the broader point is, you know, you can, there are some people who take the raw material of the team they've got and train them all up and work with them and then they all do brilliantly. And I'm not, I don't do that. I tend, I'm a believer that usually the team that have got the business from nothing to 5 million are, in large part, probably not the team that will get it from 5 million to 100 million. It'd be lovely if they were.

28:32Giles Brook:What's the difference in the team? How does the team have to change? Or why do you have to get rid of some people? Yeah, I think if you think about the nuts and bolts of getting a business off the floor, getting it going, the entrepreneurial skill, the sort of can-do attitude, I mean, they're all amazing things. And these people are incredibly valuable, but they're good at doing that. The difference may be when you've got a£30 million business and you're dealing with your export market to France, none of the people when you've started the business would have probably done that before. So much better to hire someone that has done it before, is great, can speak French, is happy to go back and forth to Paris the whole time, and knows all the supermarket buyers as in France, you need to go and hire someone like that.

29:21I mean, you could try and do it the other way, but that's not how I do it. So get a great team for me is, if you've got people that are already there that can do it, fantastic. But in my experience, you need to supplement the team with the skills you don't currently have. I'd say this is probably the number one area that I think is fundamental to being successful and not successful today. And it's really interesting because I just, I'm not really a big user of social media stroke things like LinkedIn, but have been on LinkedIn a bit the last two weeks. And it's amazing because there seems to be a bit of a conversational, confessional conversational thing with various founders saying, do you know what?

30:00If I knew that now, I would do this. And fundamentally for me is that when you're a minnow, you're trying to get a listing. And there are unfortunately some harsh realities. If you are a startup challenger brand and you want to get into one of the big guys, you are going to have to give more margin than the category average unless there is a completely incredible unique dynamic and a couple of examples maybe like that were like little moons or a fever tree who had so much brown swell and power because they're doing so well a retailer or i'll give you another example prime right so take prime as an example yeah there could be examples where they actually haven't had to give the category average margin or else haven't had to give the the margin of the challenger brands because they were so on trend and so hot.

30:47And the supermarkets were desperately to get them in. But typically, for the majority of brands, you just got to accept you're going to have to give more margin than the category average because every single category is having its base reduce. Every single category is having ranges rationalized. And also importantly, every single new product that goes into a fixture is having less and less time to prove itself. It used to be about a year. I've known brands come out after 10 weeks now after not performing, right? You've got to go and you've got to perform. But the one message that I want to land and I'm seeing more and more and people talking about it is that, be really clear from day one, you have to operate a business with a certain level of gross margin.

31:32And I think I mentioned to you - We talked about this last time. Yeah, and obviously gross margin, just for anybody listening, is just very simply the invoice price you charge a customer, less your promotional discounts less what it costs you to both produce it and deliver it to that customer so just keep it as simple as that there are slightly different definitions but and typically in food and drink you want that to be minimum 30 ideally you'd want that to be 40 gold standards 50 and above right because if you're not generating good gross margin you're continually chasing your tail because either one you're running out of cash the whole time or else you just haven't got any money to invest in people, in marketing, in infrastructure and things like that.

32:15And that's the number one thing I see where, you know, I pick up some P &Ls and some businesses. Obviously, I get quite a few investment memorandums where people are obviously fundraising and stuff. And I'm seeing some gross margins in like, I mean, I hate to say it, but like I see quite a few in like the 15, 20, 25%. I'm like, you're just not, there's no sustainable business there. You've got to make gross margin. And I hate to say it, but, you know, the meat alternatives, you know, I've seen these businesses with like single digit gross margins. Oh, we think we can get it to 15 % in the long term.

32:48I'm like, still nowhere enough because it's not a viable business because you've got no money. You're not generating any money to then kind of build a business underneath it. And that's my number one thing, which is, you know, there may be an amazing listing for you. but just make sure you can go in in a way where you know you can you know let's just say for example give an example without let's just say right i would generally say look try and make an average of 35 but let's be honest let's just say one of the top four supermarkets offered you a listing you're going to make 25 do it right if you go to all three negotiation you can't get a a deal do it but if that's more like 20 15 10 don't do it because that sort of size volumetric customer and the percentage of the mix means you're always going to be chasing your tail on margin and i know some people go oh yeah if i get it in now don't worry because i can go back because hopefully you know i can buy bigger packaging runs i can get cost of goods up and all stuff like that and do that analysis but typically you can't make it up enough and the and the scary thing is and this is the this is the elephant in the corner of the room is that you're going to have to invest more every year because you'll have to increase your promotional spend.

34:01Rate cards go up for things like shelf ticketing or whether you want a gondola end or whatever. And the cost of doing business will keep going up. And then there's also one other big harsh reality, and it's something I've been fairly vocal about in the press recently, is that multinationals over the last few years have been able to put through some pretty big cost price inflation increases, multiple double-digit ones. startups and challenger brands have either had to only pass on partial or have had to shelve them because they haven't had the balance of pounds push those through so again what that essentially meant is that gross margins have been even further suppressed and i've really struggled with that one because you know yeah the big corporate suppliers can push through the price increases there's obviously been some fallouts which has obviously been well documented in the press with certain products being taken off until it's been sorted out but when you're a small brand and you go in there and don't get me wrong i completely understand the pressure the buyers are on in the supermarkets and stuff but you know when i know there's guys who are trying to put single digit price increases through which is only a fraction of what they need to put through but it's still being told if you put that through then you're probably going to lose listings but we're not going to have the same relationship and you need to basically you know

35:15Giles Brook:forgo it i always saw the innocent journey as this kind of going upwards that you kind of built the rocket ship it was it was soaring upwards and i'd love to kind of parachute into 2007 2008 and kind of the black swan event or the black swan was the financial crash yeah it was almost like a monstrous beast that was kind of attacking three towers if you want to put it in those terms and i'd love to go into what was the yeah as you say you've built this rocket ship it's going it begins to tank what was the the hardest day in that period what were the sleepless nights what were the the feelings yeah um I think probably so just to set the context the business had grown you know from nothing to about 100 million nine years sort of broadly everything had been going right tailwinds had been with us the trends were with us the economy was good um And I think we wrote the budget for 2008, which was to do, I think, 140 million of turnover, which would 30 % growth and make, I can't remember what it was, but 10, 15 million bottom line, expand across Europe.

36:28Everything was going well. And we wrote this thing. And the first signs that things were going wrong was beginning of 2008, January. We normally have a big January. The big January wasn't quite as big as it normally was, as we expected. And then things started to, you know, February didn't get much better. And then March got a bit worse. And then by the time we got to the summer, things were really tanking. And we were actually losing sales, losing money. And we went from a fast-growing profitable business to one that was losing money and actually running out of cash. and I remember all of us sat around and said okay so we knew we need a new plan here and the thing that we'd said was we're not going to take any external money we will do this independently um and let's write the plan that gets us through and we wrote that plan and it was the most depressing plan you've ever seen I remember sitting in the room where where we sort of shared it and it was just like we're going to have to close all the international offices fire a load of people step back from our ambition of being Europe's favorite little juice company and we sort of looked at each other and we're just like oh god that's so depressing that's just not what we're not what we're about um so we thought well look the constraint here was about raising money so if we raise that you know loosen that constraint and say we will raise money what could the plan look like and from that low point actually things started to get better um not not directly but that decision was a really good one it was like you know what let's raise some money and let's continue our mission to be Europe's favourite juice company.

37:58And whilst we did have to trim and cut back, it wasn't the wholesale complete about turn that we would have had to do if we were unfunded. And so that was probably the most depressing day when we looked at that plan and just went, oh, God.

38:10Giles Brook:What was on the plan specifically? Because I think this could help. We're going through, so many people say to me that this is one of the hardest times right now. And what I suppose I'm trying to get from is Black Swan to building anti-fragile brands for today. What was on that plan back then? And what do you think people should be putting on their plans to survive kind of this tumultuous time? Well, I suppose, but just pulling back a bit, I think we, what happened in 2008 was sort of everything that could go wrong went wrong at the same time. And I think that's, you know, that's sometimes, life is like that, actually.

38:44And Black Swan events actually are a bit more frequent than you sort of realise because there was that and then obviously the pandemic. And so actually, that's, you know, thinking forward, it's realising actually when things go wrong, often they go wrong in twos, threes, fours, fives. And that's exactly what happened for us in 08. So obviously, the recession hit. People stopped spending on what they saw as needless luxuries. And Innocent for some people was seen as that. Tropicana launched a smoothie and started getting really aggressive on price. Sterling collapsed because of the recession and all our input prices are in euros.

39:17So, you know, iron prices went up. The mango crop, the apple crop, the banana crop were all bad. Normally, they balanced each other out. One was good, one was bad. That year, for some reason, they were all bad. So we were hit by this sort of massive, like, bang, bang, bang, bang. And we just started on a big international expansion, which meant we had put in loads of cost into the business, opening up offices and hiring people abroad. And so suddenly it went from being massively profitable to losing money really quickly. It was, you know, in the space of three or four months. So that was the context.

39:47And I suppose to answer your question on the plan, the plan that we didn't follow was basically a slash and burn, cut everything right back. You know, basically we've closed all the offices outside of London. You know, we would have had to let a load of people go, cut all MPD, all marketing. And it was just like, oh, that's too depressing. And we're fortunate. We hadn't diluted much. We hadn't raised a lot of money beforehand. hand. So we had the capacity to raise money, which is what we went and did. And that allowed us to basically invest through the tough time, the recession, where many other people didn't.

40:26And that helped actually form the foundation of the next growth of the business.

40:31Giles Brook:And what would you say in that period of time, this, as you say, this stress, stress period, and you guys have come out, you know, post-traumatic growth is what you were saying. how do you personally like when you go back home to notting hill how do you deal with that pressure because i'm kind of asking this selfishly as well because i feel a lot yeah and i think look i think i think actually it was always from the setup of the business with three of us running it and three of us equal partners that made sharing the burden so much easier because you didn't have to carry it around in your own head i'm in awe of people who set up businesses on their own or even with just two of you actually three allows you to share the burden much much more and that was hugely useful but then by the by the 2007-8 we actually had a you know a great top team so it was the whole the whole board team and we were just very transparent so there was so whilst we all felt it personally we we could at least sort of share the feelings between us and I think that was hugely important and one of the things we learned was not only share it with the top team but actually share it with everybody in the business because the rumors were starting to fly around the business it was like some people like oh there's no problem at all we're absolutely fine other people's like we're going bus tomorrow and every, you know, every belief in between.

41:40So we had to share very clearly what was happening with this, what the numbers were, what this meant. And by being transparent, it meant that really killed the rumours and basically get people to sort of focus on the day job.

41:51Giles Brook:What's your sort of either framework or process to say, right, this is our sort of buffet of options to grow. We're going to go for these two. Yeah. The elective call, the lights. Well, first of all, you've got to decide that's it and stick with it. So first, we've got to work out what it is you're going to focus on and get it right, because there are lots of choices and not everyone gets it right. So work out in the right, intelligently, what it is that matters.

42:24So there are lots of things you could do, which are worthwhile in their own right, and they seem good. But some are essential to success. and you can achieve success sometimes without some of them. So if you can get where you want to get without doing some of those, don't do those. Just do the ones that are necessary and essential to your overall goal. So it does start with a very clear focus on what you're trying to achieve. And I often start my leadership meetings with the phrase, which is we're only here to do one thing to make the business more valuable. Because there are a million things you can get caught up in as to what really matters in business and what our role truly is.

43:01And without going down the various rabbit holes you can end up in if you're not careful. But if you remember, and if people sit around the table and say, I don't think we are here just to do one thing to make this business more valuable. I think we have many other roles in life. Well, they need to go and do that then, because that's not what we're doing around this table. If you're working with me, and we've acquired one of these businesses, I don't own the business. We are executives working on behalf of the shareholders. And all they want is us to make the company more valuable. So that's what we have to do.

43:30not get confused by many other things so that's that's a real art though and that's like uh

43:36Giles Brook:because i think the other thing is distractions sort of masquerades opportunities and it's like oh yeah and it's like but that's what i'm trying to get into is how your brain uh and i think the first way of doing this is like what is the end goal like how do you work out like i know there's the 80 20 rule i think jack mentioned at dash about when you came in and they were trying to do the big bottles of water and you're like again does that grow the business like what are these how do you get into saying this is what we're trying to do do you know i mean um well i think a lot of it does come down to discipline in that you know you you might have a the kind of brain that flips around and you can cope with lots of interesting things all at once in fact you like that but intellectually you're smart enough to know that what success is not about doing 27 things is about doing two or three things really, really well.

44:28So if you've got a smart team of people, intellectually, they'd know that. So they just need help in doing what they know is right. So the way to do that, so if I was working with you, I'd say, well, if you were to write now in order the top 10 things you think you could do in the next year, which would make the business more valuable, and then you did the exercise, I'd say, you're absolutely sure they're in priority order. Yeah, I've gone through it, and they are. Well, I'd just tear off the bottom seven, give you back the three, and say, right, Those are the things you now need to spend all your time on.

44:58And then within a week, I'd ask you to come back and say, you can bring your diary with you. And then you put the diary for the week there and the three things there. And then say, now, put a tick against everything you're doing in the next week that relates to those three things. Wow. And if there's nothing, if it isn't 100 % of those things, or let's give you 90 % of those things, then you're not getting it. And you typically, you'd find, I'm not going to get you,

45:21Giles Brook:but you'd find, I'd do it to myself. So let's talk about myself. If there were three things that I had to do to make the business more successful, and my diary was spent, 50 % of my diary was doing something else, then I've got the wrong business plan. I'm spending my time on the wrong things because you need to spend your time on those three things because those are the only three things that matter. We've already intellectually established that. But people are, I mean, what could be more interesting than you saying to me, do you know, I've just come back from a holiday in Portugal, and there's a massive opportunity there, and I think I should go back and do this.

45:49Oh, that's very exciting and fun. Of course you want to do that, but we're not doing it. because it's not in your three things. This is going to be what listeners are going to want to hear. The beauty of what I've been part of or been able to do is if you actually look, in terms of the European Vitacoco business and the bear business, we grew that to relatively similar size. So let's just say 40 to 50 million RSV sales, right? Both of those businesses, the bear and the Vitacoco Europe. But what's amazing is that with Vitacoco, we were lucky that we had a big investment vehicle behind us. Well, two or three, we had people like Verlinvest and some other investors.

46:30And therefore, we had more cash to deploy to grow the brand of the business. But with Bear, basically, I put a load of money in. The founders put a load of money in. But fundamentally, we never, ever raised cash on Bear. we basically built bear to that level purely by managing our creditors and debtors very effectively and our cash flow very effectively we never raise any external funds to get bear to that level you try explaining to somebody that today and they'll just go that's impossible you're the last

47:01Giles Brook:one looking at you like now mate yeah no we did it and you know and everybody played their role in doing that you know back then we had a lot of the you know a lot of customers obviously you know gave good uh payment you know gave it were paying us you know and admittedly we took We could manage some early settlement fees and stuff like that to do that. Andrew did an incredible job with our both, because we basically, we outsourced all the co-manufacturing, but we actually sourced all the fruits and stuff ourselves. And then somebody prepared them all for us, which is obviously softly baked rather than dry.

47:33But Andrew did an amazing job with those guys with getting us very good, again, payment terms and stuff like that. And we just managed to, there were also, back then, there were a couple of things that we did with the, But most people, when you go to a bank, they give you all their, here's how we can help you, your money work harder for you and all that sort of stuff. And there's this beauty parade of their first tier products. But always ask what's in the second drawer below, because in the second drawer below, there's normally some things where you can actually, you know. So, for example, one of the things that we did was that we used to ship products over from South Africa.

48:07Giles Brook:And what happened was - Bear. Yeah, Bear. Yeah, Bear used to ship products from South Africa. But as soon as that product shipped over from South Africa, the bank took title of that product. They immediately paid the invoice and put the money into our account. So it meant that we got cash straight away on a product that was coming over. They obviously held the rights of it. Clearly, we paid it back once. Obviously, we all went through. Again, just clever tools and products like that, which aren't necessarily always available in that first tier of products, just helped us fund the business really well.

48:38But I think the thing to say on this, though, Dan, and this also comes down to people listening to this, is it also depends about what business you want to grow, right? And Vita Coca had aspirations to be a billion-dollar business, right? Today, it's sitting at a 1.58 million, sorry, 1.58 billion market cap. It probably, hopefully, will go towards 2 billion market cap, right? Because it's growing and growing and doing a fantastic job. but bear you know andrew and hayley were the founders of bear they would never have ever wanted to take the business on that journey and actually kind of not raising a huge amount of money not having a whole load of um investors and doing it on their own terms was their preferential way of doing it and that worked for them and i think one of the big things is is always always kind of if you're if you've got aspirations to start up a business start it up and make sure that both in terms of yourself, but also with investors you bring on board, you're aligned with how you want to grow the business.

49:34It's like today, I'm happy to get involved with businesses that go up to 50, 100 million. But somebody said to me, right, Giles, come on, we're going to really get this one, this next billion dollar brand. That's not me, I've got to be honest. That doesn't excite me. Some people love making businesses as big as they can. Mine's the exciting bit, which is getting off the ground. And then suddenly becoming, you know, like Bear and Vita Coco are both UK favourite household brands. That's enough for me. Again, if you think about the end game, you're going to want to sell this to a multinational. They don't want to buy private label businesses.

50:09There'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. They end up with a stable of wonderful brands they'll describe.

50:23Giles Brook:So when you say one brand versus a house of brands, what examples of that would be? Well. So, St. Pierre is one brand. Everything I do is one brand. Yeah. They start off with more than one brand. So, we've got more than one brand at Costa Molica. We have more than one brand at St. Pierre. But when it's a multinational, they don't want three really good medium-sized brands. They want one thing. So, what were the different brands at Costa Molica? Well, I don't want to go into all... Well, Nonamalfi. So, we have a brand there called Nonamalfi. We have a brand there called Baker Street, which still exists, but it's tiny.

50:55But 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.

51:02Giles Brook:Okay. So in order to get the best out of your business, you need to focus. 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. The struggle you have with a multinational is if I'm going to buy you, are you big enough that I don't crush you? So there are kind of rules. Say that again. If I buy you, I'm big enough. Are you big enough? Yeah. 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.

51:34The biggest failing or the most frequent failing of a brand that gets acquired by an multinational 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. If you've got three brands that make up your 50 million, they're 15 million each, that's going to be very hard to sell. So I have this argument up front because usually the entrepreneur has built up this two or three brands and they all do something different.

52:12Oh, we love it because this covers this part of the market. This is the premium bit. This is the cheaper end. 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 not the right approach. The brand didn't make up most of the revenue. And so if we're going to maximize the value of St. Pierre, the key was to make the brand very successful and well-known. And I don't know if you can pick up the packaging behind me.

52:42Giles Brook:Here's what we made earlier. So that branding there, that's not the branding we had when I arrived. the Saint Pierre name was written in a script, very attractive script, but you couldn't actually read Saint Pierre. So we were in a, I was with Perry in Los Angeles in a supermarket. And we got over there to the natural food show at Expo West. And he went up to the chap loading the shelves up with this orange packaging. And he said, you seem to be busy doing this with this brioche. You know, that comes from France. Yeah, it comes from France. He said, do you know the name of that brand? And he said, well, no, I don't.

53:17We just call it the orange one. And so Perry came back to me and said, I told you that bloody packaging was awful. They can't read the name. They call it the orange one. So that's no good. No one has a brand name. So Perry redesigned all the packaging. So my start point on brand recognition is always packaging. And so we changed the packaging so you could read. It was called Saint-Pierre. And then we went from there. We had a brilliant marketing director at Saint-Pierre who'd come in from the Happy Egg Company. and she created some brilliant online ads and social media stuff and we did very good PR and built the brand up from there.

53:54But that was the one thing I had to sort out in that business. A lot of that business was really good. It was big, it was profitable. It had a US business, but it wasn't a US branded business, not to the extent we wanted.

54:05Giles Brook:Everything to that, how do I get value for the shareholders? How do I get it to be a million? It was about the brand. Holy brand. Yeah, because if you've got a private label business, and you turn over 100 million, and you make 10, well, it's changed slightly. But you used to get sort of eight times EBITDA. So the 100 million power business is worth 80 million. If you've got a branded business, and it's 100 million, and it's all brand, you can get 15 times EBITDA for a really cool brand. So that's 150 million. So by going from private label to brand, 80 to 150, it's almost twice as valuable. So I think you need to be very clear about what you're trying to achieve.

54:40And in that example previously, we sort of had to change what we were trying to achieve from the new information that came in that actually the promotional strategy was the right way to go. But be very clear because I think it's quite easy to go into things without that clarity. Be very clear what you're prepared to trade away. So there's plenty of courses on how you negotiate. And that was one of the key things that we did at Innocent was taught everyone negotiation.

55:08So do your preparation. Yeah. I think that's key. Be flexible in the moment because sometimes there's a deal to be done at the time. And rather than going away and kind of analyzing it or actually say yes, that can be hugely useful. Just sort of seize the day. but also the flip side is like be prepared be prepared to walk away and you know say you know what this isn't going to happen because sometimes you know things will things change on the other side and they'll come back to you so it's it's that reading reading the room um is that the bit

55:45Giles Brook:you said there about the flexibility of the being able to actually accept a deal versus is there an example where you've where you've I suppose this for Tesco is the example yeah but I suppose the of maybe the other side of that is when you've had to walk away because so one of the things I write right about my newsletter is that is founders get early stage founders get blinded by the listing lights yeah whereby they're like oh my god you know they don't the deal may not work yeah they're like I just want 320 yeah Holland Barrett stores or Tesco stores and then suddenly they've done a deal they're not making money when they promote absolutely it's just a it's just a nightmare and then suddenly if you've said yes to that trying to unpick it it's just a nightmare is there it's i completely agree i guess more businesses get sunk on getting listings with the wrong terms or the wrong people or the wrong distribution than they do because they haven't got listings yes um so it is and because for all those reasons you say it's it's it's exciting oh i've got a startup business i'm getting a huge listing i'm going to go to all these stores it's like you just sort of end up not not analyzing whether it's really the right thing to do and you can easily get carried away with yourself and and say yeah i'll make it work because actually you can't make it work um and it's the wrong thing to go to too many stores sometimes what did we'll get onto like what you think are the requirements for kind of building an anti-fragile brand in grocery as well um but first like did you guys went into 10 waitrose stores yeah two waitrose stores at the very beginning actually this is the other thing is why why i don't understand why retailers put brands in way too many stores it's like i always say it's like analogous to throwing a toddler into a deep end without swimming bands they need to go in slowly a challenge a brand to a toddler he used to learn how to put the armbands on like give them 10 stores like why do you think like how did you get 10 stores or was that because that wasn't really challenging brands then or i mean it was a different it was a definitely different retail environment so i think they're probably tougher these days but i think it was we we did literally direct to store distribution for two waitrose stores because they couldn't really believe whether it was going to they were like they sort of thought this might work but didn't really believe it would so weren't prepared to give us the listing.

58:01But we were like, well, look, we really believe it will work. So we'll show you and we'll go to all the hassle of doing direct store distribution for those two stores. And it flew. You know, the Richmond store, I think, was just absolutely, you know, there was a whole end and it was just like stacked. And the manager loved it. He was like, no, honestly, this is flying. This is flying. And of course, that then builds the confidence to get the 50 store listing. And then we had to work hard to make that listing work. And then it was like then you'd roll out to 100 stores and it was very very incremental we never it was it was hugely helpful in a way that we had a short shelf life because it was completely obvious you can't go to too many stores because if you've got short shelf life and you're too many stores you're waste right so we it was just a fun it was a function of our it was completely the right strategy irrespective of whether you've got long shelf life or short shelf life to to go to the right number of stores and support them and then move to the next long it's far too easy to try and roll out to 1 ,000 stores and then not be able to get the rate of sale, the rotation.

58:59Our short shelf life meant we didn't really have an option in that strategy. It wasn't us being particularly smart. It was like it would have been evident madness to go into 1 ,000 stores. Not that we'd have got that listing at the beginning. But it's so important. What really matters is whether you're selling fast, your rate of sale, and whether you're adding to the category. If you're doing those two things, the supermarket's going to be happy, right?

59:22Giles Brook:Yeah. Yeah. And so you just, and just a bit of patience to make sure that each step of the distribution is working really well is key. And that's what we look for in the brands we work with at Jam Jar. It's what we did at Innocent. And I just think it's the way you build a brand. It's only the big multinationals who've already got huge established relationships can go, right, let's bang it out to every store, see what happens. And if it doesn't work, we'll launch something else. Yeah, it's kind of, yeah, putting too many brands in too many stores too early, as I say it's like throwing a toddler it's the death knell of too many brands or it makes life so much harder than it would otherwise be you said something that really kind of um set my curiosity going adam in terms of more brands uh kind of sync i think was the word you used with with uh listings that are going um with too wide than yeah with well sorry the wrong terms yes wrong yeah what are the absolute right terms in terms of like to build an anti-fragile brand in in grocery specifically like what are the one to three things that well look there's one thing fundamentally you've got to be able to make money you know there's no point in doing a deal that where you look at it and once you've got all your costs including a promotional course your support costs you know all the logistics bits you're just not making enough money and it's there's no point in doing it frankly um unless you're very clear that this is this is a lost leading listing because this will get me all the other things I can do those deals in a different way,

1:00:54then a listing that's fundamentally loss-making is pointless. And it's too easy to say yes to because, oh, things will change. Things will be different in the next one. But often people go, well, I want the same terms. I need the same terms. And you end up doing the same thing. And that's, yeah, if you've got a good product and you believe in it, make sure the price you charge is the price that allows you to have a sustainable business. It's, you know, both the price to make sure the profit's there, but also in cash terms, you know, these days there's less room for negotiation on cash terms. You end up, you know, doing whatever the supermarkets say.

1:01:34We pushed very hard at the very beginning to get very short terms. And that was hugely helpful in terms of allowing the business to sell fun.

1:01:40Giles Brook:I'd love to start with, I think when we spoke on the phone a few weeks ago, or a couple of months ago, before you'd done the future of food thing, is we were talking about the exit of Fuel 10K. And you said to me that you went for dinner with one of these guys and you want to sort of look in the white of his eyes and say, like, is this actually going ahead? I'd love to know what sort of happened at that dinner, if you can disclose that. What was, where was it? Was it sunny? was it you know was it sunshine was it winter and yeah talk us through that moment because i think i think there's these moments in the brand building journey where things can kind of hang by a thread and i'd love to talk me through that yeah i think it probably needs a little bit of context um as to how we got there um so uh fuel 10k we launched in 2012 yep um and in 2022 uh we had an approach um by Premier Foods, which I'm allowed to say.

1:02:43And we got quite far into the negotiation over the summer of 2022. However, as we got to the end of the summer, the inflationary environment was becoming quite a big issue for most brands in FMCG. And I think that was the reason why they then turned around to us and said, look, we're actually going to drop this. Thank you very much. But we're concerned that you might not make it through or the numbers might not be quite what we think they are. So we'd like to just leave this for a bit longer. Much to our disappointment.

1:03:23Giles Brook:Yeah, describe that feeling. Because I think it's, as Giles said the other week, there's more deals, 95 % deals don't get done. You'll be surprised when you get down the line and then it gets, and like, it's just that sort of feels like your gut's falling through your arsehole kind of moment. like describe that i think i've always been quite sort of um I don't know what the word is. Sort of open minded to this. We've always had plan A. Plan A was our plan to carry on and do the best we were going to do. And this was probably the most serious approach that we'd had. We'd had previous approaches before.

1:03:56So I suppose we were slightly hardened to it. I think the thing that was frustrating about this one was that it had taken up quite a lot of our summer holidays and we were feeling quite exhausted. And with this tidal wave of inflationary cost of living stuff coming at us, we were quite looking forward to some sort of help or a break should there be some sort of event. So I think you have to be quite hardened to all of this and never count your chickens, if that's the saying. besides we weren't actually for sale we hadn't put ourselves up for sale our numbers weren't set up for sale so when you say your numbers weren't set up for sale so we were investing in growth right so we weren't EBITDA strong particularly we had quite a lot of stuff to untangle because we had another company called Fresh Marketing which helped us get fuel out of the blocks.

1:04:54Fresh Marketing was an export business and it gave us some income to be able to make plenty of mistakes as we started creating our own brand which allowed us to avoid having to fundraise throughout the whole journey pretty much. We did take on some EIS in about year seven but I think we learned so much through that process, that 2022 process about ourselves and perhaps the dd that we needed to to straighten ourselves out

1:05:26Giles Brook:so then what what do you learn what have you you what have you learned about yourself so that's the context so then that's 2022 and then i think 2023 you've gone where have you gone for where is this dinner by the way just i love restaurants yeah yeah just to set the scene paint the picture it was up in um can i come back to that i will remember um i can't remember the name of it um French, Italian. It was all a bit of a blur, frankly. Really? Interesting. But somewhere very nice. Yeah. With quite impactful, interesting people. But so fast forward to March 2023, by which time we'd got over it all.

1:06:03Plan A was well underway. We were tidying ourselves up. We had started thinking about maybe looking at doing a process, an exit or sale process in 2024. nothing sort of concrete but we had a call from Premier again in March and that was a well we've heard on the grapevine you might be maybe looking can we have another look and it was at that point where it's like well how do I know we're not going to have lose another summer so your original question I wanted to see the whites of their eyes and know that I wasn't going to waste my team's time again

1:06:42Giles Brook:and what did they say when you had that didn't to them what were you saying to them the message was we are deadly serious yeah of course you know there might be things that make it fall over during due diligence and what have you but but the intention was there and that's that's what I was looking for and as you walked away from that dinner as you're hopping in a cab like what is the sort of thoughts in your head because you'd had that period before where you said you'd been hardened and you said you were kind of open to it but what was different this time well I think I think if I'm really honest I was reasonably numb about it I've always had the mantra that it ain't a deal till the second order's paid for Oh yes Which is quite a nice one You tell your sales people they got their first order from Tesco but are they going to order again and are they going to pay for it So it ain't a thing until it's a thing and that's probably quite a good mindset to enter these sorts of things Yeah I got stung the other day with a sponsorship deal I thought was game, set, match pass me the oranges and then it you know you tell your friends that i'm i get well way too excited so i'm sort of like it's all done go down the what's it the door alarms down the road and have a few beers but it's premature um and then you you said so 2022 to and then that next second luncheon or dinner wherever it was you cleared yourself up you had to clear the business up like what was the due diligence you had to do to get to to get fuel tank of fuel tank a into shape to then exit because i think that's really interesting that that time period from 22 to the eventual exit which was march 23 but i'm assuming that meeting was before the no the eventual exit was october 23 october 23 so the meeting was march so with you yeah it took from march to october to then get get to the end and what was the due diligence and polishing you had to do so there was so there was some entanglement with the fresh marketing business because that had been the incubator, I suppose, of Fuel 10K way back when.

1:08:41We had some shared staffing between the two businesses, particularly back office. We also realized that actually there were quite a few things that we hadn't prepared ourselves for properly. A bit closer to you if you can. Yeah, just that. There we go. Like that? Yeah. Perfect. I think we'd recognised that there were some areas that we needed to tighten up on, particularly around how we were self-reporting to ourselves on our P &L, on our forecasting and what have you. And I think one of the best things that we did, and I remember someone saying to me, the best thing you can do is get an expert in the fields that you're feeling light on.

1:09:28and we brought in a CFO who had actually just been through an exit process with the Spice Taylor to Premier Foods and he was leaving Premier Foods and we invited him to come and join the gang to join our plan A so this was before the March thing so he thought he was coming to join an exciting journey it was an exciting journey but perhaps not the one he thought he was going to join and he became a very valuable asset to just tidying up everything that we needed to do from all the paperwork to the the trademarks the the the contracts the all the things that that a big business a listed business like premier would need um we had no idea so so without going into

1:10:19Giles Brook:all the detail there's a lot yeah the most intense negotiations that you felt like you're at brown's hatch let me think let me think what was it i mean actually it was pretty um i think probably some of the most intense stuff was our first trying to get our first listing at tesco you know we'd got listings at waitrose and sainsbury's um they were really pro the brand the brand did when we did really well there but tesco was still uh holdouts not really believing in the brand or for category actually because they'd had a slightly bad experience with the previous brand and it hadn't worked that well and they didn't really believe uh innocent was going to change things that much um and but they were critical you know 30 percent market they're critical to getting the business to really work um and i remember them being very very fixed on okay if the only way we're going to do this is um by you promising to do a half price promotion uh around launch time and we'd never done anything like that we couldn't make money at half price it was it was like no way that's not the way we do it's devaluing the brand all this sort of thing um and and that's just to set the context how big was the business at this size so we were probably about 10 million turnover so we were decent scale yeah um but we haven't gone everywhere and we were still mostly little bottles rather than the cartons and um the cartons as they were there and um we i think it was a sort of it was interesting because we were like no we're not doing that we're really principled we're not going to do the half price we're not going to do this thing and tesco were very like no well you're not you're not getting the listing then sort of thing and uh it was trying to work out whether there was a way through that or whether we had to take what they were saying and try and turn it into a positive.

1:12:14And I think actually that was the realisation that actually they may be right that really the way to get notice was to do those half price promotions. But at the same, if we were going to do that, we then needed to make sure that we were building brand at the same time. So actually we needed to be advertising at the same time. And we looked at what other sort of FMGG brands had done. And I think Actimel had done very similar sort of strategies. We looked at what Danone did and that was half price promotions with TV. And this is going back 20 years so it might not be relevant now but um but we were like well okay maybe maybe we can go you know accept their demands on that if we do the tv and build the brand at the same time and and actually that strategy then completely worked and we rolled that out through it through other people and by changing our in going thought based on what they were demanding actually it made it better we we ended up that was the strategy that really grew the business for the next three or four years by getting noticed on price, but also getting the brand story out there.

1:13:15And, you know, that was pretty intense because, you know, we went from a position where it's like, God, we're not going to get this listing. It's not going to happen through to actually, yeah, we've got a deal that we're not sure is going to work. And then when it actually started working, it's like, oh, God, this strategy is working. It's great. And so it was definitely a journey that we went.

1:13:34Giles Brook:What about in terms of negotiating the big deals when it comes to the exit? Is that the same sort of principle of having two, would you have two motor nationals up against each other or like? Well, if you're selling anything, whether it's your house, your car or your business, the best thing is to have more than one potential buyer. So it's basic stuff. It's back to common sense. So the trick with exiting a business at the best possible price, apart from, is it in a big category, do we have a superior product, have made the brand highly recognizable, does it have international potential, et cetera.

1:14:13You need to have lots of people wanting to buy it. And it sounds bloody obvious, but a lot of people just run the business, get to it and go, I've got to the size I want it to be, well, we want to sell it now. And that's... So if you want to sell to a multinational, there aren't many of them. How many are there, would you say? Well, you've got the biggest ones. There's probably 10 of those. And then you've got smaller. But there's all sorts of smaller ones that turn over 6 or 7 billion that you've never even heard of.

1:14:43Giles Brook:Yeah. So there's a lot. That's a small one. There's a lot. But that's part of the challenge. So we would always work with a third-party banker whose job it is to flush out all potential buyers. So I might know the big ones. But if you went to see a banker, they might say, well, there's about 12 people in Asia who are of that size, who like your asset that you've never heard of, whether because they've only been going a short period of time or you don't know that part of the world. So part of the way you flush out as many buyers as possible is you work with a banker. And so all these businesses get sold through and they're going to hate this, like an estate agent for businesses.

1:15:18So it's like going to an estate agent and saying, I could just put a board up as well on my house, but I'm going to go to you because you're an estate agent. They're like an estate agent for businesses and they'll hate this. But they're far better than that, of course. Some of them are. and so they flush out as many buyers as possible the other point on on getting the best exit is that you need to give it time so let's say there are two people that are the perfect acquirers for your business and let's say we're um we're in the microphone business there's two big makers of microphone i've got this cool new brand here which is just got to 100 million of sales highly profitable growing like a train um one of them might have just bought a microphone business and therefore he's not in the market anymore because that happens you know there are other microphone businesses out there and one's just bought one six months ago and he's having indigestion trying to absorb that into his business so you think oh it's great i'll go and sell it now and then you find out that this one here of the two can't buy you because he's busy absorbing the previous business he bought so now you've only got one buyer and that other buyer will know that that buyer is not in the market so you've got one buyer and he knows he's the only buyer in town How would that note?

1:16:26Because in the industry, they saw in the microphone equivalent of the grocer, they'd have read, confessor number two buys new microphone business. So they'll know. So they know there's no one up against them. Fantastic for them. So you don't sell the business then. So if you're not a forced seller, you do not sell the business then.

1:16:43Giles Brook:Okay, so your patience is a massive game in this. Yeah, yeah. Time. If you've got time, you'll do fine. Oh, I made that up. Yeah, yeah, yeah. This is brilliant. If you've got the time, you do. If you're a false seller, you never get a good price. When you say false seller, sorry. Well, OK. So often a business could be doing well, but one of the investors in the business needs their money out. So you could have invested in Costa Malika. It's doing incredibly well. But you might have invested in five other food companies that have had a disaster. And you need to show a success for your fund. So even though you could hang on to Costa Malika for two more years and have an even better outcome, You could sell it now and double your money.

1:17:24You might sell it now because you need to show your fund that not everything you do is useless because you have four other failures. So you sell the cost of business early to prove to your investors that not everything you do is bad. That happens all the time. Things get sold early. So that's a forced seller. You're forced to sell. I hadn't thought of that. Yeah.

1:17:49Giles Brook:And I suppose if you're in that situation, you're kind of up shit creek as a founder or like? Well, you're not going to maximize your return. Yeah. That's another way of saying what you said. Yeah, you're not going to get the best outcome. That's the business-y way of saying it. The best outcome is to wait until all more potential buyers are available. And then you get some tension, like selling your house. You want two people to want your house. And then otherwise, someone puts in a ridiculously low bid and you go, well, we've only got one bid, what are we going to do? If you've got two buyers, someone puts in a low bid, someone puts in a reasonable bid, and then you hope they're kind of escalating and you get a great price.

1:18:20Giles Brook:This is what I was trying to, like, yeah, where we are, I'm absolutely loving, because it was trying to get to this sort of, this nuance of this almost exit El Dorado where the fucking dosh is, mate. And it's like, I think that there's lots of guile and skill in patience. And luck. And luck, yeah. And luck. I think you build your own luck, personally. But, like, patience and focus are two of those things. What are some other sort of ways in terms of the sort of things that you didn't really necessarily think about that weren't obvious in terms of the exit stuff, kind of a bit like the link it back to the team stuff, the time zone?

1:18:59Yeah, well, I think one of the key things in life is empathy. So if you want to successfully sell something, whether it's your first box of soap powder when you're a salesman or you're selling a business for 300 million pounds, the key is to empathize with the buyer and understand what their motivation is. If you're the buyer of business in a multinational, so you're head of M &A at a giant business, you want to buy businesses that do well, are a success, and they reflect well on you. That's sort of obvious. But you also don't want to take too much of a risk because you've got yourself into this wonderfully elevated position in a large company.

1:19:38You're well-renumerated. You've got a great life. So people tend to be quite cautious. So one of the ways of dealing with that is to give them a really long runway to the business becoming available. So if you just turn up and say, this business, which you've never heard of, is going to be sold the next three months, I think you should have a look. They're thinking, well, I'm the head of M &A, you've told me, I'm going to need to review that, get my team looking at it. I've then got to present that the next time our company has a board meeting, and there's a slot for potential M &A, I'm going to have to bring this to the board.

1:20:11If you went from multinational, maybe only four times a year would they have a meeting on M &A. So if you come and say, well, it's going to be sold in three months, there's no way they're going to bid for you because they're not going to interrupt the board doing what they're doing and say, I want you to look at this. You've never heard of the business. Frankly, I've never heard of it, but it's for sale. So what you do is about 18 months before you sell the business, you go and meet these people and you say, look, we're not for sale today. We haven't met before. You might not know the brand. Let me tell you a bit about it.

1:20:39And they go, oh, maybe you're lucky. And they go, well, that's interesting. and then that goes on their list of things that they might acquire at some point in the future and then when they have their quarterly M &A presentation in front of the board up goes your name and someone goes well I've not heard of this one here who's that and then well it's this it's doing very well it's in our category it's quite small at the moment it's not for sale today but one to bear in mind and then six months later when there's the half yearly review of M &A you're a bit higher up the list oh it's that one again how's it doing well actually the guy David he came in to see me he happened to be passing our office so we had a coffee.

1:21:11I've made an appointment to go and see him. But you say, I'm in your city, can I come and see you? It's doing even better. It's now brand number two in the category. We really should look at this. And then about six months later, a year after you first met him, when you go to market and the banker rings him up and said, have you heard of this business that David Miller's running? Yes, we have actually. Well, it's for sale. Someone's made a bid on it. If you are interested, you'd need to get your act together. He puts the phone and I think, it's great. I've been looking at this for a year the board know about it they quite like it this is going to be easy so that if that's how you do it yes a long runway don't be a forced seller if you want you can't always choose that in life but if you're not a forced seller and you can have this long runway to exit then that's very much advantageous particularly if you're trying to sell to a multinational and i am because they tend to be that's the perfect outcome because

1:22:03Giles Brook:that they'll spend more than anybody else i'm such a people pleaser that when it comes to negotiating i just want i kind of want the deal done do you know what i mean and it's something i'm having to work chip away at but what would you say are your kind of bait principles i know we talked kind of talked about it earlier of negotiation that you think and this is i think everything can life is a negotiation this isn't just about selling your brand to a supermarket this is about getting off a parking ticket yeah i mean like it could be anything yeah i mean there's loads there's loads of principles right the most important thing for me is ask questions to understand what the other side truly wants that's the most important thing because if unless and it's the quality of those questions you want to ask the questions that get you to the bottom understanding about what that person really needs because only then do you truly know how you can then fulfill those needs and try and secure your negotiation and i think the other really important thing as well is just be really clear about the nature of negotiation because it's like if you're speaking with the buyer at boots or you're buying a car from a local dealership you've got two different things going on there right the dealership you can afford to walk away right and that's it and it's more transactional whether you like it or not you know you'll try and sell your extra possible on the car or whatever you'll end up with this ridiculous spoiler that you don't can't believe it's cost that much but you've got to have But fundamentally with boots, you probably, most startup businesses and brands probably have to have three to five successes, three to five failures on negotiations before they then get in there.

1:23:40Right? Or else three to five pitches before they can get in there. And you just got to do everything you can. Because a negotiation isn't necessarily just trying to agree a listing or price. It's about how you approach it. And, you know, I even remember one. And the guys at Innocent remember this. We had a buyer at Boots and she was ferocious and she just hated us. And we weren't sure why. On the end, we just sent her some flowers and just said, look, we think we've upset you. We don't know why or how, but I'm really sorry. Within an hour, oh, sorry, I don't really, can you come in tomorrow? I didn't want to come across in that way.

1:24:10And it just changed the dynamic of the relationship straight away, right? And I think, you know, knowing that other side of the fence. But the other thing as well is when you are in a negotiation, it's just being really clear on your parameters. and what your true is, what you call like, you know, what is that walk away? And I gave you an example earlier about the gross margins and stuff like that. You know, don't be the person in the meeting who just gets overexcited and I've just got the Tesco's listing. But actually, I wasn't prepared or I hadn't really understood the numbers. Shit, we're only making 10 % on that.

1:24:40You know that, let's just say, as I said to you before, 20 % gross margin minimum and that could equate to a£5.20 case price. if that buyer says it's got to be five quid or nothing be prepared to walk away because it's not the 520 walk away position you're trying to get away 550 but you know that's not going to happen 520 is your walk away but the buyer says five don't do it there's a lot a lot of this is

1:25:03Giles Brook:kind of this and again this dichotomy of like the heart and the head and the ego yeah and i think you're so right and to be honest if someone who was sat across the tesco's by and they're like I probably would just do it.

1:25:18Giles Brook:But what you're saying, Giles, is amazing. In terms of the pricing, do you think brands should say they're, I mean, let's just say for argument's sake, the cost price they want to sell in is$150. Because I've had it before where you sell in at the price and then they whittle you down back to the GM and then you get so blinded by the listing, like you want the listing, so you just kind of do it. I've done this. And then you actually go in and you're like, right, I've got promotes. on loss making on promotion do you think brand should give themselves a bit of wiggle room or how do you think i know that's again the scenario you just played there the biggest advice i give is don't commit in that meeting i would be saying right tell me what you can give me so be really clear to say right so look we've established what your needs are i think i can fill these needs through here because it's like somebody saying oh they're going to give me three lines um but they want 45 % margin.

1:26:10I'm like, right, okay, what does that three lines mean? Where's it being merchandised? More importantly, how many stores is it going in? Because if it's three lines in 200 stores versus three lines in 1 ,000 stores, that's going to, should result in a different case price, right? So get all the information together before you start because the classic is, let's just say you've got, you know, a scenario you just played out there or whatever. So somebody says, all right, three lines, yeah, going to go in. we've got 500 stores and it's 45 % margin. I need a five pound case price. Yeah. Okay. We'll agree to that.

1:26:41Brilliant. Cool. Just so you know as well, I need six promotions. Each of those got 3000 pound shelf ticket fee. Oh, and also I need a 20 ,000 pound marketing. Oh no, hang on. Sorry. All our money's in the five pound case price. I can't give you any. Well, no, sorry. I need that as well now. So it's really important. Get all the information and get and know exactly what everything that person wants first and then go back never been you know very unusual but some you know very few buyers will make you say in a room right i need an answer here and now it's more case of you know going back get on the facts clarify what you need to know get the commitments as you can that you can from the buyer and then put on all-inclusive and it's that classic you know if you if you know i always start with if you can give me x y and z then i can give you this yeah start with what you need first and then tell them what you give because if you start with i can give you this great that's fine oh no no i haven't told you what i need first you know what

1:27:37Giles Brook:i mean there's just some subtleties in how you do it what else do you think you sort of wish you'd known when it came to the exit uh was it like what you said you brought in that cfo guy uh or girl i remember what you said but like what else were the other things you need to do you think you wish you knew about in terms of it but getting it ready to sell or making it run more smoothly I think we were learning so much on the job all the way through. We weren't trained FMCG challenger brand people. So you had to slightly make a lot of mistakes to be proficient. And of course, when you become proficient, all the rules change anyway.

1:28:15So you can never really know the answer to anything. So it didn't feel like we were completely out of our depth. you just put a glaze of common sense over it. It's like, well, does that actually, does it make sense? And there was a lot of long words and contracts and what have you. And we have very good lawyers and very good accountants to guide us through and one of four M &A team too. And so they were like the uncle figures in the process. He said, no, no, no, you've got to read that one. And this is quite a big deal. The terminology within it all, you don't need to go to school for that. interesting I did then take myself off to Saïd Business School to do an 8 week intense course on what the hell just happened I wish I'd done it before

1:29:03Giles Brook:what was the main thing you learned on that Saïd course because Saïd's the banging business school in Paris isn't it no no this is Oxford Saïd part of the Oxford thing just a little bit off different country 200 miles which is the one in INSEAD in Paris that's it yeah yeah same sort of thing yeah yeah um you didn't hear that guys um so uh that so the course was and i recommend it to anyone it was about two grand to do it it was the best thing um uh i wish i'd done previously uh and it was the it was all about the perspectives in the process so uh the entrepreneurial perspective and the investor perspective and the investor could be the the the buyer it could be someone putting money in it could be pvc it could be angel and the entrepreneur could be startup, medium, big.

1:29:56But what I think so many people forget is that you think this and you see this and they see the same as you, but from a different angle with a different set of agendas. It's much like the sale process to the Tesco buyer say. If you think, okay, well, what I really want to do is get this product on the shelf, but actually put yourself in the shoes of the buyer. so what does a buyer really want to do they want to make more cash per square inch of shelf space than the previous buyer so that they look good to their boss they get their bonus and the promotion that's what they want you know they're not as invested in you as your thing so if you can speak a language that plays into what they are looking for then you're going to be at least closer to to potentially getting a listing.

1:30:47But if you bang on about I'm the best and we're the best and B Corp and this, that and the other, and I put B Corp in there because that seems to be a big kind of selling point. It's interesting and important, but it's not a reason why a buyer is going to buy you.

1:31:03And so the course was, again, about perspective. It was a bit like we were talking about why did Premier buy us? Let's not worry about why we want to sell or why we think we're valuable. it's like why would a suitor buy you?

1:31:16Giles Brook:Yeah it's the difference between product market fit which you clearly had because you're in basically all the grocers versus that nuance that brand exit fit which is as you said you went on a course for two grand and I think the best way you said it Barley mate was you think like this and they see your business from this angle for people listening I'm pointing with my right hand straight forward and left hand they're coming at it from a side what what did you learn from that course then what were the one to sort of two things that really were like fuck i wish i knew that one do you know i mean um i think that well the one of them is how so if we're going to buy invest in this how how is it going to multiply um and how much could it multiply so what's a good result for doing the job that i'm in for yeah um uh i think the the quite a lot of it also is down to personalities people buy from people and people inherently have emotions um and and if you like it and if the ceo takes a box of granola back home and the kids like it back home that's going to have a positive impact effect on just generally how you know without all the science and the spreadsheets and everything else that's someone else's perspective on on your thing and so I suppose the message there is is that there's there's lots of ways of skinning a cat's the wrong phrase in this vegan world but lots of different perspectives to consider and different people have different agendas and I think that's what's the most out of all those different perspectives what do you think of some of the most underrated perspectives that you weren't thinking about gosh um uh i i actually think that i i always take everything down to people because i think people make the world go around um and and i genuinely think that you you can sometimes have what you might consider a good buyer or a bad buyer in a in a sale uh situation when you're trying to pitch to a a a buyer at a supermarket and you will sit in front of that buyer and almost instantly you know whether the meeting's going to go well or not regardless of anything you haven't even opened up your laptop or anything um and i think trying to predict that and doing your research on who you're about to sit in front of um was pretty key um and the other thing that that we sort of planned to do in in that situation was to make sure that we had two characters going into the same meeting from our side one that would lean much more towards the spreadsheets and much more analytical sort of approach and the other one was much more about how the football was at the weekend and much more kind of uh creative character so which one were you i i was banned from going in after a while but but but we did have these two characters so when they went in particularly to see a new buyer um depending how the buyer was would depend on which guy would lead the meeting from our side and you get a lot of buyers i don't want to see presentations just talk to me tell me about it some people i want to see the numbers um and we've all been in that situation if you're a sales guy you you just have it's like oh my god i am not this is not going well yeah so i mean as soon as it comes to numbers i'm flammaged i want to talk about um france and germany because again the and Giles talked about you in great terms, but he said that there was a lot of pressure to get that right.

1:35:04Giles Brook:And apparently you were incredibly stoic in terms of like saying, this is the way the brand's going to go. Could you just like kind of add some color to that period in the business and what the pressures were and how you remained stoic and then how you got it going, I suppose. Yeah. So we decided, we did a big bit of strategy work. I said, how do we expand Innocent? Do we do categories, so more categories in the UK, or do we do international? And if we do international, do we do Europe or US? And we decided to do European smoothie expansion. So that was sort of, you know, that was at least we had clarity.

1:35:42Why not US, just out of curiosity? Actually, we got very close to doing it. But in the end, it was we would need to set up manufacturing in the US as well. and it was, therefore, you'd have to launch at a reasonable scale. And at the time, the business just didn't have the scale to justify doing that. We would have bet the business, essentially, on the US. It would have been a, if it works, we're home dry. If it doesn't, we're dead. And so it was too big a risk, basically. And funny enough, the business still hasn't gone to the US. You know, it doesn't sound in the US. So I think it was the right strategy.

1:36:21So we decided on a European strategy. and it was hard and we spent a lot of money on it and it nearly failed many times and we nearly pulled the plug on it and walked to the point many times because it sort of under-delivered for many years but fundamentally we...

1:36:43Giles Brook:Why was it so hard and why did it under-deliver at first? So I think France is... Let's take the example of France. it's a tough retail market the way the trade works is different to the UK I went in hoping first of all we went in with a really light touch just hoping you know an energetic guy on the ground would be able to sort of build a great business now remember in a short life product that you've got no stores you can't store it you've got to get distribution really quickly and it was just too big a job for one person to be able to do and it just didn't work. It didn't have the support. You sort of can easily get carried away.

1:37:26Oh, everyone knows our brand in the UK. It'll be like that in France. Where, of course, no one knows your brand in France so you've got to start absolutely from the very beginning again and it's so easy to just assume a bit of success in the UK translates automatically into success internationally. It doesn't. You're starting all the way from scratch and you've got to do all that hard work that you did at the very beginning of the business all over again. And so we just, I think we got slightly carried away that we were doing well in the UK and it would work. But it just doesn't. So then we said, right, if we're going to do this properly, we're going to have to actually hire a team, do all those things that we did in the UK, get the press, the PR, just the sampling going, make sure the ads translate in a really good way, make sure we build the relations with the trade, all that stuff that you have to do to grow a brand.

1:38:14And that takes money because you've got a tiny business there and you've got a team that is losing money as a result. We then, I think, made mistakes of not getting people who were senior enough in sort of knew the retail trade well enough. And I slightly wanted to do things, do deals in the same way that we did them in the UK. and every country has its own way of doing sort of retail trade deals. And trying to force fit a UK way into a French way just was wrong, right? It was just plainly wrong.

1:38:51Giles Brook:How are they different? Just the shape of, you know, France, you end up negotiating, for instance, terms on an annual basis and you sort of have literally there's, by law, I think it had to close, was it the end of February or something, or end of January, and you had to have your terms written by then. And if you didn't, then you couldn't get the listing for the next. It was like, that can't be right. And I was sort of railing against it and pushing back. But of course, that's the way it works in France. And me saying, I don't want to do it like that is kind of irrelevant. It's like, just fit in with the way it happens there.

1:39:24And so doing it in the French way, if you're talking to French supermarkets, is the only way to do it. And same Germany, do it the German way. So you kind of have to learn that that's the way it is. consumer wise actually consumers were much more similar so um so the consumer is actually innocent stood for being natural being good for you being sustainable those that mix of things was exactly the same um in france or germany or the uk um you made sure it's local language etc but actually the changes there weren't big it was the trade that was different and how did you

1:40:02Giles Brook:we'll wrap this up so i know you've got to go in a sec but um it's just there's so many questions I've got to ask about this this one period is the so what was the what were the pressures basically saying this is this gonna work yeah we were losing money every year we never quite sold as much we said we'd do we lost more than we said we could do it's like is is this we are we just pouring we had a nice profitable UK business it was like what why are we continuing how did you know it was gonna work so I'm trying to get into your head Adam so I think the yeah no I think I think the for me the signs were the rates of sale where we were in store when we were properly merchandised we looked good actually were really good um and so it's like if we can execute this well it will work and that was the belief that was the sort of data point that gave me the belief that it would stay and it was we were messing it up we weren't executing it right for myriad of reasons some of the mine because you know wanted to do deals in the wrong way others we didn't have quite the right team other times we just didn't invest enough money but there were lots of different reasons for the different countries but actually it was definitely the belief was the data is showing actually we can get this right it really works so let's let's focus on our execution and what were you saying to like the board or the the i know yeah or the other people in the room where the pressure is to say so i think this is a they'll be and i've seen this happen where there's the pressure's from the board, and then there's the founders, like, laser-focused, like, this is where the brand, almost like the racing car driver, like, this is the way we're going, versus the wins of the investors.

1:41:39Giles Brook:Tons of people listening to this right now will be going through that. Yeah. Any advice on how to kind of detail and show, like, that delicate dance with those wins? I suppose I was always really clear on the reason I believed it would work. The reasons for the shortfalls that we were experiencing and I wasn't like, we've got to do this. It was like, look, I honestly believe I think this is the right thing but we together have got to make the decision. So it wasn't sort of, you know, me against everyone. It was me trying to be clear, the person closest to it, why I believe this was the right answer and then the board would make the decision.

1:42:22It wasn't my call as to whether we were going to stick in Germany or pull out. It was like together we had to go on the journey. And I think that was, you know, and that was kind of the way we made decisions. And it was definitely, it was like, let's bring everyone along and give people the reasons to continue to back it.

1:42:40Giles Brook:Why do brands get stuck at this five to six million pound point? Well, I remember when I worked for big companies, so I started off at Procter & Gamble and then at Mars and then at Campbell's, so three of the world's multinational food companies, anything we did in new product development, we used to say 90 % of NPD fails. So if you think about a brand, a new brand that someone's come up with the idea to launch, it is in effect a piece of NPD. And most NPD, 90%, even for the companies that are professional and it's what they do, even 90 % of their stuff fails. So it's not really a surprise that a lot of brands get stuck at a size that is not big enough to continue or to succeed.

1:43:28Because failure is more likely to occur than success. So that's the start point. I suppose the risk with looking at this sort of world of successful new brands is that you look at the successes and you imagine that that's the norm. But without being too negative, it's not the norm. The norm is to fail. It's exceptional to actually succeed. against all these established brands that already exist and have many great attributes. But if you think about why they might get stuck, it's probably because, well, it could be because the idea itself is a small idea. So I have a few rules. RAOUL PAL, What do you mean by when you say the idea itself is a small idea?

1:44:10ALEX PAL, Let's say you thought you had the best idea in the world for peppermint tea. And this was going to be the best peppermint tea. you could deliver a better flavor and a better cost and something unique. That's great. But how big is the peppermint tea market in the UK? I don't actually know the answer to that. But I'm betting it's not more than 25 million pounds. I mean, probably something that's wrong. But my point is that if you create a product that's going into a category that's quite small, then you're unlikely to get more than a certain portion of that market. And therefore, 5 million might be the right share.

1:44:46So my rules, if I'm going to do anything, are that first of all, it has to be in a big category. So whether I go back to my days in crisps, or in bread, or in pet food, and now at the moment in pizza, and in drinks, all of those categories that I'm talking about are all vast in size. I mean, pizza alone in the UK is something like 1.6 billion. The drinks market is bigger, The pet food market is bigger than that. The bread market is one of the biggest markets. So I always pick a big market. And the reason for that is that what I'm going to do is I'm going to get hold of the best quality product in that category.

1:45:26I only ever want to work with something that's got a superior product. And it's going to be a premium product because it's very hard to be the best if you don't put good ingredients in. And good ingredients are expensive. So I'm always going to be at the premium end. And so if you're going to achieve a share of that category, it's going to be the premium niche. If I'm doing it, it's going to be the premium niche. There's no point doing the premium niche of the peppermint tea market because it's probably about£3 million. So you'll get stuck at£3 million.

1:45:54Giles Brook:Sorry to interrupt. I asked some really dumb questions. But how are you finding out the size of the market? How would I find out the size of the market? it um well having worked in all those categories it's something you you you end up knowing it because you buy data yeah uh but most you could probably google half these things if i i tend not to buy lots of data up front when i'm looking at something for the first time i'd probably google it or if you want to know if it's a big category just go into a tesco sainsbury's white chosen asda see how much space it's got it's got a lot of space it's a big category i mean it's as simple as that because there's there's a lot of i mean because there'll be a lot of people who may be building something in their kitchen which we're trying to say as we're saying get to that small million sort of five million mark yes but it's like and they may be obsessed with it but unless you zoom out and say what's the total addressable market then you've got to get a lot of peppermint tea brands who aren't going to get that escape velocity yeah um i think that's probably maybe our first lot of palooza lego brick is like what's what's the tam what's the size total or to the rest of the size of the market.

1:46:54It has to be big.

1:46:55Giles Brook:It has to be big. And so the first reason they're getting stuck is it may not be a big idea. What's the second reason? So for example, with Tyrells, you go into Tyrells, like they've got to this, what would you say it was 10 million Tyrells? Well, I think when I first got involved, it was 10 million. 10 million. So they get to this point, which is sticky. Like why are they getting stuck there? Well, I remember specifically with Tyrells, The issue was that we were a Waitrose brand. So we got into Waitrose. We'd started off in farm shops and all the sort of normal places that a premium brand might do well, Whole Foods and delis and things.

1:47:36And then we got into Waitrose, which is the sort of first port of call for a premium brand, wanting to make the step from lots of small stores and quite a small business into the big league of supermarkets. So we were in Waitrose. But we couldn't get beyond that. We just got into a few sales and it wasn't really working. The buyer wouldn't return our calls because we weren't important enough. And so I can come back to that specific situation. But in that scenario, if you can't get your product into distribution so people can buy it, you're going to be a small brand. There's lots of things you need to do to be a success in this industry.

1:48:15But the most straightforward and simplest is get your product into distribution. That is the most important thing you can do. I'm assuming that we have a good product and it's all well organized and, you know, some decent people working with you. But the way to grow the business is to get it in all the shops. Then all the consumers can see it and they have a chance to buy it. But if you can't get distribution, you cannot grow the business. The only caveat to that is of late, of course, you can build a business nowadays without being in any shops at all, because you can sell it on Amazon, you can sell it on your own website.

1:48:47But most food brands do have to be in supermarkets. One because that's where most people buy their food, and two for brand recognition reasons. If you see it on a daily basis or weekly basis, then you become familiar with the brand. So I think a lot of brands that get stuck at this 5 million pound size, if that's the the size of failure. It's because they aren't able to make that step into mainstream supermarkets and therefore have the distribution required to help a big brand. And you put yourself at that exit point, and you've just been bought, and you look backwards, what were all the things that you did that created value to maximize the value of your business?

1:49:26The theory goes that you plow all your energy into getting your one market, your home market, absolutely pumping, because any time spent not on that is distracting from the core. And then if you get to a certain size or you've got some sort of opening where you can start seeding another big market, America, Germany, Australia, South Africa, Portugal, and you start what I call, you do the planning permission in that market. You don't necessarily have to do, do it. which can be immensely expensive. If you imagine how much you've poured into trying to get the UK going, and then you're talking about, oh, and we're going to go and launch in America now.

1:50:11It's like, really? I mean, that's big bucks. What you can do is set up an Amazon account that you can try and target a Costco, or you can try and do a little bit of bricks and mortar, but not the whole thing, because you can get sucked in very quickly. And then you start shelling out for kind of slotting fees and agents and all sorts of things. does depend what sort of product and brand you've got. But you don't idly wander into that market because what might happen is that you could have a really good business in the UK, fail in the US, and your buyer goes, oh, we've just done the due diligence on you and we love your UK business, but we thought we were going to grow you out in the US and you've been there and slightly ruined the market.

1:50:55And so you've got to be quite cautious of that sort of thing. all the things that we did and we looked at almost everything

1:51:03Giles Brook:What markets did you go into at Fuel 10K? So we looked at America we actually had a listing in Walmart, we were doing very good numbers in Asda, Walmart owned Asda they could see our numbers we did a tour of all the retailers that we thought were the ones we wanted to speak to in America, so literally phoned up from here and planned a trip and got meetings with buyers, Publix, Kroger i mean the whole foods um the whole lot of them really i think about eight or nine of them um and and we came back with this this listing with walmart uh 2 000 stores east coast we were like oh my god this is amazing but it meant having to set up local manufacture there were an awful lot of issues at the time with import duties of of dairy products and they wanted our porridge pots and our breakfast drinks um and so it's all good yeah yeah yeah um uh and um whilst it all looked very exciting and we did set up a company fuel 10k inc in delaware we looked at everything um at the 11th hour we decided to pull back and say do you know what this is we're not big enough in the uk and this is a massive distraction and it can be very painful if it doesn't work it's interesting opportunities masquerade sorry distractions masquerade opportunities i think and i think one of the the things from like scars or mistakes or learning is is being able to like and i think it's something you can only build through experience is that ability to sort of say this is a distraction masquerade is an opportunity it's 2 000 stores in america but it takes real sort of gumption to pull back from that like how did you do that a big man walking away is i mean I'm naturally a positive sales kind of guy.

1:52:52Yeah. That was painful.

1:52:53Giles Brook:Yeah. And that was lucky that I had a business partner and a management team that were like, should we just get some hard truths around this? So this is what will happen if, and so we started - What were some of those hard truths? The scenario playing of what happens, okay, so you get on Walmart and you've got to get this hurdle rate and we've got to get loads of product there. The minimum production runs were four times bigger than what we were used to over here. so that was one the cash flow required we also fuel 10k inc was a new business so there and that was the going to be the trading company and there was no there was no credit history on that so we were going to pay for four times the production runs on pro forma so cash flow we were buggered already um and uh and it all just seemed what else what way can we make this work why can't we there must be a way to make this work but i think having set back and then also then seen a number of other uk brands do the same thing and some of them went for it and then it didn't really work and they had to pull back and the time that it takes to exit a market like that it's quite painful but actually much better would have been to just do a little just get a few pallets over there and get it into a mom and pop store and just prove that americans want to buy your product um and And then if you feel a little bit more, you can push it.

1:54:11Let's get onto Amazon and let's go for just one retailer, but not the big biggest in the world. Let's go for something a bit more regional and manageable. Actually, because we talked about different business models. At one point in time, I was like, look, actually, give me the rights. Let me set it up. Let me raise my own money. But fundamentally, if at some point in time, you want to sell or float the business, that's quite complicated. and also you know with a backer like verlinvest what they very kindly did is i said look let's set it up as a subsidiary you run the subsidiary for us i had a very small initial stakeholding but if i hit various milestones over i think the original one was over six years so so you know i had different over each year of a hit certain milestone release more equity or more shares you know for myself but they also uh funded it for me as well so men rather than me taking the risk um and also to be fair as well to me i i had no money left at all because i'd also put a lot of money and guarantees into bear bear as well so my wife and i always joke she kind of knows how much we were literally on the bread line but and it's all relative obviously but literally every single chip went on to bear and viticoco that that you know that i had and we set it up that way uh and that also worked that's always worked and actually do you know what and to be fair to mike and Eric and the rest of the senior team is that, you know, we got to year six because of the job that being done, we then overlaid with, you know, opportunity for me to earn more equity and stuff like that.

1:55:40And, you know, luckily I managed to hit all those numbers as well. And then flow to the business on the US stock exchange on the NASDAQ and my shares were on there. And, you know, that's been incredible because whilst you've watched some pretty high profile brands and other drinks, not just UK, sorry, not just global or US brands, but you've seen a lot of flotations where you've seen alternative meat and all that sort of stuff. You've seen some horrific share price performances. Touchwood, Vitacoker so far has done incredibly well. I think it, I won't remember these numbers, but it launched around about$15,$16.

1:56:19It's hit$30 today. So for an individual investor, they've almost doubled their money, right? Which if you look at the rest of the performance and you know other well-known drinks bands i mean it's literally the highest performing beverage stock in the whole of the u.s stock exchange so how does a brand

1:56:35Giles Brook:actually like float yeah like why it sounds so yeah so i i wasn't i wasn't heavily involved in that part but i do know i have but actually on a couple of businesses i've been through looked at it i've looked at a couple of businesses on aim i mean fundamentally it's generally a public offering, right? You are giving people an opportunity to buy shares in your brand. It goes on the stock market. You will do what you call a pre-sale where you will go and speak to various different bankers, investment houses about the business. And everybody will come up with a valuation and basically a guide price for what the initial share offering should be, i.e.

1:57:14what the initial share price should be. There's always some machine laggings with that and it goes back and forward and effectively you say look this is how many shares you're going to put up for the ipo and then it goes live um there's obviously quite a few have been pre-sold um to the invest in the institutional investors and the banks and then it goes live and then you are then in the lap of the uh well i guess you're on the lap of your own own goals your own performance so i think you probably know but um typically most businesses have to give a quarterly earnings update and And you have to nail your performance every quarter because, you know, one by quarter and you can see numbers, you know, your share price can tumble pretty quickly.

1:57:53And we've seen that on quite a few businesses. And it's not just, you know, my own view, and again, everybody has a different view about IPO businesses. But, you know, you've just got to make sure that every quarter you're consistent. You've got to be completely transparent with your shareholder base. But also, you know, for me, it's about earnings. you've got to continually be delivering the profit numbers. You've got to. If you start missing your earning numbers, people get very wobbly about listed businesses. That's the big thing.

1:58:21Giles Brook:What were some of the hardest modules on that course? The valuation bit, actually. I found that really difficult because in my mind, a bit like selling anything, it's as much as someone's prepared to buy it for. And companies are so different. It's not like you can go, well we've sold 10 cars and they were all this sort of price and so it's about this sort of price um uh it and if there's hype in there um as you see in the tech world or the crypto world or um some brands are really good at hype um and some brands um aren't and so a lot of it depends on who's going to buy it and why they want to buy it and how desperate they are to buy it so you get these phenomenal exits um where the buying company just wants it and the good mna advisor will go we've got a real hungry one here and let's get some competitive tension in there and what have you and they all start off trying to i don't know pinpoint evaluation uh somehow and there's lots of different ways of doing that what so when you say evaluation that's like how much the multiple of revenue sort of or like yeah again it's so nebulous to me it's like it is a typically kind of two main ways of valuing something it's either on the profit that the company's making or the market share that someone might be buying and typically with smaller businesses with sort of 20 30 million or so and i say that sounds that's not doesn't sound small but that's kind of when trade might scoop down um because a lot of these companies we to fix can make that profit in a weekend promo i mean it just makes us all feel so small um uh but um the uh where did i get to yeah but how you how you evaluate the two things yeah different ways yeah so so profit or net revenue and net revenue is after promotion which is something that we never really recognize until going through that 2022 moment um a lot of people report on um retail revenue so what's going through the till which is a little bit disingenuous because it's not their turnover it's the retailers turnover and then a lot of people do uh well over the last three years this was our revenue added together um there's an awful lot of weird reporting that goes on out there wait so the lots of over the last three years how could you fudge fudge numbers on that well people if you were reading an im a one-page investment memorandum yeah um which i've read a few um there are a number that they might have been in business for three four years or so and they just add up their whole revenue and their volume and they go one million so it's not annualized and i suppose no one's saying what the rules are but if you are going to invest you need to know what you're comparing stuff to and how you assess the value of stuff.

2:01:21So that world is difficult. And I think also there's a lot of people who, particularly in the startup world where they're coming out the hatches, they've done their first year, second year maybe, they've got a revenue of 500 ,000 or so, and they go, we're valuing it at 4 million. It's like, well, based on what? well we think we're going to get a listing in somewhere next year it's like so you're going to bake in that maybe listing um into your four million um uh and it's you end up having quite awkward conversations with people if you want to invest also there's that whole thing adam from

2:02:01Giles Brook:innocent was telling me about the hollow no giles was about the hollow revenue curse so it's like you base your rate of sale on your first say 100 stores and then you assume is you extrapolate that to a thousand. Nice straight lines. Yeah, the rate of sale will stay the same. Obviously, like, if you've got those, 900 of those stores could be nowhere near your core customer and or in the art center nowhere. It just pillages your, pillages your revenue because you've based on this hollow forecasting. And then probably darkest day for me, actually my darkest day of my whole career is the following, which you'll probably laugh at this one, is that it's probably the day I left Fycoco stroke.

2:02:39And the day I couldn't go when we IPO'd it on the NASDAQ. So there was a selected group of, I think, six or seven of us who'd been there since inception, straight with a kind of main senior team in the US. And the whole idea was I was supposed to fly over and be there at the kind of the opening morning on the NASDAQ and the bell ringing and stuff. and you know when you've put in you know a decade 12 years into a business that's been your whole life um there was one issue and that was covid and i wasn't allowed to fly and unfortunately you could go across most uh countries by then but unfortunately the u.s i still couldn't get into the u.s i actually managed to get an exemption but unfortunately it arrived at 11 p.m and it was about five hours too late for me to get on a flight so i missed that and when you put in that much effort and also when you want to be there to celebrate with the guys you've kind of been through everything within the 12 years that's probably one of the darkest moments for me and you know leaving leaving you know i think i think you know i was obviously involved with hayley and andrew who who ran bear and who founded bear and obviously i helped support them grow that and you know obviously we sold that business to lotus and that that was a tough day but vitacoco because of the way the mic let me run it always felt like my own thing and actually when i left that business that was a big hole that was that the mentally it was quite challenging i was i felt very lost for for quite a few months actually after leaving that business when you say very lost what what the thoughts in your head was when you're out on the bike you know i threw myself into that more right i think that's when you that's on those long bike

2:04:18Giles Brook:rides or runs or those moments of solidarity solidarity kind of thing um that can actually make you feel more lost but you need to feel lost to feel found is what i believe yeah it was a tumble dryer things right it was everything from um that's been my baby for 12 years i'm now no longer with that business and there was a sense of loss you know like that you know and there was a there was a there was a big cavity that that was i was struggling obviously i was already investing in other businesses and you know doing a couple of bits of non-exec but it's not the same as kind of running your own ship.

2:04:55Now, at the same time, I also got to a place for that business where, for example, if you look at certain roles, so obviously I was CEO and I was running it, but we brought in a managing director, a lovely guy called Tim Reese. Tim has just taken that business to a level, hand on heart, I couldn't have taken that business to today. And bringing in somebody like that who has such an impact, but also to a certain extent displaced me, right? that was quite difficult as well but you know Tim is still there today still absolutely smashing out the park and done an amazing job for the business not just the European business but the overall parent company as well but you know it was just that real you know slight loss of a stroke slight loss slight loss of identity it wasn't about it just be clear as well Dan it wasn't about egos or like you know I need to be seen as the guy who's heading on this sort of thing it was just I absolutely thrived and loved doing that day in day out because it was like you know building a category from it's not just building a brand but building a category from nothing coconut water and making it one of the biggest success stories of you know the last two decades was just so much fun and so amazing thing to do and then to suddenly not have that anymore but I kind of went on the journey after that say right actually do I do something like that again and actually I realized I didn't have the energy or the appetite to do that hence why now I've on my own portfolio, getting involved in a lot of businesses.

2:06:17But equally, I couldn't jump back in and be a kind of startup founder again because I just don't have the energy or the patience to do it anymore because it does require a lot of patience.

2:06:27Giles Brook:Hey, guys. Thank you so, so much for watching this video. I hope you were loving the episode. I appreciate a really small yet significant favor, por favor. Please may you click the subscribe button. Get in the comments. Tell me what you think about the episode. Tell me what you think we did on the show. it may not seem much but it really helps us grow and helps us get bigger guests thank you so much