In the grocery business, passion does not equal profit. And few companies know that better than Cook.
The premium frozen ready meal specialist has passion in abundance, not to mention 25 shops in the south-east and branded freezers gracing 120 independent stores across the country. Yet it was only last year, after 11 years in business, that it finally turned in a profit.
Cook was founded on the principle that frozen food doesn't have to be cheap and unappealing. Led by co-founders Edward Perry and former chef Dale Penfold, its basic agenda was to instil a home-cooking ethos to ready meals, something that Perry admits has been "bloody difficult" from the outset.
"If you've been running a business for 10 years that hasn't made a profit, then I think it's fair to say you've made more mistakes than most," he says. "But it's how you learn from them that's important. At first we thought we could just take Dale's culinary expertise, focus it on a range of meals and freeze them. If it was that easy, then everyone would be doing it. The reality is, no-one is.
" Which might finally be to Cook's advantage. After years struggling tomake the business work, Cook finally managed to turn a £404,000 pre-tax loss in 2006 into a pre-tax profit of £32,000 in 2007 on sales up 24% to £11.1m.
For the year ending March 2008 the company expects to fall back to break-even, largely because its move to a new production facility in Sittingbourne, Kent, has made a £2.5m dent in the books. The flip side is that it has allowed the business to dramatically increase production, and that, says Perry, has laid the foundations for strong growth.
The Sittingbourne operation, which has 33,000 sq ft of kitchens, can produce 500,000 products a week - a five-fold increase on the capacity of the original site.
The pair believe they will be able to almost double the business's turnover to £20m within three years. They have already opened two new stores this year and plan to open a further six by December.
Getting to where they are now has not been without its challenges, however. One of the biggest obstacles has been consumer preconceptions about frozen food: few associate premium values with the category. There has also been competition from supermarket chilled ready meal ranges, one of which even bears the same name. "I suppose it's our fault for choosing such a generic name," says Perry wryly of M&S's Cook range.
Experiments with different shop formats, new routes to market and summer recipes haven't always gone to plan, he admits. "At times we should have stuck to the nitty-gritty instead of getting carried away with new ideas," he says. "What seemed like a good idea down the pub should have stayed just that."
In other areas, the fact Perry and Penfold have been very much masters of their own destiny has benefited the business, however. They closely control Cook's presence in the independents and symbol stores, for instance, with the products sold only in Cook-branded freezers.
"It's about ensuring we're never in a position where our meals are squeezed in between frozen peas and the ice cream," explains Perry.
He is confident Cook can generate "sensible profit" in the coming years, but say they won't compromise for a quick buck. "Had we cut corners three or four years ago and supplied more of those who asked us to, then we could have become profitable more quickly," he says. "But we're in this for the long term. We love the fact we are independent and can chart our own future.
" Though Cook has lost some customers to the credit crunch, it has picked some up as people switch from eating out to eating in. It should also be less hostage to the volatile British weather this summer. Some meals have been re-packaged as 'Great for Summer', and the company has launched a new range of summer party foods.
"Last year I was probably the only person who'd smile when the five-day forecast showed grey clouds," says Perry.
This year, the outlook looks much sunnier for Cook - even if the weather doesn't. With the first year of profit in the bag, Perry is no doubt glad that one idea they had down the pub didn't stay just that.n
The premium frozen ready meal specialist has passion in abundance, not to mention 25 shops in the south-east and branded freezers gracing 120 independent stores across the country. Yet it was only last year, after 11 years in business, that it finally turned in a profit.
Cook was founded on the principle that frozen food doesn't have to be cheap and unappealing. Led by co-founders Edward Perry and former chef Dale Penfold, its basic agenda was to instil a home-cooking ethos to ready meals, something that Perry admits has been "bloody difficult" from the outset.
"If you've been running a business for 10 years that hasn't made a profit, then I think it's fair to say you've made more mistakes than most," he says. "But it's how you learn from them that's important. At first we thought we could just take Dale's culinary expertise, focus it on a range of meals and freeze them. If it was that easy, then everyone would be doing it. The reality is, no-one is.
" Which might finally be to Cook's advantage. After years struggling tomake the business work, Cook finally managed to turn a £404,000 pre-tax loss in 2006 into a pre-tax profit of £32,000 in 2007 on sales up 24% to £11.1m.
For the year ending March 2008 the company expects to fall back to break-even, largely because its move to a new production facility in Sittingbourne, Kent, has made a £2.5m dent in the books. The flip side is that it has allowed the business to dramatically increase production, and that, says Perry, has laid the foundations for strong growth.
The Sittingbourne operation, which has 33,000 sq ft of kitchens, can produce 500,000 products a week - a five-fold increase on the capacity of the original site.
The pair believe they will be able to almost double the business's turnover to £20m within three years. They have already opened two new stores this year and plan to open a further six by December.
Getting to where they are now has not been without its challenges, however. One of the biggest obstacles has been consumer preconceptions about frozen food: few associate premium values with the category. There has also been competition from supermarket chilled ready meal ranges, one of which even bears the same name. "I suppose it's our fault for choosing such a generic name," says Perry wryly of M&S's Cook range.
Experiments with different shop formats, new routes to market and summer recipes haven't always gone to plan, he admits. "At times we should have stuck to the nitty-gritty instead of getting carried away with new ideas," he says. "What seemed like a good idea down the pub should have stayed just that."
In other areas, the fact Perry and Penfold have been very much masters of their own destiny has benefited the business, however. They closely control Cook's presence in the independents and symbol stores, for instance, with the products sold only in Cook-branded freezers.
"It's about ensuring we're never in a position where our meals are squeezed in between frozen peas and the ice cream," explains Perry.
He is confident Cook can generate "sensible profit" in the coming years, but say they won't compromise for a quick buck. "Had we cut corners three or four years ago and supplied more of those who asked us to, then we could have become profitable more quickly," he says. "But we're in this for the long term. We love the fact we are independent and can chart our own future.
" Though Cook has lost some customers to the credit crunch, it has picked some up as people switch from eating out to eating in. It should also be less hostage to the volatile British weather this summer. Some meals have been re-packaged as 'Great for Summer', and the company has launched a new range of summer party foods.
"Last year I was probably the only person who'd smile when the five-day forecast showed grey clouds," says Perry.
This year, the outlook looks much sunnier for Cook - even if the weather doesn't. With the first year of profit in the bag, Perry is no doubt glad that one idea they had down the pub didn't stay just that.n
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