Best career move: Having the confidence to leave a well-paid job in TV to start up Ella’s Kitchen
Worst career move: My first job was moving shelves. They laid me off after half an hour and gave me 75p. It cost me more to get there. Overall I have made the right moves at the right time. I was never cut out to be a partner at a chartered accountant but I have used those skills massively in setting up my own business
Best advice received: Sir Ken Morrison said ’You see them? (pointing to my feet). Keep them on the ground. Also, start by asking why? That’s the most insightful question, to ask why, not how or what
Worst advice: People won’t buy it, you can’t do it
Favourite TV show? Life on Mars. It was totally unique, and not many things are different
Least favourite TV show: Anything featuring people that think they know what they are talking about when they don’t. People that preach
Death row meal: A bottle of Brunello di Montalcino, olives and biltong. And some fruit
Favourite Paddy’s Bathroom Product: Squirty Stuff. Clean ingredients, new packaging, a total load of fun
Who among us hasn’t dreamt of inventing something that sells for millions of pounds, leaving us free to embark on an odyssey of yachts, chilled Champagne and caviar?
Paul Lindley did the first bit. In May 2013, seven years after launching revolutionary babyfood brand Ella’s Kitchen, he sold up to the acquisitive US food group Hain Celestial for $103m - more than enough to set sail and take it easy, forever. But that’s not the plan.
After a year spent integrating Ella’s into Hain Celestial’s global babyfood operations, Lindley has gone back to his kids for inspiration and is days away from launching Paddy’s Bathroom, a premium-priced range of toddler-friendly bathtime products, into 500 Target supermarkets in the US, and 300 Tesco stores in the UK. Meanwhile, he’s still CEO of Ella’s Kitchen, which remains in double-digit growth, as it always has been. Plus he sits on the Santander SME advisory board, is an ambassador for the Family & Childcare Trust, and a counsellor at One Young World.
That’s not been enough to keep him occupied, though. So he’s also executively produced an album by South Sudanese rapper Emmanuel Jal, featuring guitar licks from Nile Rodgers and guest vocals from Nelly Furtado. It’s for a music-based project called the Key is E, founded by Lindley and Jal, that invests in African entrepreneurs whose businesses socially benefit children. And it’s the latter project that offers the biggest clue as to how Lindley sees his future panning out.
Drop by Drop
“I’m excited to prove that business can do social good and make profits,” he says, before grabbing a pouch of Paddy’s Bathroom shampoo. “So, core to the Paddy’s brand is a campaign called Drop by Drop. For every drop of water a consumer uses, we create a drop of water in Rwanda. It’s on the front of the packaging (he points out the logo in the top right corner) and we are using technology to link it all together.”
To demonstrate his point, Lindley swaps the shampoo for an iPad, pulls up the Paddy’s app, taps in a unique code on the back of the pouch of shampoo, and the app shows exactly which Rwandan village will receive clean water.
Paddy’s will pay for the filters that provide clean water by sending 50 cents or 32p from every pack. It is, unquestionably, a good thing for Paddy’s to be doing. Yet it’s easy to be cynical when a new business rides in waving a charitable flag. So what would he say to anyone suggesting his clean water initiative is just another example of a brand latching on to a worthwhile cause to shift more stock and make more money?
“I would say they are wrong,” he says. “This isn’t a marketing thing. This is why the brand was created. It really is at the heart of everything. And even if they were right, which they aren’t, it’s still improving the world - the fact you can use business to drive social change, and that social change will happen if you drive sales. We can use business to stop 15,000 deaths a day that can be prevented by providing access to clean water. I’ve sold Ella’s, I could play golf all day if I wanted to, but with the experience, contacts, creative ideas and passion for social change that I’ve got, I’ve got a responsibility. And if it is successful then it will be a beacon for other companies and entrepreneurs to see they can make social change a core part of a brand from the beginning.”
An early test of whether altruism and business can walk hand in hand must have come when Hain Celestial, which paid handsomely for the Ella’s brand but officially has nothing to do with Paddy’s, was first introduced to what looks and feels every bit an Ella’s brand extension. Was it a delicate negotiation?
“Paddy’s has been at the back of my mind since Ella’s was two years into the marketplace,” says Lindley. “I began to think about other areas we could move into. So seven years ago we did the research and developed the heart of the brand. And I spoke with Hain about Paddy’s way back. I’m into collaboration and openness and Hain has always known what was going on with Paddy’s. They were always totally supportive.”
Financially, it’s “solely” down to Lindley, however. It’s cost him “close to a million” to get it to market. “And it’s not a slam dunk. It might fail, but that’s part of the journey. My gut feel and the research we have carried out shows there is a market for it.”
That market is toddlers, because “baby is dominated by Johnson & Johnson, and L’Oréal is dominating kids.” As well as trademark playful packaging and natural aromas like pineapple (which others aren’t using, he says), the Paddy’s range has a predictable “clean deck” when it comes to formulation, though it can’t be 100% organic, because otherwise it “wouldn’t clean and you wouldn’t get the bubbles”. It’s a proposition retailers have been keen to discuss.
“Coming in as a premium product offers choice for consumers, And because the category is driven by deals, which has knocked value out of it, Paddy’s represents an opportunity for retailers to get away from promotions and grow the category.
“I think we can get to £10m sales in four years. And I’m structuring it to be operationally profitable after a year”
That means achieving “maximum distribution” as fast as possible. “I’m thinking big from the beginning. This isn’t starting in corner shops and farmers’ markets, it’s going into major retailers with a serious marketing plan behind it. Other UK retailers will come on board within weeks and the brand will get going.”
“Ella’s was two products in one retailer but Paddy’s will be seven products, in multiple markets, in multiple retailers inside year one. I think we can get to £10m sales in four years and I’m structuring it to be operationally profitable after a year.”
Is it conceivable that Hain might look to acquire Paddy’s in the same way it snapped up Ella’s? “Hmm, well,” he says, leaning back. “I can see that would be an idea, wouldn’t it?
“Having grown Ella’s, I know the point at which you get added value if you choose the right partner and you lose value if you choose not to. So I do see a way of growing Paddy’s would be to sell it to somebody. And we can see what the future holds.”
It looks like a busy and exciting future awaits. And Lindley wouldn’t have it any other way. “In the last year I’ve been to 10 Downing Street, the UN, Buckingham Palace, the global child forum, all these things as a businessman,” he says. “That was beyond my wildest dreams. And now I can be global CEO of Ella’s and dedicate some of my time to do other things, like Paddy’s, and the Key is E. That’s my life, managing those three streams. And it works.”
words of entrepreneurial wisdom
Come from leftfield: “I’m a chartered accountant by training, a marketeer by experience, and an entrepreneur in terms of thinking differently. So I think, how can this brand land in the market? Why will the consumer want it? Why will the retailer want it? How can we market it differently? And how can we introduce a social aspect?”
Build a brilliant team and trust them: “An entrepreneur can have an idea but it’s the team, and their willingness to work weekends and move mountains, that will make it successful. And when you step back, you don’t want to be a back seat driver. The test is, have you recruited and incentivised your team properly? Have you motivated them? Are they passionate about it in the same way you are?”
Get social: “With social media you can reach people so much cheaper and business has been democratised. Thanks to social media the opportunity for entrepreneurs and SMEs to get a foothold in fmcg is there when it wasn’t before.”
Know your worth: “When you are trying to create a relationship with a retailer, don’t do the deal at all costs. You’re never going to get a better deal than your first deal. The jam won’t come tomorrow.”
Keep the numbers realistic: “Make sure you have a gross margin that works for you from the very beginning. A lot of start-up businesses fail because they work on a margin that relies on growth to deliver economies of scale. And my view is, get your margin right to start with, because that scale might not come.”
Embrace technology: “Paddy’s is very virtual. Our HQ is people’s houses. Technology allows you do that, keep overheads down and put all the money into product development.”
Toughen up: “It is tough. You are going to try and do something that no one has done before. And people will tell you that you can’t do it. But people have done it, and they have successfully exported to other markets. Yes, it is hard but that is what makes it attractive to many people. And Britain is exceptional in supporting innovation, while British consumers are exceptionally willing to try new things.”