UK's #1 Protein Bar "Grenade": The Playbook Behind The £600M Exit - Al Barratt

0:00So you've built the business, it's got to a massive size. I want to get really into the granular details of this Cadbury's and Mondelez deal. But take me to the sort of the six months before that, like, how was your role, you know, in the business? And then what were some of the sort of unforeseen challenges to get that deal over the line? Because, as I was saying before we hit record, Giles said to me, he goes, mate, 96%, he says about 96 % of these deals, these big exit deals, or, you know, they don't happen. And it's like everything fucking hangs by a thread. So talk me through that period.

0:34The reason a lot of these deals don't happen is a lot of these businesses and brands are built on smoke and mirrors. And I think that's the problem potentially nowadays with the world we live in with social media, where things aren't always what they seem. Yeah. So and there's there are so few people who've built a big business from scratch. that's a quality business and they've had a successful exit it's i'd be struggling to probably get beyond certainly in the uk what are some of the smoke and mirrors that people are hiding behind or and or creating so when you when someone comes along and looks to invest in your business you know to the tune of well you know in our case millions and millions of pounds or certainly buy the business completely you know they do something called due diligence yeah and And, you know, it's one thing having a survey done in your house, but imagine having due diligence done on your business because it takes months and months and months.

1:31And it's actually incredibly invasive. And, for instance, we didn't actually know this happened until afterwards. But, you know, our first investment that we had, the investors, you know, they got us credit checked. and you know again i've never had any um uh bad credit but we actually felt it was probably quite invasive you know it's it's quite personal they want to dig into all of his staff people you've hired more importantly they want to go and talk to people that you fired or have left so but it's like them going around talking to like ex-girlfriends and things you know because generally now again to be fair this is actually again one of the nice things about grenade you know of course we've hired lots of people over the years many of the times you know it doesn't always work out sometimes it's our fault sometimes it's their fault someone's sometimes it's no one's fault but i think you know whenever you end those um the employment relationships well which i think you know we'd always done um and you know we've had people steal from us over the years and all sorts but generally speaking if you went to speak to someone who used to work for you what are the chances of them saying nice things about you um so the the dd process is just unbelievably invasive I know people look at all this stuff on Dragon's Den and what I've, and that's why, again, most of these deals on Dragon's Den don't happen, because people lie about numbers.

2:51But why would they be wanting to know, like, from what past employees are saying? Because as you say, like, most people who've left a business are wanting... Because it's not exactly, you know, glorious. But what are they trying to find out? So, well, they're looking for a reason to probably not pay the asking price for, you know, for the business. Yeah. And they're looking to find out what they're getting into. And, you know, and they might know what Al Barrett's like on social media. They might know what Al Barrett's like in the three meetings they've had with him, but they want to know what you like to work for.

3:19Are you a good boss? Are you a bad boss? Do people think you're a shit? Do they like you? Do they trust you? Do they respect you? Will they work hard for you? People don't just put millions of pounds in these businesses and just gamble. And again, that's why, remember as well, most businesses fail. So for them to be pretty sure that this is going to be a worthwhile investment for them, they need to know the answers to a lot of questions. You know, they were talking to suppliers, customers. We've got, you know, suppliers and customers all over the world. We still do have. And, you know, we were flying around the world going to capsule facilities, and they were talking to people that make components for us.

3:58And it just goes on and on and on. And I think after sort of several months of due diligence, you just think, oh, the questions have to stop soon. But very often, you know, the answer to one question leads to three more questions. And you do get sort of pretty sick of it. I mean, certainly going back to the first deal we did in 2013 with Grovepoint. Again, Grovepoint, our first investor, fantastic. Absolute love for those guys. Really lovely people. Thoroughly enjoyed working with them. Great for them. It was great for us. You know, they got a fantastic exit out of it, as everyone has out of Grenade.

4:29But, you know, it was also, it was our first, it was the first time we'd ever actually raised investments. So this was very much a learning curve for me in terms of the DD that they were doing. and the questions were just endless. And remember at the time, you're trying to run a business and the business was growing really quickly and I'm not looking for things to do. You know, answering 30, 40, 50 questions a day, you get a bit tired of it when you've got things to do because, you know, it's easy then for the business to start slipping and then, you know, they probably won't mind me saying this.

4:59Can I swear? Yeah, yeah, yeah. So they probably won't mind me saying this, but they'll say, oh, the business wasn't as good, you know, the numbers weren't as good last month. I'm like, yeah, because if you guys would fuck off and let us run the business, it'd be better but you know either either buy it or just fuck off i don't care one way or another yeah when you go to growth point how big's the business in terms of revenue oh we were i'm guessing we were probably doing about six seven eight million maybe at the time something like that so then you they growth point come in and they get they give you x amount of cash so yeah so that they came in and bought significant shareholding in the in the in the business they were and to be fair we didn't really need the money at the time um we needed the help and the expertise and we needed professionalizing because i think we had six staff right so we were very very understaffed at the time jules and i'd never taken a salary we'd never taken a day off we were just grafting we didn't realize actually genuinely we built something that was probably potentially quite so valuable we were just having fun doing our thing in the industry and doing things our way what other sort of questions they ask you or like if anyone's going to be going through an exit what What sort of stuff should they be thinking about now?

6:05Anything you can think of, you know, product recalls, sales, customers, territories, like I said, staff. You know, if you can think of anything to do with a business, you know, your forecast for the next three, four, five years. Is your history of forecasting good? Because if your previous history of forecasting is bad and you've been inaccurate in the past, they won't believe your future forecasts either. because a lot of these businesses as well are valued on future earnings. So they've got to be pretty confident that they know what your future earnings are going to be. Now, again, with Grenade, we always under-promise and over-deliver.

6:41So our earnings were always exceeded what we said we'd do. That's really rare. I've never met a business since that does that. Everyone over-promises and under-delivers, which again is quite frustrating. So, you know, just to quickly run you through the history of investment with Grenade, we have a£35 million valuation with Grovepoint in, I think it was actually early 2014, that went through. They exited with a valuation of£72 million in 2017 to Lion Capital. So Lion were our second set of investors and Lion were experts in brand, basically, which Grovepoint weren't, you know, by their own admission.

7:22And then some of the line investments were Weetabix, GHD, Jimmy Choo, Kettle, you know, the potato chip brand. Yep. All Saints. So just again, you know, well-known high street brands. And then, you know, they came in 2017 and then they exited in March 2021, which was to Mondalees. And that was the 200 million pound investment. and then um our we did a three-year run out then and then as of last year grenade was valued at just as of may last year 611 um million pounds sterling so and the business actually paid out you know the the the shares were paid out at that value um which i think was 27 times ebitda which is pretty unheard of so i don't think people really realize because we we we make really serious product at grenade but we don't take ourselves seriously and i don't take myself seriously but i genuinely don't think most people believe or understand what a quality business grenade was and and still is yeah just to give you some context again mondelese who have who um bought grenade in in 21 they've made two investments in the uk grenade and cadbury you know mondelese is a spin-off of craft so it's the snacking arm of craft mondelese have a market cap of 300 billion and it's a spin-off of a another you know bigger um business so gives you an idea of the size and scale um of the investment and as we said you know most of these investments don't happen that yeah it's bullshit or they'll sell a very small amount you know they'll sell you know one or 20 percent of the shares at some bonkers valuation and then for the next two decades people are desperately trying to fight to get their money back and to exit the investment everyone that come into grenade has paid good money but they've had an incredible investment and they've exited so i like simplicity you know kind of one in one out and there's just so few brands do that brands get stuck with investments that go on for years You know, I suspect now that Mondelez is the forever home for Grenade because, you know, it does extremely well.

9:43There's a lot to do with the synergies, you know, versus the likes of Cadbury. And we've got tons of IP synergy that we can share with Cadbury. And again, the other brands that they own, because, you know, Mondelez own Lou and Philadelphia, Belvita, you know, Cadbury, obviously, we've mentioned. There's quite a few brands, you know, in the US. I mean, they own Oreo. Oreo itself is a$5 billion brand. It's the world's largest cookie brand. So, you know, it's an incredible stable to be part of. And Mondelēz have just been the best partners we could ever have. You know, now there's, I mean, I was employee number one at Grenade.

10:21There's 90 ,000 staff, I believe. Fucking hell, really? Yeah, it's a lot of people there. So, again, there comes a lot of corporate stuff, but they're doing a really good job trying to keep us separate from the corporate stuff because we'll get to good and bad that comes with that yeah definitely we're going to get to the cab sorry to the cabris mondelez because i think that's interesting but going sort of back to maybe growth point that time stamp but what do you think most people should be thinking about that they just kind of they may neglect or is not it's kind of underrated or i mean there's so many ways i can answer this i mean first of all you know building a quality business quality team um you've got to have a world-class product brand or service you've got to be making money um the vast majority of businesses i see they're losing money and yet you say making money is that like profit well you've got to be making ebit die you've got to be making net profit at the end of the year um because that's a good way to value a business a lot of businesses that get banded around as well um with bonkers valuations uh they you know they've burnt through so much money which generally isn't their own um they're just looking for more money to burn through and you think well you know i won't name any specific businesses but um let's let's use a silly example so let's say you know you're a potato farm and you've got a potato field and you've got one field that grows potatoes and you know every year that field you know you lose a million pounds on the potato field um but then what they wanted is they want to have 10 more potato fields but then if you're not careful but they want to keep doing everything they're currently doing so they then you turn the 1 million loss into a 10 million loss and a lot of these businesses they're just amplifying the loss you know there's something inherently in the business that might be broken sometimes businesses do they just pay themselves too much um you know we didn't take a salary for four years yeah so any money they make they just pay themselves they're off buying range rovers and going around the world and having holidays and generally can be overstaffed i mean you know there's 140 staff there at grenade now we started with two you know we were doing at the first couple of years uh you know we'd make 54 percent EBITDA um because we kept on reinvesting the money in the business and didn't pay ourselves a salary and ran extremely lean and mean there's got to be a path to profitability i think my bizarre you know potato farmer analogy they just think they're going to amplify the loss and if they're losing money with the business because a lot of the time they think that if they have more money going into the business it's going has suddenly become profitable.

12:53And some of these businesses don't. You just end up, you know, the more money that goes in, the more money that goes out. You say more money going in, that's investment, essentially. Yeah, exactly. I think I'm always very, very wary. We always used our own money for Grenade. So it was our risk. It was our money. It was our loss if it lost money. I think there are too many founders out there, potentially, which is very happy to lose someone else's money. Yes, yes, people. So the Hungry reading list is here, right? If you listen to the podcast regularly, you know I love reading. I think books are the most beautiful thing in the world.

13:26As Stephen King said, they're teleportable magic or something like that. These books, I whittled down my gargantuan bookshelf into 46 absolute 30 bangers. The link is in the show notes to get the list, whatever. And it'll also make you a subscriber to our weekly newsletter, which I think is sick. So, yeah, get your fucking books, buddy. the path to profitability like what's how do you figure that out like what's your what's your what are some of the why is why is the path so hard to see sometimes so many brands and how would you do it a lot of these businesses and brands probably have very skinny margins and i think they as you grow a business some things get cheaper you might have you know depending what the business is, you know, with volume, you might have certain savings and certain efficiencies and certain cost savings and so on.

14:18You know, if you're in a premises, you know, and it's £1 ,000 a week rent and there's 10 of you sat there, but then if there's 50 people sat there, you're still paying£1 ,000 a week rent. So, but then you are employing 40 more people. I think people underestimate as you start employing more people, all these costs start creeping in. And this is why so many investors have been burned. This is why they're very reluctant you know to put money into businesses without enormous amounts of of dd and security which i can completely understand i'm now an investor in businesses and there's very very few that actually float my boat and i've only got six criteria to be fair yeah in terms of investing which is pretty pretty simple but i don't see much what are those six yeah i mean that yeah the the six i actually added a sixth yesterday so it used to be five but basically it's got to be backable founders so you've got to have incredible founders that you like and you trust and you can work with um you know and not and most founders as well are fairly unemployable i'd be one of those people so that's actually quite a hard hurdle to overcome because you've got to work with these people and you know i'm not the easiest person to work with i know that doesn't mean i'm wrong you know but but i'm you know not easy to work with um so backable founders and actually i'll give you an actual example in a minute of a business i've invested in where they tick all these boxes um it's got number two it's got to be a product brand or service that i would actually use and i pay for because if i wouldn't buy it why would i invest in it because if i won't buy it someone else probably wouldn't buy it either so again i quite like simplicity and if i like it i think other people will like it um something that doesn't need too much time um because i've had investments in the past where they just want you running their business for them uh and obviously haven't got time to do that um so they can't be too time consuming um it's got to be something as well that actually um is is really good fun so you can tick a lot of these boxes but let's say you know i have a shower every day as most people do but if it was a business that was just making shower heads you know and there were backable founders and um it was something i'd buy you know is it something i'm gonna leap out of bed every day and get excited about probably not if anyone wants to prove me wrong you've got an amazing showerhead company and then carry on um yeah i think that brings us to number five you've got to have a sensible valuation and again a lot of brand owners just think their business is worth millions or even billions and again it's just pouring away money and i just can't see a path to profitability and everyone cites the likes of uber they go oh but uber's worth 47 trillion that loses money and go yeah but you're not uber are you you know there's always exceptions to the rule of businesses that lose a lot of money and it's still very valuable but you know again there's a lot of you know there are very few um ubers uh you know for instance um and then the sixth um one which i actually added yesterday was you've got to have a path to exit because otherwise i just end up being a shareholder in a business and you can't get the shares out is there anything else that can slap a challenger brand or just get in as an obstacle on the path to profitability i mean again even competition you know let's say that someone pops up and they're making the same sort of product that you are but it's better than yours and let's say it's half the price um you know you've potentially got a decision to make now again we never wanted to be the cheapest at anything i think being the cheapest is a very very dangerous game we just want to be the best because, you know, let's take discount retail.

17:51You know, if Lidl were the cheapest, then Aldi comes along or whatever, then B &M, you know, someone could always come in and undercut you. There'll always be someone prepared to make a loss or make less money than you. And it's just a really dangerous game to play in. So, you know, the competitive landscape is something, again, potentially that, you know, can shaft a lot of businesses. um but the you know where you have to be careful is some of these businesses again we chatted about um where you can have like a bit of a moment in time and you know trend categories you know some of these uh trend categories do come and go so you might have a really specific sweet spot to you know build your business and exit before that that category just crumbles away i'm not thinking just like potentially energy shots you know look at energy shots in the uk you can probably still buy them it won't be a big category it wasn't even big here when it was big you know not compared to the us but i think lucaside had a go and red bull had a go and i don't remember ever buying an energy shot but it was huge in the us it's an example where there was a moment in time for that category and the big players had a go at it and you know and and and as far as i know didn't um didn't make how did you sort of how did you know protein bars wouldn't be a moment in time um because backing up um i've trained all my life you know i've trained for over over i've trained since i was 14 years old um and you know i know the benefits of training and i you know i i weight train i do other stuff but you know whether it's walking or running or hiking or swimming you know most people like a lot of people now like activity and realize the benefits of activity and obviously you know covid taught us that health is wealth um so you know do i think training is going to go anywhere whatever whatever training we're talking about no because i think once you've trained it's really hard not to train so okay so if training is staying training is quite closely linked to nutrition and again health for the same reasons um food's expensive people are quite disorganized so you know supplementation helps with um you know making it your diet easier to manage day to day so nutrition i think is going to stay supplementation therefore i think will stay um and again you know people like chocolate so um the the chocolate category is still growing and we didn't really set out to disrupt chocolate per se when we first started out with grenade we were actually more interested in in weight loss and and sports nutrition but we've made a we've made a good job i think of just capturing all the people who are falling away from chocolate um and you know in terms of people have realized the benefits now of of protein so more protein less sugar so i think if you kind of take a path through logic of training nutrition and supplements it feels like it should just get bigger and bigger and bigger so you know i mentioned a point about competitive landscape early and disruption i'm a really big believer in disrupting ourselves if we can make a better protein bar we do because if we don't someone else will so i do believe we should keep disrupting ourselves and as long as consumers still you know buy those bars and enjoy them and if they find a protein bar a really convenient way to get 20 grams of protein which they know is good for them you know whether you're training or not protein is good for you um you know to maintain muscle um tissue and muscle health as you get older certainly then and they taste so yeah and they taste really good yeah and they're almost indistinguishable yeah they're almost indistinguishable from chocolate bars again you've you've got to put them in locations that people find convenient um and again you know protein bars aren't cheap but but nothing's cheap you know so when we first launched the bar we'd got retailers comparing us to to chocolate you know they were saying well your protein bar's 250 and you know a chocolate bar's 50p i think well yeah but we're high protein and low sugar and they're high sugar and low protein so protein's expensive and sugar's cheap so how did you convince i don't like because one thing i think you guys have done and I think a lot of brands are now following suit.

22:13Do you know Surreal? Yes, yeah, I've tried the series. Yeah, I've tried that. And I think there's, because I think you guys were the first to sort of really own a, not like a premium, like really own a premium price and get huge fucking distribution because there's one thing, and this is what I spoke to James Watt about, is like, how do you go premium, the premium pricing, but actually go mass market? Like it's such a paradox. And you guys have done that. BrewDog have done that with Punk IPA. Yeah, BrewDog's a great example. How did you guys do that in retail? Because I get it now, like we can sit here, you know, and the brands, you know, with Mondelez.

22:47But back in those early days, how do you convince a buyer or those early retailers to give you the right to be at that price point versus chocolate? Well, I think the mistake that the retailers made at the time was they were comparing us to chocolate. Yeah. But actually, it was a false comparison. And, you know, it wasn't like comparing Coke to Pepsi, you know, one being twice the price. You know, as I just said, really, protein is expensive and sugar is cheap. So it wasn't the fact that we wanted people to necessarily buy us instead of a chocolate bar, although it was one of the reasons. But also you think, well, OK, let's say we're 250 and a chocolate bar is 50p or 60p.

23:28What else can I buy with my£2.50 in a retailer? and for the most part you couldn't buy a sandwich for 250 um and again bread's quite cheap um sandwiches and snacks have actually got much much much better um certainly in the in the uk 10 years ago you know you go into a petrol station and a lot this you know a lot of stuff you could buy that was part of the um a food deal was fairly poor you know you're looking at just like a you know energy drink or um crisps or you know a sort of a fairly bog standard sandwich or a pasty something like that and i know they were selling you know tons of that stuff but actually for similar money or cheaper you can have a protein bar that's actually half the calories quite filling you feel like you're eating a chocolate bar so you feel like you're cheating you're not cheating it's really convenient um and actually you know then you can have a another meal later in the day it was uh it was actually changed the context of comparing it to a chocolate bar to comparing it to a meal yeah exactly so you're getting and it's not a meal replacement bar then how did you get it in the chocolate fixture that was incredibly hard because they didn't actually want us put us put us in the chocolate fixture so where you are in store is like everything yeah i think i i could i could spend an hour talking to you about this because there's talk me through something because it's like i think it's fucking genius like you basically say right don't compare us to a chocolate bar yeah compare us to a meal deal oh by the way mate you're gonna put us next to the chocolate bar I'm going to be double the price.

24:55And I'm going to contradict myself as well here in the sense that in some stores, we wanted to be next to chocolate bars because that was - Which stores? Well, just because that was the sexiest place to be, for instance. But again, if you go into a big supermarket, chocolate bars are probably at the front of the store, not anymore. And they're at the back of the store, but they'll also have a sports nutrition section and they'll also have like a health section potentially. Yeah, yeah, yeah. And where should we be? because you could you could argue a case for every one of those um those sections in a store and the reality is now most stores including a petrol station at the top of the road from here which is um a bp mns we're in that we're in that store in three or four locations yeah and we we kind of should be because yeah so you'll find us in multiple locations in there it's one of my very examples because we're in a fairly obscure part of cornwall but um you to to even just get one location in store for us 10 years ago was incredibly difficult because we said earlier protein bars didn't sell retailers especially small retailers like you know petrol stations where they're just they're small in physical size they don't have tons and tons of shelves I suppose like a Tesco Extra would have.

26:16How do you fill those shelves? Because they don't have elastic shelves. For something to go in, something else has got to come out. And they want to be selling bread, milk, tea, coffee, chocolate bars, crisps, snacks, sandwiches, Coke, Red Bull. I mean, all those you'd find in a local store. So what's coming out for us to go in? and the the way we actually started was again with the growth point investment they had shares in um a petrol station business called rontech they've exited now they've had quite a small shareholding and through the investment with them we got an introduction i got an introduction to gerald who owns owns rontech and i convinced him to give us a space in one of his petrol stations and then that one turned into 10 and the 10 turned into 50 and the 50 turned into 500 and all of a sudden we went from being a sports nutrition brand that was in all the sports nutrition locations in the uk yeah so we we wanted to cross the barrier because i realized like we we started out you know we built and we founded a sports nutrition business we sold a mass market protein bar business and we transitioned from one to the other and that wasn't something that was an accident until we fell into it that was an absolute deliberate plan So was the rate of sale not great in that location or you just knew it could be better?

27:45In which location? So when you went into those initial stores because that's what I thought was interesting With sports nutrition or protein bars? With protein bars No, protein bars sold from day one as we knew they would but they were in the sports nutrition section to begin with. Yeah, so just backing up slightly, we still do have a sports nutrition business, which is probably still 10, 12 % of our turnover. It's still a very important part of our heritage and who we are and what we do. And it gives us the credibility and the authenticity, I think, to move into another category because we're so good with sports nutrition.

28:19We've got over 200 trademarks, design marks and pending patents for sports nutrition. You know, we're informed sport. we never really spend enough time talking about it we never really get chance to but everywhere in 2012 2013 everywhere those sports nutrition products could be they were we were number one in tesco we were number one on amazon we were number one in holland and barrett we were two percent of the entire turnover for gnc but then fast forward where's gnc now i don't think they have a single store in the whole of the uk so we were growing in declining retail because sports nutrition was ceasing to become specialty it was becoming mass market and what happened was i realized that our specialty 40 50 60 pound products that were doing well in specialty retail would never be found in a petrol station for instance and at their peak gnc in the uk had 60 stores there are 10 000 petrol stations so this was all about how can we take what we've learned move into something now that's more affordable into more of a mass market location it's still performance nutrition you know it's still sports nutrition it's still high protein low sugar but now it's two pounds fifty not sixty pounds because so many people yeah well that was 45 but you know if things like uh 50 caliber was sort of was like 59.99 so it was quite a considered purchase people aren't walking to a petrol station seeing a specialized pre-workout product for 60 you know probably more than they've spent on fuel and buying it and walking out it's just it wasn't a thing then and it's not a thing now and i don't think it ever will be but this is this is so beautiful because you're you're as i said yeah it's the transition past ultimately the path to exit as well this this sets a lot of the context is how big can it get and i think so many brands they they want to build um a brand that can get a huge exit but ultimately they're they're kind of shackled by the size of the category really yeah and again they might have the you know they might have the right product but they might have the right product um in the you know in the wrong category and like i said you know we we're dominating weight loss you know the number one selling weight loss product in the uk and it never really felt like it could be um it just felt like a really nice lifestyle brand you know it was great but i'll give an example i read yesterday for instance let's say we were still all encompassing and focused on weight loss and you know there's no such thing as a magic pill um although now there's kind of a magic injection isn't there so yeah exactly so i saw yesterday for instance that weight watchers have gone into administration i saw that as well yeah because people now want an easy fix they do want a magic pill they do want a magic injection we we know that you know diet and training nutrition are key like i've said but also imagine if you could kind of eat what you want and just have a jab now again i don't agree with it i don't know if it's here to stay or whatever but if we'd have just if if we'd have not diversified into more of a food business way from sports nutrition i'd probably be quite worried at this point in terms of weight loss because you know those those injections have come along and you know to give you an example for instance you know look look at virginia richard's been in business for 50 years and he started off with regular record shops you know and now he doesn't have record shops virgin's still here but they've diversified into other areas which i think as a as a business over a number of years you have to look at cadbury you know cadbury's 200 years old but they've just you know partnered and acquired grenade because we make something that they don't and they've got something that we have so you you have to constantly be evolving constantly reinvent yeah exactly and i think being honest with yourself and so many people just do the same thing um you know all the time and are then potentially surprised when they get the same result and sometimes you have to change the input to change the output yeah definitely so so what i'm really fascinated about is again this the commanding the price point um it's genius about how you compare it not you know versus a chocolate bar we're actually going to be comparers to a meal then when you go into retail how do you get the protein bars into the chocolate fixture and because you know and then what was that journey like because uh were you using data like how are you yeah very much so yeah it's you know and this journey is still a journey that um is ongoing but i guess yeah to answer your question you know we started so we first 2015 we've launched the bar it's doing you know it's doing really well in specialty really well in in you know gnc holland and barrett doing well in Tesco's but again we're looking at that chocolate category and I don't think even we we thought that we could disrupt chocolate because I just thought the numbers would be huge which they are huge um but you know we quickly became the number one selling protein bar in the UK which wasn't really that difficult because protein bars didn't sell as we said because nobody made a good one yeah so we quickly became number one and then in about 2017 we we'd hired someone again to start looking at the category data and specific like nielsen data and iri and i became obsessed with okay so we're a we're a big fish in a small pond you know we're dominating protein bars in specialty i wonder what this chocolate category actually looks like you know is it going to be absolute sort of pie in the sky and i i got we hired a data guy and again we said actually tell us where we are in terms of chocolate sales and we just got into the top 20 best selling chocolate bars fairly early on and actually we weren't even in that fixture no we weren't even in the fixture what the numbers were rate of sale per store per week i'd be making it up to be perfectly honest no but i mean i was i i could specifically pretty much tell you what the top five were and and again the order would would change um you know from one month to the next but you know that top five you'd got dairy milk snickers mars um how many are they doing ferrero i mean in the millions millions and millions of you know of bars um you know which you'd understand but i think with the big boys i've just mentioned about that top five um i think i was quite surprised at some of the numbers for say the the lower half of you know going towards the top 20 so like you know twix and crunchy and whisper and stuff you know they were still in the millions but it was kind of the low millions and you could go after that yeah i'm thinking actually we can we can make a dent here um and i don't know what they're going to do to to stop it and something interesting happened at the time where we were selling protein bars and i think mars had then clocked on to the idea that um people were probably after something that was a bit better for them they did they did a mars protein bar he did us a massive favor and again i think um it for two reasons actually first of all it really started legitimize the category and that protein was good for you because mars were playing in it and their mars bar was two quid so they gave us their mars protein bar rather so they gave us a fantastic leap from the price of a mars bar into the interact.

35:35They really almost closed the gap to the£2.50. Yeah, I suppose the cognitive lift for the buyer and the consumer is like, oh, you know, grenade 250 versus... Well, all of a sudden then, consumer didn't have to spend three times as much. They had to spend an extra 50p. There's Rory... Do you know much about Rory Sutherland? He's the marketing genius. Yes, yeah. He says Rolls-Royce, I think it is, will always exhibit at yacht shows where you sell yachts because you're at a yacht show, you're going to get loads of minted fuckers there and they'll be like, oh yeah. I mean, the context of a Rolls Royce next to a yacht makes it seem bloody cheap, right?

36:14So I suppose Mars has almost done that for you in the sense they've... Well, you're judged by the company you keep. And at the time, we were very much known in sports nutrition and we were doing sports nutrition shows. And there's nothing wrong with that at all. but I just wanted to be so much more than a sports nutrition brand. So I didn't want to be standing next to sports nutrition companies at a fitness show because I wanted to be standing next to Cadbury or Red Bull at a food show. So the difference, I just really had this aspiration to just compete with the very best because I knew then and I know now we've got a world-class brand.

36:54yeah so and actually you know it's important to say because i get asked this a lot in terms of people buying protein bars as sports nutrition and people will say to me you know why should i buy your protein bars you really shouldn't you should be eating a balanced diet and you should be eating you know high protein and you know moderate carb or high fat or low carb or whatever you believe in but you should be eating a good nutritious diet and most people probably know what that is but the reality of day-to-day is they just don't do it because of time and life takes over and they end up out and about uh you know you've got to be really organized to be good at diet nutrition including myself i'm not really organized i got sick of driving to petrol stations and buying something i really didn't want because i was hungry to be honest i was probably buying sushi or nuts or something at the time and i thought i'm sure i could get something better so a part of it was me thinking actually i'd buy this and if i'd buy it so would other people um and actually you know i say to people all the time you should be preparing your food yourself at home um and if you don't have time to do that or can't be bothered to do that then you should probably be buying our supplements to be fair and that's just it's just that simple we don't you know we're not desperately trying to flog product to people we're trying to give people a solution a convenient solution to a problem that we know that they have yeah and i think that's a good way of looking at you know some of some of these businesses um just coming back in then to the to the top 20 um i became i'm quite obsessive and i became obsessed with this top 20 and you know before you know we're in the top 10 and before you know we're in the top five category data i'm looking at category data and i'm thinking using the category data to like advance your position so basically we're we're we're it's difficult to get like for like examples yeah but let's again let's make that's when it comes again with chess doesn't it kind of well imagine you know let's say you know let's take um i mean you know kinder bueno i think at the time they were either number one or number two and interestingly actually with kinder they were probably the only chocolate bar in the top 20 that had been invented in the last 20 or 30 years it was amazing yeah because i think the new kind of when is quite a new pretty new yeah so put it this way i remember whisper coming out because my dad when i was at school my best friend his dad was a rep for Cadbury.

39:11I grew up near Cadbury, so we've got a specific affinity with Cadbury. And I remember him giving me a new chocolate bar to try and it was Whisper. It was like the early 80s, but Whisper was kind of considered the new kid on the block because if you look at, you don't realise how long a lot of these chocolate bars have been around. Cream Eggs, something like the 1950s. Really? It just hasn't changed because it, you know. What's the oldest chocolate bar? Because it's everywhere. Oh, in the UK. Cadbury's Dairy Milk, the oldest. Yeah, and Bourneville probably would be up there. Probably is. Yeah, probably is.

39:40So I think because this stuff's just been there forever and it's a British institution, you know, that we all know and love. I think Cadbury's has, you know, many times been voted the nation's favourite brand and, you know, for good reason. Just because it's been there forever, no one's ever really thought to replace it with something. Because I think in the past, if you want to compete with something, then you come up with something similar. So you've just got to make a better chocolate bar, which is fair enough. but I prefer competing with brands in a way that probably we're strong in their week.

40:11So, you know, I look at, I look at, and I think this is, you know, we could use Virgin Cola as an example. Virgin. Virgin Cola. So Virgin, Virgin Cola didn't do. Did that work? It didn't really work out, but again, they attacked Coke. Yeah. And I don't think they're really, apart from a, you know, a great brand name of Virgin, I don't think they really had a good enough point of difference versus Coca Cola because they were both, you know, high sugar fizzy drinks. So you were just going to swap a high sugar fizzy drink to another high sugar fizzy drink. And I think people probably said they preferred the taste of virgin Coke versus regular Coke.

40:44But I don't think taste was necessarily, you know, enough in that circumstance. I actually don't think it tasted better either, to be perfectly honest. And I don't like Coke either. So I actually like Pepsi, but we digress. But yeah, going back to, you know, the top five in confectionery, i just became obsessed with how can we become number one and distribution points is key so let's say you know if you're kinder bueno and you've got you know 200 000 distribution points and you're doing five when you say distribution points that's not stores right no it's not stores it's yeah number of facings in stores so you might have four locations four facings in a store which would be four distribution points or you could take store numbers but whatever metric you decide you then you got that number for the stores that we know that they're in and then you and the number that we know they're selling based either on unit volume or cash rate of sale and then you look at our product and make as direct a comparison as you can and let's say that the number one selling chocolate bar is in a hundred thousand locations and he's doing you know five million well and then we look at us and we're in 10 000 locations but are doing four million we've actually got the better rate of sale so you think well if we've got 10 000 yeah we've got less distribution points so so we're saying well look look how many they've got and what they do look how many we've got and what they do and also look how much cash it puts in the till because the one of the first conversations i had with rontech and the petrol stations were you know every time you sell a chocolate bar you make 13p every time we sell one of our bars you make one pound 50 what would you rather have in the till you've got to sell 10 chocolate bars for every one of our protein bars that's quite compelling to a retailer so all of a sudden our fairly high price is actually a massive selling point yeah um did you use so then because sorry i love really getting deep on this it's i find it such a fascinating game but like the with the with the petrol stations did you almost use that because that's when you're in all as i was in the bp last night mate like you're in it's like fine then you've got the big it's everywhere it's like a gondola end well not a gondola end like a fsdu you know what they've realized so again this goes back to another conversation i had with ron tech fairly early on and gerald ronson told me this he said you know where do you want to be in my store and i said at the till point and he said no you don't why did he say that because everything sells at the till points they don't learn anything so he said yeah so you can put because everyone sees it yeah so what he said about you don't learn and think is so what because he because he knew if he put us at the till point we'd sell quite a lot but it wasn't going to live at the till point forever because that is prime real estate and people pay for that so um it wasn't it wouldn't have been a fair trial so he said i'm gonna put you at the back of the store and basically which he did and i went to that store it was in peterborough and i met the store owner and i gave him a t-shirt and gave him some samples of bars and i said everyone who comes into the store ask him if they want to buy a protein bar and explained again the well you could make 13p or you could make one pound 50 or whatever what would you rather have and then get we got the data and then we did that with 10 stores and 50 stores like i said and before you know it not only are we out selling chocolate 10 to 1 but we're actually the cat that were their cash margin is 10 uh 10 fold as well so everyone's winning and actually you know again really apart from the confectionery companies but to a certain extent the confectionery you know people are still buying chocolate but also they've kind of had it to themselves for the last 100 years so you know that's how business works someone comes along and you know we're a lot more expensive and we're different products if you want to go buy chocolate go and buy chocolate we all like chocolate but if you want something different this is something different so we've been an absolute nightmare to compete with um for confectioners because there's not a lot they could do coming back to the the mars protein bar example for instance they it helped out with the price point we've actually never ever spoken to mars either which we've spoken to everybody else but we've never spoken to mars it's strange um but especially seeing as they were interested in this category um and i can't remember the numbers of how we would outsell their mars protein bars but i mean it wouldn't even be in the same planet in terms of what we sell versus what they sell and there's a reason for that and that is they do a mars bar which is fantastic and then we do a protein bar which is fantastic and in the middle you've got that sort of mars protein bar i'm going back 10 years and it's not the best protein bar and it's also not the best chocolate bar so it goes bang in the middle of you're a little and people are a bit meh what compete what yeah what you're strong at they're weak at exactly and i i bought a few boxes of that because i thought because also i love the competition it's mad yeah that's a consumer that's exactly once because it was a it was a it was a novelty thing yeah and i think there's just it's too much of a heavy lift for the consumer it's like it's so entrenched if that a mars bar is a fucking mars bar and like and And then a protein bar, you own that category, you know?

46:12And I think it's just... And we know where they're made, and they've done a really, really good job with that. But the problem is, you know, it's fairly high in sugar. You've got to overcome the sugar issue. This may have changed now, but I think at the time it still had about 13 grams of sugar. It was just too high. Yeah. And, you know, all of a sudden compromises start sneaking in, and consumers and brand owners don't like compromises um so it it kind of ended up being no man's land and i bought a few boxes of those bars i ate the first sort of two or three and i thought oh just i just wanted it to be better or a mars bar to be honest so um and i knew then i thought actually you know again because this could kill the category to be fair um what are some of your favorite failures on the journey i mean just well talking protein bars we had 41 versions that we didn't like yeah but that was there were 41 versions of how we learned more about how to make the protein bar that we actually wanted yeah as opposed to sort of failures on like the on the way to the exit deals i mean yeah i mean there'd be stacks i mean you know there'd be certain deals i'd do there'd be um other deals i wouldn't do um you know there'd be people i i'd hire um who i didn't there'd be people i wouldn't hire you know who who i did um so there's always things you'd look back and and and be uh you know reminisce because again if i invented a invented a retrospective scope you know i could go back and do things differently but otherwise you know for the most part i'm just i'm really happy and proud of the journey that we had today and actually we're still on because i still feel you know we talked about cadbury's 200 years old grenade is 15 so where do you think grenade could be in 200 years time yeah um so where do you think that could be i really don't know i mean it's really impossible at the moment to say where grenade could be in a year or two's time because if everything's going on in the world and um you know the the the pace of which we've got change and ai and whatever but i genuinely believe that you know people will keep training i think nutrition is going to be you know just as important and more important than ever as we live longer and all these diseases and stuff out there people have really got to think about what they put in their body um and as always we'll keep disrupting ourselves and making the best product that we can put them in places that consumers find convenient um and most importantly enjoying the journey so few people just and actually you were talking with james watt earlier james did a great post yesterday about he wished he enjoyed the journey more i'd have to agree with him yeah in the sense that i have enjoyed it but i've missed a lot i mean even i don't think i'm successful so because i know people who i think are successful and they don't think they're successful you know so there's always someone who's got a bigger brain in a um a faster plane but i like that yeah but well i you know i i spent time i was on uh i was on necca with uh richard b a few years ago and again i was looking at one of the neighboring islands which he also owns and i was saying to him actually what does it feel like to get there and he said, I don't know where there is.

49:20You know, entrepreneurs just can't help themselves. It's a fantastic skill to just, you know, be always hungry. But also it can be a real curse where you're sort of never satisfied. So having contentment's really important because again, he's looking at his neighbors, one of his neighbors owns Google, you know, so you're always looking at the next person up and, you know, it's dangerous. How have you got better at finding peace and contentment? I've got better at it by comparing it to training. So when I first set out training, when I was 14 years old, I had certain things I wanted to lift, I wanted a bench, deadlift or squat X amount.

50:04And I just had goals. I surpassed all those goals. And then, you know, things can get a bit boring. You just don't keep on getting bigger and stronger. so i changed the goals and i found contentment by realizing that being happy and healthy is gives you all the wealth that you ever need um and actually everything i've achieved today is great and i'll go and do other things and i'll go and do more things and those things will change so i think you just stop beating yourself up for not having done more i guess is what i'm saying Yeah, it's interesting because there's a guy, because I'm the same, I'm always the next guest, next hurdle, next thing.

50:46You do have to do that to a point, but you also have to just say, actually, you've got to stop, take a breath and go. You actually mentioned an interesting thing earlier. You've obviously come to my house in Cornwall. And when you were here last time or the time before, you were on your own. There was one of you. Now there's three of you. So you have to keep making these comparisons and actually give yourself a pat on the back. Yeah, I mean, I'm the worst at that. Improvement. And sometimes people think improvement is financial. Sometimes it is. Sometimes, you know, we had years at Grenade where the business looked fairly flat financially, but we had a better business.

51:21so let's say the the turnover or the profit might not have gone up it might have gone down but then thinking that but actually last year you know we had 20 people and i wasn't happy with five of them and now we've got 40 people and they're all superstars but but we're turning over less but that's a better business what i needed this is exactly what i needed to hear and as i said all these questions are selfish questions right um because that's kind of what we're at now is like the as you know if we were to do this two years ago or a year and a half ago it's me on my wands kind of walking around fucking cornwall like a lemon you know and you've been chasing me for years and actually fair play because you have persevered and i did say i'll do it but also there has to come a point where it makes sense for sort of both parties as well because i i don't do as many interviews as i should do just because again you know time and and whatever but uh i'm really glad you stay persistent with it and the podcast has grown and rightly so and again then you just it's all levels you just keep going to the next level it's mad that this week has been as i say kind of two big dogs yourself and michelle roos and but i think you're right is i'm looking at the wrong metrics in terms of like when's the next bit of money coming in and actually it's like you know i've come down we went for a banging meal at four boys and rock last night yeah rock's lovely it's absolutely gorgeous and i was like the sun was setting that's four brothers that own that i've not i've not actually they'll love the plug to be fair i've not actually eaten in there as it's been four boys so good but it's a great yeah it's a great name i'll go there this weekend yeah yeah i mean the focaccia bread is just like otherworldly but i love to see people i don't know them from adam but i love to see people do well yeah i genuinely i get off on it i think i spent a lot of time in the u.s i actually had a house in america till until fairly recently and i think in florida i had that for 14 15 years and I think I've sold it now but I think that's very much an American mentality where they're really pleased for you and I'm not sure we've got the same mindset in the UK.

53:23I'm not actually sure they've got the same mindset in the US anymore either but I genuinely, if I see someone doing well even again in a competing business let's say I was chatting earlier about competition you know, if you're just on your own in a category that's one thing but let's say there's three four five brands and you're all good you could you can maybe have you know a smaller share but have a much bigger category but collectively you can all do things differently market differently but pull more consumers you can share consumers you can learn more i think it's a really good way of keeping you competitive and honest and making the best product you can so i think competition is really good i can't remember who said this but like a bit linking this back to your focus on your strengths their weaknesses competitions a mirror so i don't know who told me that and it was like i can't remember but someone's like competitions a mirror and what so many people do is they try and copy the competition and actually the competition is like be more grenade and well if you if you look at the competition you tend to look like the competition yeah exactly if anything what his point was is the mirror should be like the whole sort of point of that is focus on more of what you do you know well i mean you know we're a niche business but i love i love niche businesses because we've actually got 50 % market share.

54:39So we've got a, because we've got a very dominant position in a still a fairly niche business, which we think again can grow exponentially certainly around the world. Because, you know, do we have the number one selling protein around the world? No. Do I think we can do it? Absolutely. So that's the next goal really. There'll be other smaller goals before then, but that's an ambition to make it the best selling protein around the world because who's made anything that you can think of and it's the best selling one of, best selling item in the world. Yeah, yeah, yeah. I can't think of any examples at the moment of people still alive, where they've actually got the market leader.

55:10The bit I want to talk about is that we may have not had growth in terms of absolute terms, but we've grown and we're a better business. Because a lot of people will go through that kind of period where it's kind of just a... You think you're getting nowhere. And that's perfectly normal. That is normal. I still feel like that. I have days like that today where I look around and I think, am I achieving anything here? Because again, because I've been such a high achiever. if I don't have these like absolutely monumental days where I've done something extraordinary, I think it's been a wasted day, which is terrible really because sometimes like you can have a day where you just kind of chill a bit and that itself just taking some time to pause actually makes it a really productive day for a different reason.

55:50So you know what you're saying like how there's the sort of the theme of like, oh, entrepreneurs are never satisfied, right? And I think there's that, but also and this is what james smith taught me he goes i need to be productive to be happy and i think it's a really good way of looking at it but he's also productive because he's happy yes yeah yeah yeah as well it's okay it's a vicious circle interesting yeah that's rich to be fair richard b always says that he's not happy because he's successful he's successful because he's happy what underrated lessons you've taken from him that you'd only get from him by being on necker island with him i mean again the not knowing where there is is a really powerful one um the power of simplicity i love how he looks at businesses and i i've been really fortunate so to help going well for instance so i was in africa with richard a few years ago and he was sort of sitting in his his chair where he looks with um with his pa and they were again he's got a fantastic view of the the sabi sands it overlooks sabi sands incredible view and again you can see wildlife coming past and stuff and as always he's got messages and emails and stuff to do and um and i think he um helen went off to go and do something and um richard was just sort of sat there on his ipad and um i was just sort of walking past and our eyes caught and he said oh do you want to kind of have a sit down he was looking at buying grenade at the time so this was 2017 which didn't happen actually but i'm glad that didn't happen but i'll come into that later um he was looking at grenade we sat and chastened about grenade and i saw what are you working on and he was working on virgin galactic and he got it on his ipad and he just he just showed me the 20 questions that he was asking his team about space travel what were some of those questions oh just how long does it how long you know what does it cost to build a spaceship basically specifically uh how long would the you know how many um trips could you do in a day or in a week you know how many crew there'd be the staff that were involved where it would go from where it'd go to um the oh just just the most simple questions you could think you know what each trip would cost them in terms of their hard costs what do they think they could charge a consumer i mean just the most basic question you could think of for any business and it was space travel yeah and i just thought god he simplified that i mean there'll be a load of stuff beyond that obviously but he just likes simplicity and the answers to those questions would tell him whether or not that was worth pursuing or not it's mad mate because so the power of simplicity should never be underestimated to be fair yeah because so there's um this is what i was asking james what about right and um i think the the smart answer lies in the dumb questions like we're so often asked looking for a great answer but actually it's like i don't have any clever answers you've noticed i can just tell you what we've done no but no but and then so i was speaking to james what about this and because actually i think what founders need is a better set of questions because that's the and so what some of the ones you know james asks himself what are the biggest five problems in my business happening right now that's one he goes how do i um how do i 10x the growth of my business in six months they're like questions to get you out of like the small thinking or just questions the other and I like is like what would this look like if it was easy which is Tim Ferriss and it's like okay suddenly all this bollocks that's in your head fucks off and you're like oh I've just got to do that it's so out of everything on your journey mate what are like some one two three questions that you sort of like to ask yourself not necessarily to the team but like it's like just to get a steer on how things are going or like if you've got a problem you're like I don't know it could be I still think it probably it comes back down to my five or six rules of investing as in the sense looking at looking at grenade and again going back 10 years and looking at the the growth of the protein bars first thing going would i eat this because if i wouldn't what's why would anyone else secondly would i pay that where would i buy it from um what are my alternatives you know what else is on the market and i think just being really honest with yourself is pretty important because I think people aren't honest with themselves and they convince themselves that they've got different answers maybe to those questions than they really have.