Challenger brands and innovation often go hand in hand. But how easy is it to break into a mainstream category like yoghurt in the UK when it is dominated by major organisations like Muller and Danone with brands like Muller Corner and Activia?
I have been fascinated by a newcomer called The Collective for a while, not just for its utter deliciousness, but also because it looks so different from everything else on the shelves. And I don’t mean artisan ‘hand knitted’ yoghurt that is only available in a few independent delis, we are talking Waitrose and premium branches of Sainsbury’s here.
I could sense an Innocent-like approach to the brand, not just in its packaging design, web site and tone of voice, but also in its location. Innocent’s invitation to pop into Fruit Towers in west London was always intriguing, as is the location of The Collective brand owner, Epicurean Dairies in Acton – an area not known for its lush pasture!
Buoyed with the confidence of curiosity, I gave them a call and co-founder Mike Hodgson agreed to tell me their story. The web site gives a strong clue as to the origins of The Collective in New Zealand. It turns out that Mike was on the lookout for a brand he could get excited about to launch in the UK, using his considerable experience of working in the yoghurt and fresh desserts category. ‘I hadn’t done a start-up, and it was something I needed to do for myself.’ Unsurprisingly perhaps given the trajectory of The Collective in the UK, it turns out that Mike knows his way around supermarkets and brands. In his career he has worked both for corporates, (like The Greencore Group and St.Ivel) and entrepreneurs (he was a consultant to James Averdieck the founder of fresh desserts company, GÜ).
At Greencore, Mike was MD of the ready meals business, but after his years as a corporate man, he jacked it all in, took his family on a round the world trip and bought a pub in the Lake District. It was during that world trip that he says he ‘fell in love with NZ and admired their ‘go for it’ spirit. Returning to run his gastro pub, he showcased wines from New Zealand, which began his successful connection with the country.
Whilst running the pub, he struck up his relationship with GÜ, initially as a part-time consultant, but after it was successfully sold to Noble Foods in 2010, he took on the role of MD full time for a year. He credits these experiences as the catalyst for The Collective in the UK.
“Running the pub enabled me to really connect with the public again, seeing my customers’ reactions to the specials board every day, talking to them first hand to get immediate feedback on what they liked. The engagement really fuelled my passion for great food and gave me the impetus to do something on a bigger scale.
“The GÜ experience convinced me I could do something similar, but this time for myself. I was actively looking for a business idea UK at the same time as The Collective were thinking about expanding overseas. I only had to taste the product to know we’d found something really special. The challenge was to replicate the unique bio culture that produces the yoghurt’s extraordinary consistency in NZ here in the UK with British milk. We also wanted to tweak some of the flavours to British tastes.”
We discussed the lemon (my favourite) as a case in point. “I’m a Northener and to me the obvious way to go was towards lemon curd. Similarly we gave Russian fudge flavour a taste of Devon toffee.”
Mike enrolled his business partner, Amelia in the venture. They had worked together at GÜ. He credits Amelia and her relationships with, and knowledge of the supermarkets, as being a major factor in their success to date, that and their manufacturing partner in the venture.
“When you are launching a new product, you can go one of two routes – capital intensive (and therefore inherently risky) where you set up your own manufacturing operation or outsource to a specialist manufacturer. We chose the second option so that we could focus all of our efforts on sales and marketing. But even beyond that, we actually convinced a manufacturer to become the third partner. Giving them skin in the game has created stability as well as instant credibility for the integrity and reliability of our supply chain with the supermarkets.”
When I asked Mike what really motivates him about a start-up, he laughs and says that he now appreciates what people mean when they say you have to be a bit mad to be an entrepreneur. He cites the values and the attitude of the business as the way in which they really want to make their mark. “We just want to be easy to do business with, and be really helpful, that’s why I’m happy to talk to you. We don’t court publicity, but if people are interested in what we are doing, that’s great. My wife does all of the customer service and feedback – it’s a hangover from the days of running the gastro-pub, because we really believe in listening to people and taking what they say on board. If we have a loyal customer base who feel valued, we know that they will help get the word out about how good the product is.”
One of the most compelling things for me in hearing this challenger brand story is that Mike is not a groovy young MBA grad with a disruptive idea. He has worked his way around and through the industry and even taken a step back from corporate life before deciding to start-up his own thing. He says of the challenge, “ I think I have a slightly masochistic need to do something that’s hard and that other people think is (to quote some) ‘very brave’ or ‘bloody stupid’ Clearly managing to achieve hard things gives you a strong purpose and achieving that is very satisfying.”
He is proof that a variety of experiences and perspectives can add up to being able to see things in a new light. He is a ‘portfolio man’ who has taken inspiration to launch a company at the point when in a different generation, many people would have hunkered down and waited for retirement. For me, the standout elements of the story are the factors that have set the scene for rapid growth: Sector experience of sales and marketing, distribution and supermarket relationships; manufacturing and supply chain stability and integrity; a tried and tested product with a distinct brand personality that just needed to be localised and a business partnership with Amelia that had been forged in another successful company. And of course, the entrepreneur’s special sauce; relentless desire and self-belief.
The results speak for themselves, turnover is already exceeding £10m and they are on target to be profitable this year. It all adds up to an irresistible recipe for success.