In the fickle world of drinks, Joe Woods has consistently created winners
Tim Palmer meets him
Opportunism, luck, an eye for the main chance and tenacious self belief have all helped make Joe Woods' fortune and put him at the forefront of an alcoholic drinks revolution. When the media whipped up an anti alcopops frenzy in the mid 1990s many dropped the sector, but Woods knew sweet, fizzy alcoholic drinks revealed a rich vein of interest among young drinkers looking for something new.
The trick was in creating products which would not offend the critics but would appeal to the under 25s the big but fickle spenders in the drinks business. Woods did just that. Beverage Brands, the company of which he is managing director and a major shareholder, will turn over £70m this year from a standing start in 1992.
But to get to this point, it has not all been plain sailing even for this keen yachtsman. Alcohol was not part of his thinking at the beginning of a diverse career and for three years he was barred from involvement in the alcohol industry by legal covenants. His entry into the business was almost accidental.
After a false start in catering and an aborted attempt to become a commercial pilot recruitment among the airlines dropped off at the wrong time he moved into retailing and made his way through the management hierarchy at John Menzies, becoming md of its wholesaling subsidiary TBD. This he turned round from a £1m loss to a £2m profit.
"They gave me a £2,500 bonus and I was not very impressed. Someone said to me: The only way to find out what your real value is, is to go out and do it yourself.' So I did."
He went to the Channel Islands to visit his parents where he came across a poster in a supermarket for Devonshire Cream Liqueur. Odd, he thought, given there was a surplus of cream on the islands.
Woods thought he had found the profitable niche he was looking for and set up Channel Island Cream Liqueurs. This produced branded cream liqueurs and Tipples the small pots of cream and alcohol to be added to coffee.His instincts were correct and this opened the door to the alcohol industry.
"The volume grew so big that we had to bring in cream from the UK, but the business gave me an education into the world of alcohol. I started creating other things and was calling on the supermarket buyers myself. Buyers asked if I could supply certain things so I got into own label products including bourbon, Canadian whisky, Scotch and tequila."
This, in turn, provided a good grounding in sourcing packaging and labelling. It gave him a real taste for the business and the realisation there were a lot of opportunities if they could be spotted quickly and reacted to.
This is fundamental to his success with Beverage Brands. "This market is so fast moving. If you spend too much time considering things someone will beat you to the punch. It was no coincidence that we brought out VR containing caffeine and taurine just as Halewood was introducing a similar product called Red Square. It was obvious from the success of Red Bull that stimulation ingredients in premium packaged spirits would work."
But the business had nearly turned sour at the very beginning when the dream of expansion of Channel Island Cream Liqueurs led to a tie up with William Grant.
"It was sold as a meeting of entrepreneurs and a combination of strengths, but they wanted more control. I thought I had joined with a company with huge resources, distribution and technical expertise, but I found it restricted rather than helped our development."
So he cut his losses and sold out. The real cost to him was the restricting covenants.
The measure of the man was that he was back in business a year later having spotted another niche. He saw the success in the US of flavoured waters such as Clearly Canadian and thought he could do something similar in the UK. The result was the creation of Beverage Brands in 1992 to make and sell Caledonian Clear.
It won immediate listings with all the major multiples and SHS handled its distribution in Northern Ireland. The success was such that SHS took on UK distribution in 1994 and acquired a shareholding in Beverage Brands. "This was my first serious piece of brand building. I knew Caledonian Clear had to be well supported."
Then two things conspired to test Woods' true talents as an innovator. Alcopops exploded on to the scene and the covenants expired. His confidence is such that his first venture into this market carries his name, though drinkers of Woody's are probably not aware of the link.
"There was no point in joining the alcoholic lemonade bunfight. Hooch and Two Dogs were slugging it out and not coping with the demand. I deliberately steered clear of lemon and came up with Pink Grapefruit, Strawberry and Lemon, and Mexican Lime.
"The market was exploding. Soft drinks manufacturers were trying to get an alcohol culture. They were getting cheap flavours, sticking alcohol in them and creating garish packaging.
"Woody's packaging changed three times in a year. In 1996 and 1997 we wrote off £1.5m worth of packaging. We wanted to distance ourselves from the less legitimate products which were giving the sector a bad name."
Between 1993 and 1996 turnover went up from £4m to £22m.
In the last five years the market has matured, helped by a tougher code of practice, and the media feeding frenzy has died down. Woods said the latest figures put Beverage Brands as the number two in the market behind Bacardi-Martini. Both companies have successfully steered their way through the alcopops minefield to emerge as the key players, with UDV in premium packaged spirits.
Despite the fast moving nature of the business Woods is determined to be in it for the long term. When the sector was being threatened with legislation, he became involved with efforts to establish a code of practice which had enough teeth to be effective.
Prohibitive government action could have destroyed the sector overnight the last thing he wanted.
"This is fantastic fun. I have a great time with the people working with me and they work with me, not for me."
Woods isn't just the md at Beverage Brands. He is the driving force behind all the new product development. They have to keep his enthusiasms in check to prevent some of the more unrealistic drinks going to market, but he goes down fighting.
"We are running about 20 potential products at any given time and I have to convince the marketing team that any of them will work and they often come back and tell me to forget it. It is difficult to find a gap in their schedule for another product, anyway.
"I have a great team working with me and I get a lot of support from SHS, but it is not all sweetness and light. We are an entrepreneurial company and there is a great buzz about the business. We profit share and they live and breath the company and its products."
Most of the people who join Woods at his English Riviera base in Torquay stay on and develop with the company and although he would be a millionaire several times over if he decided to get out, he finds it difficult to contemplate the thought of quitting.
"The people who work here are a very important part of this. They deserve a lot of credit. I owe a debt to them which would make it very hard for me to sell out.
"I want to see Beverage Brands around in 10 years' time and still number two or even number one. I'll only ever give up if someone else can do the job better than me.
"I still wake up and think where do we go from here? But it would worry me if that did not happen, because then I would be becoming complacent. There are brains in Bacardi and UDV trying to do the same things as me. Every day is still a challenge."
Not content with taking on two of the world's largest drinks companies in the UK, Woods' next move is on to the global market. He plans to rack up the business's export operation. It represents 10% of the business now, he wants it to be 50% in two years. Some of the brands are already in Canada, Hong Kong, Japan and the Irish Republic and three will be launched in the US in November. He takes responsibility for export development which dovetails nicely with his passion outside the business.
Woods is a yachting enthusiast, but interested only in the wet and fast kind not the gin palaces moored outside the office. Woods takes this seriously and competes on a world circuit taking in France, Italy and the US.
So he combines business with pleasure, keeping an eye on the latest drinks trends around the world. And it won't take him long to adapt them for the UK providing he can get the ideas past his own marketing team!
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