The Manchester Boom - Special Episode

0:00Hello and welcome to a special Wake Up To Money about the performance of the Manchester Manchester and the surrounding region. Not because we broadcast from the area every day in Salford Quays, but because the whole country has been standing up and paying attention. Wake up to money with Sean Farrington. Fair to say Manchester is having a bit of a moment right now. Greater Manchester is the fastest growing part of our economy. The growth rate double the UK average. And over the past few years, we've seen plenty of impressive business growth, lots of innovation coming out of the region as well.

0:32That's why we wanted to get a few founders and chief execs in the room together to discuss what's been driving that momentum. What is it about Manchester that's been making it such a good place to build, to grow a business? How does it compare to that word, London and other UK cities? Are there lessons we can learn from other cities' successes as well? We recently heard this, didn't we, on the programme from Tom Behan, the co-founder of sportswear brand Castor. There is a deep pool of talent in this part of the world, really well-educated, high-skilled, driven people, communities. There's an ambitious outlook on the world.

1:09Manchester is a destination for many of that talent group, which is brilliant. And that feeds off itself. That means more businesses want to launch here. That means there's better housing here. That means that the tax rate locally is higher. So that summarises some of the excitement and interest and pride. No doubt that will be something that comes up a lot as we get into what it is about Manchester and Greater Manchester for businesses. So let's crack on and speak to three bosses of pretty big businesses who have joined us in the studio here in Salford, the city right next to Manchester, part of Greater Manchester.

1:45I'm going to go around one by one and ask them to say who they are, what their business is and what their links are to Manchester. Good morning, I'm Lawrence Newman. I'm the founder and CEO of a company called The Beauty Tech Group, recently floated on the London stock market, probably best known for one of our brands, Current Body, which you'll have seen all over the place with our LED mask, no doubt. Started and founded this business in the northwest of the UK and also now employ about 250 staff just outside of Manchester in a tech park called Orderly Park in a place called The Glass House. People might know the name Alderley Park because historically, that was quite a major hub for one particular industry, wasn't it?

2:28Yeah, it was AstraZeneca. I think everybody in the country really recognised that. And they've turned it into a really thriving tech park with some amazing businesses in there. And I felt that was a good base for what was current body, now the Beauty Tech Group, because effectively we are fundamentally a tech business. Well, Lawrence, thank you for being with us. Next up. Hi, I'm Emma Zachary. I'm co-founder of Hip Hop. So we are a soft drinks brand based in Manchester. We make better soft drinks with gut-friendly ingredients, but without compromising on taste or flavour. We are stocked right the way across Manchester and Greater Manchester in restaurants, bars, coffee shops, independents.

3:12But we're also stocked nationally, so you can find us in Sainsbury's, Morrisons, Waitrose, Ocado, Co-op and also internationally so we're available across Europe. I guess we've got a really simple mission here in Manchester which is to build a massive global consumer brand from the heart of the city so our main office is in in central Manchester and we've also got a manufacturing facility under the arches in Piccadilly and we're really here to challenge those mainstream pop brands with a better for you branders real refreshingly real tasty good drinks and that's piccadilly manchester isn't it correct people might think it could be a piccadilly elsewhere but that's the main one for this show and finally i am sean lorton i'm the ceo of on the beach we are an online travel agent we organize atoll and abta protectors package holidays for people to go away to beach and city breaks both in Europe and further afield.

4:13We send around 2 million people on their holidays every year. We were founded 20 years ago and are still headquartered in Manchester. We're based in Ancotes just behind Manchester Piccadilly Station where we employ about 500 people. So let's get into a few of the little topics that you've brought up there and those reasons why either you chose Manchester or maybe Manchester chose you and to this day you're still focused on the region around it. So Sean you mentioned they're founded in Manchester. Is that part of the story of the business these days? Would new staff arriving from all over the country have a feel that this is where you've always been?

4:59Yeah I think they they certainly would i mean we were founded there because that's i suppose where the founder lived when he started the business but you know we really do have roots in manchester now um even though we employ people from around the country about 80 percent of our people are employed within 30 miles of manchester city center so um uh yeah i would say definitely everyone that you speak to in our company would know it as manchester based as would our investors and a lot of our customers. So even when we look at our customer base, we sell holidays to everyone across the UK and Ireland, but we still over-index for selling holidays from Manchester, flying out of Manchester airport.

5:42And I'd say that is because of, you know, where our legacy is from. And you're an online business. We are an online business. So people going to your website don't necessarily, you know, they're not getting a particularly Manchester experience on the face of it, yet more people in the Northwest might be using you. Yeah, that's right. So there's clearly some value there. So has there been a point in the history, whether when you've been there or maybe when the founder was making decisions in the past, where there was a decision to make of, are we going all in on Manchester or might we need to move to another city?

6:20um yeah i think there will have been a few moments where that's been considered so um the business i think was founded in macclesfield um and had homes in didsbury and cheadle before we moved to the city center in the south of greater manchester in the south of greater manchester um in 2015 the business listed on the london stock exchange and obviously the a lot of our institutional investors are based there so i split my time between manchester and london um but the obvious choice i think has always been to stay in manchester we did the biggest move i think we made was from uh cedal into the center of manchester and that was to make sure that we could access the best possible talent particularly digital talent and we see manchester well we saw manchester back then in 2018 as a real draw for tech talent and I would say that's still the case.

7:17Very interesting. Emma, you mentioned that, how long have you been going as a business? 2019 was when we built our base and really got going. So when you did that, why was Manchester chosen as the base? Was this historical links? Was there something about the market in Manchester? Well, I actually moved back to Manchester to build a brand. So I lived in America, which is where I learned about the sort of drinks that we make or the type of food business that we're in. And I came back to Manchester. The other co-founder, Kenny, Kenny Goodman, he's from Manchester, so he's born and bred. I think Manchester has an amazing food scene, an amazing hospitality scene, an amazing cultural scene.

8:07It's a place where a brand like us in a new and emerging drinks category can really test and trial. So when we started up, we visited lots of farmers markets around Manchester and the wider region. We were stocked in independents across the city, you know, the likes of Pollen and Ancoats, for example. So it was a perfect place where we could test our drinks. So we make the sorts of drinks that we make are very new. You know, they taste like traditional soft drinks, but they're better. You know, they don't have sweeteners. They've got less sugar. They've got ingredients in them that can benefit gut health.

8:46And if you can make those drinks work in Manchester in this massive sort of diverse populace of lots of different people, then we know that we can make them work nationally and internationally. So it's been a big part of our story. And you mentioned Anko's there. We're going to get a bit of a geographical lesson, I think, over the course of this conversation about these parts of Manchester. because Adco is pretty central Manchester, isn't it? That's where the city centre had been redeveloped in the last few decades, I guess we could put it that way, but particularly in recent years. What is it about where you are, almost why you chose to be in that part?

9:24Is there a cluster of businesses? Is there a feel of entrepreneurial sort of energy there? Yeah, so you're right. It's a very sort of up-and-coming part of the city. There's a huge variety of our customers there right the way across the city as well. I think, you know, we could take our drinks to Shoreditch in London where all the cool hipsters are. And there's a lot of cool hipsters in Manchester too. But if the drinks work beyond that in Manchester, once you get out into the suburbs, you know, into the stockports of the world, then they really will work anywhere because you've got this great, big, diverse populace.

10:01Also, people in Manchester are not afraid to tell you what they think. which it can hurt your feelings sometimes when you start up, but you certainly get the feedback you need to grow and deliver a consumer product. That's for sure. And Lawrence, boss, founder of the Beauty Tech Group, you've had a few places named already. What's the importance of Manchester to you guys and the wider region? Well, I think only echoing what Sean said about it in terms of the talent for tech that exists around there. And also, you're talking about Ancotes. We actually run a coach from Ancotes every day to take our talent from there.

10:42And as you said, it's a great place to live. Because people are living in the city centre. So many people live in the city centre and we take them out to, look, it's sometimes a little bit challenging to get on the rail networks out to Leaphy, Cheshire. But in order to do that, we run a coach. I want to get into that, actually, they're living in manchester in a moment just in terms of why why here and and just just to sort of um finish the finish that off we we're quite unique in many ways actually 80 of our businesses outside of the uk 90 of our talent and our all of our teams are based in manchester if you think about that that's quite an unusual situation to be in um i'm from the northwest i think it's an incredible place i think the um the tech scene has continued to evolve um it's a great place to live um and so it fitted the growth um of the business and so that that living in manchester and and where people are as we sort of have a look there's been a lot of interest in in why manchester has seen this growth of late and there's loads of stats about all of this one that jumps out that people might have heard before is that back in the 1990s, there were literally just a few hundred residents in the city centre of Manchester.

11:59Now, it's clocking on more than 100 ,000 people. You may well have seen that change over the years being from the area yourself. What is it that's gone on there? Well, I think you can only look as far as the universities. There's five universities in Manchester and the stickiness of people wanting to live here post-university. I think it's obvious to see. You've probably seen the statistics from that. I think it's value for money compared to living in London. It's a great place to travel from, like Sean's just indicated, out of Manchester. And there's some incredible businesses in the north-west of England, which has continued to evolve over the last 10, 15 years.

12:39So there's a lot going for it. Is that needed? Do you need a bit of a critical mass, a number of businesses to keep people in the area? You might have the great unis, but if they decide to advance their career somewhere else. Well, look, fundamentally, they've got to be great businesses as well. You know, if you think about the area, it's not just about the area, it's about are those businesses ones that people want to be part of? And if you look at the Beauty Tech Group, we're in beauty, which is a robust industry to be in that a lot of people are interested in. we're in technology, which again, I think people see as part of the future.

13:14It's fast moving. It's still entrepreneurial. So I think all of those elements represent our business, but I think they represent a lot of businesses in the Northwest as well. I think they're the fundamentals of some of the successful businesses that you've seen that have grown here. And do you need that? Over the years that you've grown, do you need those other businesses to be doing really well? Absolutely. It's all about that ecosystem. And I think you could name many businesses that you've had on your program. You talked about Castor before and fast fashion and the like, but there's so many technology businesses.

13:48I think Manchester is becoming known as a tech hub, isn't it? And there's a very good reason for that. But it's all about, you know, I think having a great place to live. And we talked about Ancotes and how that's upcoming and value for money and the surrounding area continuing to evolve. but it's all about those businesses and wanting to be part of them and part of their growth. Sean, you've mentioned there's a few overlapping themes here but in terms of that talent, buses out from the centre of Manchester we'll get on to the regional transport, no doubt at some point the transport out of Manchester around the country you've talked about some of the positives there But for that talent, what is it that you found about Manchester and Greater Manchester that has enabled you to have confidence that you're in the right place, that you can grow your business and continue to?

14:44I think it's not just, well, obviously the talent that's within Manchester is excellent. Lawrence mentioned the university I think there's you know Manchester punches well above its weight in terms of quality of university and number of students versus most cities in the UK and probably internationally so it's got a lot of really good talent that's both homegrown and is attracted into those big universities but you know even if we're looking for talent that may not necessarily exist within Manchester Greater Manchester it's a big draw for people to come and work for a business that's based in Manchester because it has that, I guess, that international reputation.

15:23So we have people who are based across the country who will come and work for us. The transport links into Manchester are very, very good from most places in the country. And the accommodation in Manchester is abundant and good as well. And people like spending some time here. It's culturally very rich. The entertainment and nightlife is very, very good. so yeah it's a great great attraction for people who are both living here but also people who want to visit and work do you find many people choose to move to manchester uh we do well i i think maybe that sometimes happens earlier in life i think the way businesses are set up now you don't necessarily have to make that decision you can you can experience and you can manchester can be a big part of your life without having to make that full commitment to move there so i think those decisions that are sometimes made early in people's lives, particularly when they go to university, they don't, if you're a bit later in life, you don't necessarily have to make the move.

16:25You can still enjoy the city and I guess bring, you know, economy to the city as a visitor. Emma, for those in other cities around the UK who might be listening to this and seeing the attention Manchester has got of late and thinking, you know, But what is it that's different there? Am I right in saying you're from Leeds yourself? Originally. Originally. And then, as you mentioned, had a time in America as well. So, you know, you've experienced different places. What do you think Manchester has brought in recent years that other similar places might be able to learn from and capitalise on? Well, I, you know, I came back, right?

17:09So you're right, I'm from Leeds. I've lived in America. I've lived in Sheffield so I've lived in a few places in the north culturally I agree it is so rich and for me as a person coming back to the city that was a massive draw I think Manchester has some really interesting and really effective governmental aspects of it that really have supported us as a business so I think the Greater Manchester Combined Authority, Devolution, that sort of coordinated leadership of all 10 local authorities in the area has had a real big beneficial impact on the city in lots of ways um as a business is actually just last week we received a some financial support from the combined authority alone from there i think it's the gm advance fund that's going to help our innovation and manufacturing capability under the arches in Manchester Piccadilly and what that is going to do is going to help us progress a lot faster with a piece of ingredient and manufacturing innovation than we would have been able to do if we didn't have the money so I think that's a really good example of how as as a local government I guess Manchester is investing in businesses and supporting businesses I think too in terms of the other aspects of infrastructure that can help businesses in the city so you know I think the The banks can get a bit of a hard time sometimes about how they support scaling or startup businesses.

18:38But we've received a lot of support from the regional branch of HSBC in terms of really supporting us to grow. You know, they've spent a lot of time getting to know us. So I think the size, the scope, the potential of Manchester has been really... When you talk about banks, is there sort of a sweet spot almost where you want that regional? because many parts of the UK will have that regional office of a big bank, but where you want it to be important enough, big enough for that bank that they are quite excited and invested in the area itself. Yeah, I think what's been really exciting, actually, I mean, we bank with HSBC, but they've been very, really keen to look at how they can grow businesses in the region.

19:26You know, they spend a lot of time and effort and money on investing and taking the time to get to know us as a business. You know, there's various events, there's other support that they've given us, you know, as a bank. I think there's definitely, definitely a key sort of element of their strategies to build out in regions other than London and the southeast, which for our industry, F &B, food and beverages, is where a lot of our competitors are based. Interesting. When, Lawrence, you talk about being listed on a stock market, was it last year that you listed on the London Stock Exchange? So you're obviously getting a very big glimpse at how financial services, banking services, legal services, all of that might be in London.

20:15How does that compare to what you have in Manchester? that and you essentially listen to emma talk about support i think when i look at my journey and i started the business back in 2009 um i i don't think there was too much support so it's good to hear that there's you know um there's upcoming help for and maybe newer businesses and actually we struggled to raise capital in the early days i think everybody talked about growth but what i learned was really they wanted profitability quite early on which is very very challenging for startup businesses when you say they institutions and and anywhere where you're looking to raise capital um and actually you know before i came on the program today i thought back to those days and was it beneficial that we were northern when i went to see northern funds and i always thought well we're based in the north you should be investing in us but really i think they look beyond always look beyond that and look at the business itself and whether it's got an opportunity because there's always a high risk profile for a startup so i think it's uh it's good to hear that you're receiving the sort of support that i think businesses in the northwest should receive from um local institutions to to back startups uh in this area and i know sean just talked about splitting his life between london and manchester uh all of the institutions that backed the beauty tech group on float um pretty much 99 were london-based does that change at all has it changed or are you still having to be in london and make that trip with finance yeah absolutely and i and i think um you know that's certainly enlisted life i don't think that's about to change um so again i think my life's probably uh not quite split between the two but plenty of time down there continuing to raise the profile of the beauty tech group in its early stage of listed life sean why might that be either talk about many of the positive aspects of manchester's growth but it it sort of feels like there isn't that large investment scene or as big as it needs to be for the likes of yourself and lawrence to be thinking right now don't need to get on the the train down south to have these conversations or to to get the money from those investors who are based there yeah i mean increasingly you can have those conversations over video but um there's there's there's still quite a big draw into london for these big institutions and they do want to meet they do want to meet the people at the top of the the you know the the corporate they're investing in face to face and they want to do that regularly so i mean fortunately the you know the the transport down there is pretty straightforward going back and forth.

23:04Would it make a difference if there was, I don't even know what this would look like, but when you go to London and you're then in this sort of infrastructure of financial support and investment, it's there. Yeah. What isn't here in Manchester? What is a bit different? Just think that the institutions that are deploying this capital into the city, into the stock exchange, they are in London. But I don't think that's a barrier for businesses based in Manchester accessing that capital at all. Yeah, and I think we're talking about listed life, which might be different to a route that another business may go down.

23:45So if you look at private equity, you look about raising money with high net worth, I think there is opportunities in Manchester for that. And I probably should have said in my early days, we ended up raising money with NVM, which is a northern-based VCT fund. Um, and when we listed, I remember lots of the Northwest based funds saying, Oh, I wish you, I wish I'd backed you now looking at it, of course, cause it's been hugely successful and they came in high risk at the, at the time and have done incredibly well being part of the journey. So we were backed eventually, uh, in the early days by a Northern fund.

24:19So the opportunities are there. I just think that they should be a little bit more aggressively looking at specifically backing Manchester-based businesses if they're a northern fund. Emma, hearing this, you know, for two companies that have listed, and we heard about your fundraising from the combined authority around Manchester, what are you thinking there about maybe the years ahead for your hip-hop drinks business? I think there's still a big gap when it comes to scaling. so as a brand we've gone from startup and we're definitely in that scaling up phase and there are very few challenger food and drinks brands in Manchester above that sort of six seven million revenue mark I mean very few as in I can't really name anyone right now other than us there's some excellent you know beer brands in the city that have done a cracking job but in terms of our space it's very few so I think that's definitely a gap where you know the Manchester could could look to up its game um I agree with Lawrence I think a lot of the money is in London still but I do agree with Sean it's not so much a barrier you've just got to go down there you know and there are some some fantastic VCs up north you know the likes of Mercia a growth partner are from up north as well but we definitely could do with more and really building out that infrastructure here it's not just having the funds I think it's having the know-how of how to access the funds so you know a lot of brands in the food and drink space they're in London so they not only have access to funds but they've got access to people who can work in their brands who know how to talk to funds, who might have worked for a venture capital fund or an investment bank.

26:22So I think that's an area where Manchester could really focus on and have some massive impact with brands like us who are a little bit out of that ecosystem. In terms of FMCG and food and drink, that is very London-centric right now. So most of our competitors are based in London and the South East. And why would that be? i think it's a historical thing you know i think that a to run i mean lawrence and know this to build a consumer brand you need a ton of money and so i think historically that's where people have been able to access it you know where we've had some great support and some great help so we are starting to overcome some of those barriers but that's very london-centric a lot of food and you know food and drink founders who've done very well who've scaled brands they live in London it's very very interconnected now as a brand we're really breaking down some of those barriers we've got investors who maybe were from Manchester originally who live in London are really excited about that and are helping us too I think what we're trying to do is really chip away at how capital and networks is clustered in London and that's where Manchester could do with some extra support you know.

27:40What would be the thing that could really make you think okay that's one sort of weight on my mind that has disappeared. What would actually help Manchester and many other towns and cities will be hearing what you're saying and thinking blimey that you're describing exactly the situation we're in for businesses in those areas. What could make a difference? There's a few things. I think it's encouraging. I think it's continuing to encourage talent to come up here, which, as we've all said, there's lots going on in that field. You know, people are drawn here. There's lots of students and young professionals here.

28:15I think if we can encourage, certainly in our industry, if you can get more seasoned, experienced people from FMCG or from consumer brands. When you say FMCG, by the way, what does that mean? Sorry, fast moving consumer goods. Things you buy in supermarkets. Of which hip hop is the one. But just getting those, you know, there are lots of people with experience of that in Manchester in the north. I'm not saying there aren't, there's some brilliant people, but we could do with more. And so I think that's somewhere where the work that the combined authority have done, you know, they've had that one billion, they've got a one billion investment fund, haven't they, before Christmas that was announced.

28:54so just really focusing on that continuing to you know make it a great place to live and to work and to be because then you'll start to get that talent drag out of London. I just want to get a bit of a sense of how Manchester has changed visually and energy wise. Sean from your perspective how would you describe to somebody that's not been to Manchester not worked to Manchester why this is making headlines, why people are talking about it so much compared to how maybe it once was? Well, we first moved into Manchester City Centre in the back end of 2018, so just over seven years ago, and we moved into Ancote, and I would say that area now is almost unrecognisable compared to what it was when we moved there seven years ago.

29:46So the pace of development, whether it's retail space, accommodation, flats, housing, general redevelopments, it's been staggering how much has gone up. What was it like when you arrived there then? Because 2018 doesn't seem that long ago. No, it doesn't. So our office is based just behind Manchester Piccadilly and quite a lot of that area was reserved to what would be the HS2 extension to the rail line. um so there wasn't really any development going on there i'd almost describe it as it was quite barren really as i remember being showing i remember being showing around it and i and it was that area was was pretty derrily yeah it was lost wasn't it completely lost it was um you know it was it was tired old didn't really have very good infrastructure messy um whereas if you go there now it's lively um modern safe it's it's a it's a very big turnaround and i'd say that whole that whole ancoats area northern quarter and then the corridor all the way up to when where man city play the the amount of money that's gone in there and the development is huge so this is east manchester city center we're talking about here and as go on lauren i was only going to say i was shown around it was an area and when you built it and it was almost like i was like the benchmark for an amazing from where on the beach had come from in Cheadle it was pretty groundbreaking really that that office space that was created there um it was almost this amazing office space being quite a sort of derelict area and they both you know they both become great parts of the city now haven't they and I always thought it was quite an inspiration for what I hoped that uh current body or beauty tech group now um could create um in the event we created it slightly outside and if you were oh sorry go on I was just going to say we're about 10 minutes walk our manufacturing facility under the arches under the railways about 10 minutes walk from on the beach and it's really interesting because right where you are yes I would say that and I can see the cranes and the building and all that stuff where we are there's still some work to be done so for people that know Manchester you sort of come out of the back of Manchester Piccadilly and there are various arches and and and that's still pretty derelict and actually I think is a massive opportunity to turn that into a into the sort of spaces you do see in London under the arches where you have food and drink and breweries and different facilities so that's still a little bit of a gap lots of potential.

32:21So what do you make so clearly Manchester's not done then in the in the centre of it and it there's there's lots of opportunities there but at the other end of town you probably see it from where you are and look up there's been And a quite phenomenal change in the skyline in recent years, hasn't there, Emma? I love driving into Manchester. I live in the south of the city and it takes me, you know, if I drive in, it's about 45 minutes to get in. And I just get so excited when I drive in because it feels like the skyline is changing almost every day. And you see the cranes. And you asked me earlier about the differences between Manchester and other northern cities, the likes of Leeds and Sheffield.

33:02and I just, when I go back home or if I go over to Sheffield, I just don't see, I don't see that scale. I don't see that building. You know, I don't feel that same excitement that I get when on a rainy, always rainy morning drive. Not always rainy. Almost always rainy. But yes, that may be one of the aspects of Manchester, but if you're high up in those skyscrapers, you'll have quite a view. And Lawrence, they are quite something, aren't they, when you compare to other cities around the United Kingdom. Do you find, has that changed an attitude from investors, people in providing services to you when they maybe come to Manchester and they see very tall, shiny new buildings?

33:51Does that make a difference? Look, I don't know what the attitude is of the London investors to Manchester. I don't think they look much past the quality of the business and the people in it, if I'm being brutally honest. But I do think that there's a knowledge that Manchester is the second city in the country. It's got some great people. It's got great businesses. It's robust. It's got, I think you talked about the personality that's in there. everybody always sees someone from or talks someone from the northwest and there's you know slightly different honesty and um uh humor that comes with people from this part of the country and i think that's probably the you know my main takeaway from talking to the investors there and also there's been a lot of successful business come out of the northwest that have that have listed like like on the beach so um they've got links to it and they they've met the founders and the CEOs from this part of the country.

34:48I mean, Sean, to hear Lawrence's description there, if you were somebody in Birmingham, not just the debate about the Second City and all of that, but the description around the energy, the people, the businesses are there, you would say, well, hang on a minute, you know, we've got all of that, but why isn't there this sort of sense, why isn't there this conversation around our city, the way there might be in Manchester? Do you know why that might be? Well, I'm sure there's some great things about Birmingham as well, but I think what Manchester's got as a real asset is some things that make it more famous than a normal city of its size and scale.

35:31So the heritage in terms of the music and the culture surpasses most places in the country. The sport in Manchester is truly global and internationally recognised. And I think the brand Manchester is just very big and very international. And I suppose on the back of that, that gives you the ability to build on it. And that's what Manchester's doing at the moment. I also like, you know, seeing the skyscrapers and the cranes and the buildings going up and seeing the investment in the city. But what's also great is you can walk into the northern quarter and you can see all of that history. So the architecture is still, you know, as it was and you can imagine what it was like going to watch live music in the 70s, 80s and 90s.