I knew the co-founder of Pulsin when the brand was in its market-stall days and am proud to say I’m fairly confident to have tasted every bar to bear the Pulsin name (even some of the secret ones I’m not supposed to talk about) I remember the proud moment I saw the bars in Tesco, and Sainsbury’s, and well, they’re everywhere now. I feel invested in their journey and how far they’ve come, so I thought, who better to ask about what it really takes to make it as a food startup than the Pulsin gang.
Co-founder Nick agreed to answer my questions because he’s not just an entrepreneur extraordinaire, but also one of the most decent, humble chaps I know.
So without further ado, let’s get to the good bit.
Hey Nick, thanks for getting in the hot seat – here are your 13 questions!
You started up the business with friends you already knew (I think!) do you have any tips for a startup looking for a business partner?
I met Simon and Ben back at University in 1997. We had shared a student house together. We have always trusted each other inherently and this has been fundamental in our ability to run an effective business together. So my recommendation would be to work with partners you can trust.
Of course, money is always a big problem when starting up, did you get help from government grants? Or do you know of any funding available for foodies looking to start their food business dream?
When we started, we got help from the government loan guarantee scheme (EFG)
We put up £24k between us in 2007 and Barclays Bank match funded our business plan with another £24k. That gave us enough money to buy some basic machinery and get a small lock up unit in East London to start making the products. Angel investors also exist who support brands with funding and take shares in your business from the start but I think giving away too many shares at the beginning is a mistake. In addition, you can get funding from a few crowdfunding sites now. Before the funding stage, however, we had tested some mockups at a few festivals and our friend’s lunchtime eatery in London. We even sold hand made stock into a few health food stores to get rate of sale information and therefore test the feasibility of the product. My advice is to test your idea out first before looking to get funding. For example, create product at home and get a market stall to get real feedback from consumers or sell hand made product into a few health food stores.
Let’s talk actual realistic figures, how much do you actually need to start a food brand? Of course this depends on your manufacturing costs, but what’s the initial hit to even get a product ready to sell on market stalls?
We did it on a shoestring initially, buying enough ingredients to make a few hundred products with hand made packaging. This cost us a few hundred pounds. This is the important testing phase to gather feedback, and use your empirical data to guide your recipe development, packaging design, pricing and how you stack up compared to the competition. If you can get the products into a few health food stores, then you will get real sales data which will help you form your business plan. Depending on your route to market, product type, and whether you make your own product in house or outsource manufacturing, the costs of launching can vary significantly. Most manufacturers will have minimum orders and these are likely to run into the thousands. It’s difficult to make a general assessment across categories but within bar making, somewhere between £5k-£15k would be a normal minimum order value per product SKU.
How important was your branding and packaging to your product when you started? Would you recommend startups go with a simple brand/ packaging design and then rebrand as you did? Or start with really clear brand identity?
We started by hand rolling energy balls and placing them into individually wrapped cellophane bags. Then we stuck a label on the bags. The label was printed from our printer and the designs were initially created by us on Adobe InDesign. Over the years, as we’ve grown, we have reinvested profits back into the business and it took us several years to afford our first professional graphic designer. We were lucky in the sense that the category for bars was in its infancy when we launched so time was on our side. However, brand cycles are shorter today across most categories so I wouldn’t wait several years to get your first graphic designer. If your budget is tight, it’s still better to test the market out on a small scale, discover who your customers are and build a branding strategy around these findings. This will inform your packaging design. Build the product, Test it out on your customers, Learn from the data collected and then either go with it or pivot in a new direction!
Do you need to have your brand in place before pitching to supermarkets? Or can you just pitch as soon as you have a tasty product to tempt them with?
It took us several years before we approached the supermarkets. We always had a plan to build our “customer pyramid” where the bottom layer equates to hundreds of independent health food stores and other premium outlets, the middle layer relates to wholesalers and premium London chains such as Wholefoods Market, Planet Organic and As Nature Intended. The top layer of the pyramid are the supermarkets. In this way, you build a brand and a following before you approach the supermarkets. This is important for several reasons. Firstly, you are in a better position financially and from a human resource, level to support marketing your brand in a supermarket. Secondly, because you have a following, supermarket buyers will naturally be more inclined to take on your products and negotiations are less difficult. Thirdly, you are less likely to lose a supermarket listing if you’ve already got a customer following in the independents and small chains and more likely to achieve the rate of sale (ROS) that buyers are looking for on shelf. You get one shot to make it work with supermarkets and therefore the time has to be right for you and your business otherwise it is likely not to work. Remember, getting into a supermarket is easy compared to managing a supermarket account and making a success of it.
OK you have a product, now you’ve got to produce it on a mass scale.
What advice would you give startups looking to find a manufacturer that will work with small businesses?
Have a good business plan that you know well. Who are your potential customers? What will be the RRP? What is the cost to wholesalers? What is your trade price? Is the product Vatable? Who are your competitors? What are the USP’s of your product compared to others in the category? What is your vision and can you sell it to a prospective manufacturer. It’s worth gaining data from market stalls, festivals and a few health food stores first before approaching a manufacturer.
Would you sign your contract with a manufacturer before pitching to supermarkets?
If you’re not making your own product and have chosen to work with a manufacturer, do not pitch to a supermarket unless you have got the means to supply them. If you pitch successfully but then cannot supply for any reason, you are likely to upset the supermarket buyer. It’s possible that you make an agreement to work with a manufacturer based on a supermarket’s decision to take on your products. However, citing my earlier answer, it’s best to build the customer pyramid first before approaching supermarkets. By that time, manufacturing MOQ’s will be easy to achieve anyway!
You have your product and packaging – How do you start getting it into supermarkets? What’s the best way to connect with a buyer?
You can contact buyers in a number of ways. An email introduction is good with a short 1-3 page presentation that leaves the buyer left intrigued. A follow-up email and/or phone call is useful to better understand when the review dates are for the category and to arrange a meeting. Be persistent as you probably won’t get a reply first time around. Taking a stand at various trade shows is useful for meeting buyers too once you are set up as a proper business. If a buyer uses social media you can connect this way e.g. Linkedin but I’ve had little success in this way. Sometimes sending a presentation in a beautifully designed box with samples and handwritten note can make an imprint on their memory.
What advice would you give to yourself as a startup when you first started pitching to supermarkets?
Do your research on the category first. If you cannot buy data, it’s important to get access to some sort of evidence to show what is happening with the target demographic, people’s buying habits, and the category you are focusing on including competitor data and NPD. Various data analysis organisations exist to provide this info and they can be obtained in the British Library. Mintel, Kantar, Euromonitor, YouGov are a few. The Grocer magazine is a useful publication to read too. Buyers need to convince their bosses that the brand they are listing has a good category argument backed up by evidence to show it will help them grow basket size in £. It’s about providing the buyer with an argument to show your brand will provide incremental value to the fixture and not just move the same customers from one brand to another.
How long did it take you to get in front of a buyer?
My first experience in front of a multiples buyer was at H&B around 4 years after we launched (2011). Then it was a Tesco buyer in 2015 so we did this quite slowly. However, supermarkets particularly Sainsbury’s, are more interested in small brands now than they were in 2007. They need to provide a point of difference to their competitors so agreeing “exclusivity deals” with smaller suppliers is something we are seeing now in the grocer’s marketplace.
What advice would you give startups who are about to visit a buyer at say Whole Foods or Planet Organic for the first time? (like, should they prepare trade presenters?)
It’s important to really understand who your competitors are in depth. If you have had your products sold in independent health food stores, establish what your average rate of sale is per SKU per week per store. Do your research on the route to market (RTM)-what wholesalers have you spoken to that can supply WFM or PO? Marigold, Tree of Life, CLF and The Health Store are a few that do. Understand your UK trade price list i.e. what your RRP, price to trade (less VAT), and wholesaler price point are. What are your key USP’s? Buyers at these outlets are genuinely into health food and will be keen to learn more about your brand so relax and be yourself! A trade presentation can be useful but not essential. It’s more important to have a great quality premium product that has a real point of difference and a discussion on how you will support the brand growth through promos and tastings. Not being sold in the supermarkets is seen as very attractive to these particular buyers.
What about the major supermarkets? Is the pitch a totally different ball-game from the independents and health supermarkets?
Yes, as mentioned before, the category argument is essential. You only get 30-45 minutes to do your pitch so there is more of a time pressure. It’s useful to have a printed and bound presentation for everyone that is coming to the meeting. Exchange pleasantries as you are walking to the meeting room with them. Ask a few questions at the beginning around their plans for the category as their answers will shape your discussion. If it’s a proper pitch, a rough example presentation structure could include the following: 1. Short introduction on what your company does and who runs it. Any accolades or certifications. Where the products are currently stocked with company logos to show this. 2. Category argument including data to back it up 3. Your products and key USP’s 4.Analysis of their current fixture with photos taken of it at an example store (shows you’ve gone out of your way and really understand their category). What this fixture might look like with your products superimposed on it. 5. Proposed Commercials and how you will support the brand through store marketing and promos. 6. Appendices -includes more detailed data and slides that the buyer might want to look at in their own time.
A good book to read on pitching is “Pitch Anything” by Oren Klaff
Thanks so much, Nick, that was so incredibly insightful. What’s next for you guys? Anything exciting in the works?
We have just launched our new Supershakes range of protein powders in 3 flavours. These are designed by our nutritionists to provide a mix of vegan protein powders with superfoods, vitamins and minerals. They’re used for either boosting your immunity, energy or vitality and have the added benefit of being quick to make at home or on the go by just adding water in a shaker.
You guys are really shaking things up! (Sorry, couldn’t help myself)
We also just recently launched our Fruit and nut bars that contain 30% less sugar and twice the fibre of other fruit and nut bars. We are the proud main sponsor of Veganuary this month so are encouraging people to switch to a plant-based diet, even if it’s for a few more days than usual.
Can’t wait to try them out!
That’s all I think, thanks for taking the time to answer in so much detail. I really appreciate it and I know lots of founders will too. Do you have any final advice, words of wisdom or tips to up-and-coming food founders hoping to one day be where Pulsin is?
Believe in your vision and stick to it!
Amazing. Such a legend.
Really great chatting to you Nick.