It has been a challenging and emotional last six months here at the Rodeo Joe’s HQ. Sales have continued to develop, particularly the Buffalo Wings, Southern Skins, and the Mozzarella Melts, which seem to be the customers’ favourites. But we have also had casualties with two (Onion rings and Pepperoni Bites) of the initial six lines de-listed.
New product development is well under way and we are finalising the second phase products, which will be ready for a June/July launch. This will see the introduction of a second tier of cheaper products (rsp: £1.29) and move the Rodeo Joe’s brand into a new area.
Production capacity issues have been resolved and we feel confident to present the range to further retailers within the UK and continental Europe.
We are confident we will hit this year’s projected targets on volume and value. However, overall profit and net return forecasts will take longer to realise. This is largely due to the fact that marketing and promotional spend within the frozen category far outstrips
anything we have encountered in the chilled sector.
A big emphasis is placed on pricing activity, using bogofs that have a huge impact on immediate volume, but little effect on post-promotional sales.
Above and below-the-line investment must increase to drive brand recognition and distribution.
However, it has become very clear over the last six months that we are an extremely small fish in a very large pond.
Major influence is exerted on the retailers by some larger key category players, which makes the life of a niche branded small and medium enterprise tough.
It is critical that companies of our size and nature possess that point of difference, the ability to truly innovate and the flexibility to react quickly to any situation.
‘Could do better’ is how I would describe our NPD experiences last year. We launched three new products of which only one now seems set for success. Even though my colleagues with more experience of this kind of thing tell me that a 30% success rate is good, it still seems scant reward for the effort and investment involved. That said, our one success is turning out to be a bigger and more long-term proposition than I had originally expected and we expect to be launching additions to our Spiced Tea range later this year.
Last year was a big one for Natco - we learned a lot in a short space of time. Our core business has always been the independent grocery trade, but last year we entered the multiples in a big way.
The biggest difference in NPD terms between the independents and multiples is the amount of planning and investment needed to launch products mainstream. Within the independent trade we could develop and launch products in our own time. With the multiples, we have to fit
development plans to the buyers’ category review calendars. Miss that and you might as well write product success off for 12 months.
The cost of mainstream marketing support was another surprise, so we are reviewing our approach: the products have to be worth long-term investment and be capable of long-term returns.
The advent of a Food Standards Agency warning against mini jelly products containing konjac caused the virtual demise of our Jelees product last year - even though ours were konjac free! Retailers returned the products in their thousands and we have been forced to curtail plans for this product entirely.
We have come out of the experience stronger and more able to face the challenge. We’re just keeping an eye out for that banana skin this year.
The towering event of the past three months was our triumph at the Paris Aqua Expo in February when, in competition against 81 entries from 21 countries, Willow Water was judged the Best Designer Water in the World.
Chairman Ian Needham and director Philip Lynott, who discovered the water bubbling from an underground spring on his land, could not believe it when the award was announced. It was only a year ago that they, with MD David Jones, launched Lakeland Willow and it is a fantastic achievement to have come so far, so quickly in such a competitive marketplace
Even the judges in their commentary noted: “It has been in great demand since summer 2003, having ensured its unique selling point - the salicin content - was clearly communicated to consumers despite the complexity of important messages to be conveyed to them about this unusual enhanced water.”
As a result we have a superb platform on which to build and roll out the next stage of our marketing and promotion plan.
Our sales performance has also been excellent during the past quarter in Great Britain, Ireland and Northern Ireland. In the Republic we engaged Unique Spring Water as our distributors, which is run by Ann and Cathall Banaghan whose enthusiasm has worked so well in conjunction with our PR and media operations.
By placing Willow Water primarily into independent retailers and local c-stores sited several miles apart, and heavily promoting it on local radio (along with local and national media), considerable demand has been generated. Some stores sold hundreds of 1.5-litre six-packs a day and customers travelled up to 100 miles to get their hands on it.
We have learned the value of establishing detailed marketing and promotion plans at the early stages of roll-out - and having a budget to support it.
The last four months have seen continued strong growth for Gü and we now have annualised brand sales of £5m, which gives us 1.2% of the desserts market. We are already the No 1 premium chocolate brand in the chiller.
My aim is now to become a £10m brand by 2005. Gü has fantastic brand loyalty among its consumer base and some customers drive 100 miles to buy us.
It’s crazy, but I think we have really hit on something and in some ways the scarcity helps - we are still in under 40% distribution.
One of my key goals is delivering for our customers who took a risk on us at the outset and fuelled our growth - I have an almost Sicilian loyalty to them.
The great thing is that Gü is really working hard for them with strong returns on space. The proof is that we continue to be rolled out to more and more stores.
But we have had difficulties - we over-estimated Christmas and under-estimated St Valentine’s Day. The whole administration side of the
business is incredibly complex but we are getting on top of it. Since last reporting we have launched in Boots and Thresher (where we are one of their bestselling food lines) and will soon start with one of the major airlines and a leading coffee chain. We have also been approached by customers in the US, France, Australia, Belgium and Holland.
The challenge now is prioritising our growth and resourcing up internally to meet it and I am about to embark on a recruitment drive.
But I am not getting complacent - the chilled foods business has had more than its fair share of casualties.
Luckily, my upbringing gave me a strange combination of optimism and curiosity balanced by a healthy dose of paranoia… which has so far short-circuited most of the potential pitfalls!
Rodeo Joe’s - Abergavenny Fine Foods>>Commercial director Bryson Craske
Spiced Tea, Jelees and Jelees Juice - Natco Foods>>Director Kishore Pagarani
Lakeland Willow Water - Willow Water>>Communications director Mervyn Edgecombe
Gü Chocolate Puds>>‘Chief Gü-meister’ James Averdieck