I recently attended the Food and Drink Expo at the NEC in Birmingham. It was a great chance to meet up with clients old and new, as well as look into some of the trends, new ideas, and inspirations that lie ahead in 2016 and beyond.
Key trends were highlighted with a strong emergence of ‘protein’ products, along with the continued NPD in snacking; the development of popcorn products, for example. There was also an abundance of new companies on show, all with the ambition of growing and developing their business. All wanting to take advantage of the networking capabilities the show offers, whether, it's the chance to meet prospects from the multiples, or establish relationships the vast number of independents who attend.
Industry events provide an opportunity to sit and listen to seminars and Q&A’s that are held, these help me further develop my market insights and knowledge.
A seminar that particularly caught my attention was ‘Building (and Selling) a Food Business. The industry experts included people who have helped food businesses grow, develop and eventually sell their business. People of note were:
Paul Herman, CEO of BlueBox Corporate Finance
Stuart Wilson, Group Partner of Shirlaws Group
Liz Claydon, UK Head of Consumer markets and Partner, KPMG
From a detailed and interesting 45 minutes discussion, here are some of the key insights and advice that I took from the panel of experts:
Have a Strong Business Plan
All the panel discussed the importance of having a strong business plan in place. This included having a business model rather than just a product plan. You also need to ensure that you map out your journey and are able to strongly differentiate your product in the market. Make sure you have a strong financial model in place, ensuring your cost of sales, labour and overheads are closely monitored at all times.
Growth and Opportunity
The panel discussed the need to identify areas of opportunity in order to grow your business. These included new territories, NPD, new routes to market and possibly selling directly to the consumer. The Graze business model of selling snacks direct to the consumer on a subscription basis was one example that they highlighted. They also said, keep it simple, look into co-manufacturing rather than setting it up yourself.
They all also talked about the need to confirm your IP is protected, across all territories. One example given by the panel was a business in the process of selling who found out that they didn’t have IP protection on a product that contributed to 35% of their gross margin, 4 days before they were due to sell!
Funding was an area that caused much debate, in particular around the different types available and what's best for your business. The usual methods were discussed - family and friends, bank loans, VC etc. However, the one that got the most coverage was crowd funding. All agreed that it was the best way to quickly generate some cash investment into a business. Two examples that were given were Crowd Cube and Seedrs.
However, they all stated that they do not see this being a long-term solution and identified that it is it not as well regulated as other methods. There have also been a few exits to date from crowd funding and they all agreed that it is a method that is likely to disappear soon, so take advantage if you wish!
Identify your strengths and weaknesses
The panel discussed the strength of entrepreneurs and private business owners when it came to ideas, drive, energy and determination. However, they also mentioned the strong emotional attachment that they tend to have, which can often be a barrier. Growing your business from £12m to £24m is the hardest part. You need to ensure that you have a robust infrastructure in place as well as a talented team around you.
As an entrepreneur or business owner, what are you capability gaps? What are your blind spots? Do you have a mentor to help you guide you on your journey? They all discussed the need to surround yourself with a team who can help you strengthen your weaknesses. An example was given of the Naked food business bringing in a Commercial Director from Coca-Cola who had the capabilities to open doors with the multiples and the experience of developing a brand. Without this expertise, the exit plan would not have been achieved.
Selling your Business
So, you have done all the hard work, it is now time to sell your business. The panel discussed how your exit plan should already be in place, to ensure you are working towards that goal. Selling your business will also be an emotional journey, especially for an entrepreneur who has lived and breathed the business for so many years. Selling your business will be a long process, even after finding a buyer (6 to 12 months). You, therefore, need to ensure that you can push the button quickly, guaranteeing all documentation and reporting is in place and that your brand story is strong. Only then will you be able to sell your business and enjoy your new private island!
Collingwood Executive Search have helped a number of FMCG and food businesses over the years to identify, retain and develop the talent needed to help them grow and develop their business into the vision they set out to achieve. Through our targeted headhunting, team assessments, executive coaching, and leadership development programs we have ensured our clients can achieve their ambitions, across both the UK and Internationally.
For more information, please visit www.collingwoodsearch.co.uk or contact us on +44 1829 732374.