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How I made a £43m business without spending a penny on advertising

by LLB Editor
10th Mar 13 6:50 pm

David Milner, CEO, Tyrrells Crisps on running a multinational firm from a farm

Tyrrells has gone “downmarket” and become “less tasty” claimed William Chase, founder of the posh crisps brand, after selling the company to Langholm Capital for £40m in 2008.

“It’s being run by bankers. It’s a brand that’s catering for the masses now,” he said.

So, is that true? Is the “premium crisps” brand not worth its salt anymore?

David Milner, current stakeholder and CEO of the brand, insists that it’s anything but. He says he’s still running a posh multinational business from no swanky office in Canary Wharf but from a farm in Herefordshire.

The company saw a 43% growth in 2011-2012, with sales doubling in the past two years to £43m. The brand expects nearly 30% of its sales in the year ahead from overseas markets like France, Australia, China, India and the US. The brand has recently signed a deal with US supermarket chain Publix for distribution in 1,100 stores. 

Since, David Milner came onboard in 2010, the company has tripled in size and diversified into selling popcorn and tortillas among other products.

Next on the menu for Tyrrells is to take on its biggest competitor Kettle Chips. How will it do it? We ask Milner for some answers.

Why did you decide to invest in Tyrrells?

I was working with Kettle Chips in Australia when I heard the business was available for investment and I was very interested because I found Tyrrells to be a one of a kind brand. The one thing I knew from the outset was that unless you’re not a superior product, you’re not going to win.

So, I went out and bought all the premium market crisps in the market and put them on a table in my kitchen. My family and I ate them all one by one to decide which one was the best. We all unanimously thought that Tyrrells was the best! Then I thought, well, here’s a great brand but it’s only a small business. So I knew that if all I do is get the product to more supermarkets, I could double the size of the business.

So what was the first challenge you took up?

When I came on board I pushed for a three-prong strategy. First, to get into all supermarkets in the UK that we weren’t in already like Morrisons, Tesco and Sainsbury’s. Second, to look for international opportunities. One of the main things I’ve done in my career working for companies like Baxters Soups is to identify exporting opportunities worldwide. So, I understood the international market well. I went out and looked out for distributors I had worked with before, told them the brand story and they were impressed. The good thing about crisps is that unlike most foods that have to taste different in different countries, crisps remain the same. People in Russia, China or India love crisps. So we tapped markets starting with France then Switzerland, Holland, Germany and then we rolled out to Russia and India.

The third strategy was to innovate. I found that while we are a crisps business through and through, the brand works very well with any premium snack. So, we started with popcorn and tortillas which is very trendy these days.

But at a time where the manufacturing sectors looks grim, how did you make it work?

Three years ago, the pound was really low against the euro and everyone was complaining about it. But actually, exporting from the UK at the time was a very big bonus. Today, the pound is at a two-year low against the euro. Every time it falls, you can either make more money or you can invest in other markets that would otherwise perhaps not make sense.

For example, when I lived in Australia, the exchange rate was about Aus$2.7 for a pound. Today, it’s Aus$1.5.  So, when I worked there, you couldn’t possibly make crisps in the UK and sell them in Australia because the transport costs would wipe out any profitability. But today, I can get any product to Australia, make a profit and undercut the local player.

Next year, we’ll have nearly 30% of our sales from outside of the UK. In three year time, half of our business will come from outside the UK.

That’s great. So what’s the tricky part for you to grow the business?

Being able to manufacture enough is the tricky bit. We’re three times the size in three years so we’ve had to buy more machinery and space. Managing a multi-national business from a farm can be incredibly demanding sometimes too.

What attracts people around the world to the brand?

Consumers know that there is a difference between a bag of Walkers and a bag of Tyrrells.

The premium crisps market is a £140m. If you went to France a few years ago, there were no premium crisps whatsoever, same for Germany. But now, with Tyrrells we make 10 million euros in retail every year. People like the brand in those countries because it’s a product they’ve never had anything like before.

The other reason is that we’re very English, our style of packaging and our approach is very English. People get the humour on the packs and the funny black and white photographs go down well too.

You’d think that the one country where English crisps won’t go down too well would be France, but France is our biggest market outside of the UK by far.

India is another key market. I went to Mumbai, Delhi and Kolkata to expand the business and we now have a really solid market there. The only problem is that there aren’t many supermarkets and we don’t want to target the corner shop. But we’re in all the 5-star hotels like the Oberai. The Indians found the black and white very funny and absolutely got the brand.

How much does the branding and packaging play a part in popularity?

I personally spend a lot of time on branding and packaging. Just last week, I spent all day in London looking at photographs. That’s because we don’t do any advertising. What we do is we spend a lot money and time on packaging. We jokingly call it ‘packvertising’.

But don’t you need a few adverts here and there for brand recognition?

We have got the brand out there in the market cleverly and at a low cost. Media spend is a very tricky thing. Twenty years ago, everyone watched the same TV programme, today’s it’s so different. I’ve got four children watching TV on their iPads and as soon as an advert comes along, they change the channel or fast forward it. I think the old way of advertising is a little bit over-rated. Even if someone gave me money to do it, I’m not sure I’ll do it.

But the moment you mention crisps, Walkers, is what pops to mind. Are they your biggest rival?

I don’t think we’re in the same market as Walkers, our competition is Kettle Chips. They are brand we’re looking to beat.

So what’s your strategy to take on Kettle Chips then?

Our strategy is to continue building our distribution in the UK because we’re still not in Asda and we’re only in about half the Tescos. So, the real drive in the UK for us would be innovation. We’ve launched tortillas called ‘Tortyrells’ and we’ve launched a popcorn range too.

I think the disadvantage Kettle Chips has is that they have ‘Chips’ in their brand name. Tyrrells, on the other hand, can broaden into other snack areas.

If you had to give one message to David Cameron for helping businesses grow, what will it be?

The government needs to inspire people and help them work internationally. I think a lot of companies are afraid of doing it. David Cameron invited me to come along on a trade mission to Russia and he introduced us to a lot of people there. That trip helped me make great contacts and was brilliant for me and I think he should do more of it.

The other main thing that Cameron needs to do is to cut the amount of red-tape English businesses have to deal with. I was trying to get permission to expand my factory and it was incredibly difficult. You have al
l sorts of paperwork and bizarre questions. Here we are trying to expand, provide jobs, drive industry but I am wasting time here going through tedious procedures to expand my factory.

What would you say to William Chase’s critique of the brand?

(Laughs) Well, William Chase is a brilliant entrepreneur and he did a great job setting the business up. I think the trouble with anybody starting anything is that it becomes your baby and you never want anyone else to run it. The fact is that the product quality is better than it’s ever been. Maybe the fact that we tripled the size of the business since he sold it makes him think he should’ve held on to it. But then again, he’s done a great job with Chase vodka so hats off to him.

Great! Thanks for your time David.

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