B (4:48)

And what was it like taking over the founders? I mean, they're very famous, aren't they, the three of them, and their story's very well known and they would have presumably run it in their own kind of way. And now with the Coke investment, you're now CEO. What was that challenge like taking over three such famous founders, taking over from.

A (5:04)

Three highly successful, high profile, vivacious founders, when I'm a bit of an introvert, was, was definitely quite daunting. I think what was really helpful is that there were three of them and they all had different characters. And so when I knew when I took over, it wasn't like, oh, I've got to kind of mimic the founder because you couldn't mimic three of them. And I guess it was like, okay, I have to be myself the reason I'm. I've been given the job for a reason and authenticity is really important to me. So it was like, okay, how do you be yourself? And when it came to, I think the really important thing was I obviously had been in the business while. So people knew what I stood for, what I was passionate about, and really purpose, vision and values of innocent was deep in my heart. And whilst I wasn't necessarily the amazing Richard Reed, front of House speaker, what I describe as still waters run deep, people understood the depth of passion I had to maintain that and therefore could bring people with me because people realized, yes, we want commercial success, but at the heart of this, the purpose, vision and value still remained and we just continue to try and make get that balance right as we then grew the company from 100 to 200 to 300 to sort of 500 million over the, over the next 10 years. Wow.

B (6:17)

So it was around 100. It was turnover when you started.

A (6:20)

So when I started it was about 50 million euros as a business. When I first joined, when Coke first invested was around 100. And then when, when I finally took over CEO, it was 200. We'd launched juice and Kind of gone from smoothies into juice and the business had doubled very quickly. So I took over at about 200 million and, and when I left it was 500 million of turnover.

B (6:36)

Very impressive. Now a lot of startups struggle in the scale up phase, don't they? Because kind of what got you to there doesn't necessarily get you to the next stage.

A (6:44)

Definitely.

B (6:44)

What were the key lessons and insights about how to scale a business that like Innocent, that kind of proven itself. It got to a certain scale. How'd you go from that 100 to 500.

A (6:53)

The trick was you have to be, as I said, incredibly respectful of the core reason that you're all there, the mission, the purpose. But you have to have, I think, enough self confidence to say, yeah, but things have got to change and, and I'm not a massive process guy by nature, but you have to put in enough process in order to keep moving at pace. So we didn't want to lose that mindset of we're entrepreneurial and we move fast. But that wasn't the same as oh well then let's, let's be funky and have no processes and all just because you start smashing into each other. So it was about creating the disciplines, but making sure that you weren't becoming bureaucratic and at the same time making sure that the culture and the brand and the types of people you hired were people that rolled up their sleeves and got on with it. They felt passionately about the mission, they had some, maybe a bit more experience than some of us had in the past, but they're still prepared to do the work. And being prepared to do the work in a scale up is really important. You can't come from big, you know, people sort of, it's seductive. Let's go and work for Innocent or Tony's and. But if you're not prepared to do the work, you're going to die on your backside pretty quickly.

B (8:01)

Yeah. And for anyone not familiar with Innocent Story, what were the key moments in its, its history that really defined it as a brand and led to the growth?

A (8:09)

Using the bottles as a way to, to talk to consumers. They had no money, they had a credit card. They were trying to build a brand from the bottom up and they were the first ones to say, oh, instead of just writing boring ingredient stuff, we can actually have a conversation with our consumers. So they were kind of, if you like digital, before digital existed with the first kind of newsletters and the way that we talked on the packaging and what then became called wackaging and innocent was loved and hated for it in equal measure by different people was definitely a kind of core point of difference. That sense of the whole industry said, no, nothing but nothing but fruit couldn't be done. You need preservatives, you need whatever. Just that sort of slightly intelligent naivety saying, yeah, but it must be able to be done. You know, that sense of relentless finding the yes in the no is something we talk about a lot. So as ever, a great product. It was delicious, it worked. The repeat off the shelf was great. And then obviously smoothies just became bigger and bigger. But it was always a small part of the category. You would get you to 100 million but wouldn't get you further. And then obviously, I guess the next phase was saying, okay, we're going to reverse into juice, which was the largest category. But again, how do you do that in a way that creates a real point of difference? And you know, we talked about stealing with pride from a lot. So there was a juice brand in the US that was in a carafe and so we did our own version of that, put it in a transparent bottle, made the juice product and everything else was a wall of tetra. And suddenly we come along with a brand that people kind of like. And then a very different product proposition. The juice inside wasn't that different, but the combination of pac decent quality product just transformed it. So again, that was the next phase of growth. And then from there we could expand out into super smoothies and coconut waters. And you know, international growth was clearly a really important part of the story as well. So taking something from your home market, being in the UK to then starting to build a global European business in the case of Innocent and finding ways to make the French think that innocent's a French brand. So again, we talked about copy earlier. One of the things I'm proudest about my time Innocent is that the French think it's a French brand because we gave pop bunch of copywriters say, okay, this is the brand I can feel. But you've got to do French jokes, you've got to do French storytelling. Your advertising, you know, when you started to do at home purchase has to be about your connection to the local. And I think particularly with food, people are very. It's very rare for food businesses to kind of quickly go country by country because people are very specific about the kind of food they like and what's French or what's English or whatever. And we just found a way to connect with consumers and particularly if you're a purpose led brand. I Think you have to find a way to connect locally with people. Being a purpose led brand that's sort of very, you know, flat and the same everywhere. People, people want to feel a kind of personal connection to a kind of purpose mission led brand. So you have to adapt your marketing locally. I think that was a really key part of the success as well.

B (11:01)

I mean I was a competitor at the time, so, so watching all this kind of from the sidelines a little bit. One interesting thing I noticed is I think a few, maybe about 10 years prior, maybe less than that, Minute Maid had launched in the UK And Minute Maid had been a astonishingly successful, but lasted only about a year, 18 months. And I think that shows the power of the brand, isn't it? Because essentially, you know, fresh juice in a bottle, say, you know, craft bottle looks pretty similar but the innocent brand just carried it in a way that you know, another brand wouldn't do.

A (11:28)

Two things, and probably one that's an untold story of innocent is the operational kind of excellence in chill that sat behind that when one of the founders, John Wright, you know, was a bane brain and he structured the business from day one to be able to cope with the various phases of growth and having the discipline to have good forecasting, to do all the grind stuff that when you then become in the juice category, I think minutemay one of the reasons it fell over was because they got their forecasting wrong and suddenly had a whole pile of waste and waste and chilled is an absolute killer. So you're suddenly like selling okay, but I'm killing myself on waste. So there's a lot of sexy, fun marketing stuff about Edison but there was an underlying core of kind of high performance operational excellence that also. And it was that combination that I think really drove the success and then allowed us to attract great talent into the business as well.

B (12:19)

It's a good point because you'd mastered chill supply chain and demand by that point. So you knew what you're doing compared to minimize. I mean the other interesting thing is that I was at Britvic at the time when Coke bought a stake in Innocent and we all thought it was going to fail because we're like, yeah, Coke doesn't do acquisitions. They've bought a shit, I think about 30% share, hadn't they of Innocent. And we all expect it to fail and it didn't. But I think that Coke took an interesting and approach, didn't it, to the investment. So rather than integrate it into the Koch system and leverage the power of that system, which you'd expect them to do. They actually kept innocent, independent, with lots of autonomy. What role did that play in the success of the next?

A (12:54)

My personal view is it was everything in the sense that James Quincy, who's now the CEO of Coke but was at the time running Europa, who did the deal with us, what he was very clear about was we're buying the brand and the capability of Chilled. We don't have that capability. We love the brand, but we also want that to build a chill platform for Europe and that's different from the skill set that we've got. And so very clear as they came in with that minority stake, we're going to leave you alone. And he built into that model protections because big systems love to fiddle. He built into the way that we did the agreement and the phasing of the kind of buyout so that by the time we got to 2012 and Coke owned all of it, we'd already double, more than doubled. But. And also built relationships and credibility with the system so that they were like, oh, actually those guys know what they're doing and it's working and they're growing really fast. Let's just leave them to get on with it. And that allowed us to invest in the business and build the business in that kind of purpose. That way we're making decisions that are like investing for five years at a time and making those choices and all the rest of it. And so, and, and the bottler, obviously this Coke structure is this sort of split structure. The bottler was, had amazing experience in Ambient, but absolutely Chilled. And they really are, they're all Drinks, but the ying and the yang of those two things is huge.

B (14:10)

Yeah.

A (14:10)

And they were smart enough to see that and then let us get on with it.

B (14:13)

I think it's one of the best examples of innovators dilemma because one of my favorite books, the idea that, you know, big companies can't innovate because, well, they can innovate with, you know, with incremental innovation. But when they try and disrupt with new categories, it becomes very hard because, you know, they would probably have viewed Innocent as still quite small.

A (14:28)

Definitely.

B (14:29)

I mean, I worked on what we called the seed brand portfolio at Britvic and people are always going, oh yeah, John, you. Only 3% of the turnover, you know, why bother? You know, we'll, we'll put Pepsi on promotion in Tesco and we'll easily beat your annual annual sales. But I think the thing I learned is it takes a lot longer than people think to become successful and you know, the whole FMCG machine is all around. We'll launch in one year, you know, we'll give everything, everything behind it, be an immediate success. But overnight successes rarely ever happen. And I think people forget the amount of time that actually goes into like innocent to build it up. Grassroots.

A (15:01)

Yeah.

B (15:02)

I mean, before it becomes a sustainable.

A (15:03)

Every, every market we went into or even product that we launched, you know, the classic five year overnight success story story, you know, no one had heard of it for the first five years and then they got a waitress listing and then, you know, 2005, six, it was already six or seven years old. No one in a big company would have had the patience for six or seven years. But when it's your own space. And similarly with products that we launched, we, we didn't do the biggest, put loads of marketing on day one behind something that we believed in. It was always launch two or three different things, see which one's selling itself on shelf. Because ultimately I genuinely believe if it doesn't sell itself on shelf, it's going to die anyway. However much marketing you throw at it, you know, you can't dress up the pig, so to speak. And so then we would back the things that were working on shelf and have confidence that we could, you know, then turn the campaign around or dial up the money and spending money on things that are already working, it's just so much more effective. And when you've got very little marketing money, that's just a smart model. And I just think the big companies get themselves in, the money's available and the big machine is chucking the money. So it's tempting to say, yeah, we've got loads of money, so why don't we spend it on day one? And then when it doesn't work, there's the Spanish Inquisition and then everyone gets fearful. So then they take even longer to launch the next thing because there's more and more rounds of marketing testing. So someone's covering their backside. We were much more get products to market. Each product launch maybe cost us 100,000, but so if it didn't work, you were writing off €100,000, not 10 or 20 million. A marketing campaign. And so it never felt failure, never felt too painful, and then you could back the winners as you went. And similarly with countries, you know, start with a small team, get really clear what you're trying to achieve. And yet none of our markets even took less than five years to get to a meaningful scale. And it's similar with Tony's. I mean we're you know, we're seeing now amazing success in lots of our markets, but I was like, oh, wow. Like, it's everywhere in the UK or everywhere in the US it's like, yeah, we launched in 2017. Like, no one remembers the hard yards for the last five or six years.

B (17:00)

I think that the two best bits of advice in any of this conversation is you need to remove the fear of failure, because as you say, most people are trying to negate failure rather than optimize success.

A (17:11)

Absolutely.

B (17:12)

And then big systems are all designed around annual calendars as well. And if it hasn't kind of hit 10 million year one, people will go, it's not a success. But most successes happen over a long period of time. So getting that long and short. Right. Is incredibly important, particularly for innovation, I think, because it does take time, doesn't it, to get the right distribution, get consumers to adopt it, get awareness built.

A (17:31)

Definitely. And some of it's about iteration as well. I mean, Super Smoothies was a great example. We smoothies have worked for a long time. And then Naked had come into the market. It was like, do we do it? Do we do a copy? And we sort of. We went into that category and we didn't get it quite right. First time there was enough for Excel to go, yeah, there's something here. But we did fast iteration of sort of three different steps over about a year and a half, two years, and then all of a sudden it flipped and you can never. You would have never been able to. If you spent all the time researching that upfront, you'd have kind of driven yourself in knots. But we just did small iterations and yeah, it was year two, year three, and then suddenly it grew incredibly rapidly. Kind of you tapped into that kind of sense of natural energy with the vitamins as well as the nothing but. Nothing but fruit of the core smoothie range. And very quickly it became much bigger than our core range. So sometimes it's, yeah, it's that patience, but. But also don't be patient being passive. You've got to be patient. But. But we've got to, you know, something's got to change. So what is it? How do we quickly get onto that project? So it's finding that balance of being always hungry for. So no, it's got we. Continuous improvement. Right. How do we get better? How do we get better? The great thing about Chilled was when it was really a dog, you. You just had to kill it because the waste got you so quickly. It was like. So in a way, sometimes the temptation is like, oh, it's a million. Let's leave it around because it's a million in revenue. That's helpful. Like the waist built and chilled just meant you went, yeah, kill that one, let's focus on that one. So that it was sort of a self protection mechanism.

B (18:58)

The other advantage you got is speed. I mean, I remember I did four years in Juice at Juice Burst. And the thing that really shocked me is I was used to Britvit, where I think 12 months would be a really quick turnaround. So 12 months would be an on pack promotion, you know, probably not even a flavor actually in 12 months, probably 18 months to a new flavor. And then when I turned up at Juice Burst, the private equity owner said, you got 16 weeks to design a new bottle, design new labels, launch new flavors, get retail distribution. Because at that point it was a food service only brand pretty much. And we wanted to get into retail in 16 weeks. And it was crazy. I mean, we did it because we could parallel everything at the same time. Being small, we could make decisions every single day. You know, parallel shelf testing along with label design, along with kind of like, you know, launch information, you know, to all the, all those customers, that kind of thing. But I think in a smaller business you can do so many things quicker, can't you? In a way that, and this is probably another thing if you're in the Coke system trying to get a new flav Innocence, really.

A (19:52)

Yeah, exactly. But at the same time, sometimes that is overplayed because when you're really small, you can go really fast. But even Innocent and even here at Tony's now, when you're trading off, okay, we prioritize in the Netherlands packs that they want or the ones from the US and they're coming off the same production line and sequencing. You know, I don't want to overplay the, oh yeah, we can get stuff to market in eight weeks because generally we don't. You have to be thoughtful. And as you get bigger retailers quickly, you quickly move over the, oh well, they're small and we're trying to help them to the, you're a big guy now. If you screw it up, you know, there's pain involved. So you once that sort of bar with big retailers and we, you know, Innocent was a grocery LED brand and Tony's is a grocery LED brand. There's a certain standard the way you go, okay, it is worth taking the time. But, but where I think you can cut a lot of time out is in the in is a sort of constant, as you say. The risk aversion of covering your back with, you know. Yes. I'm a big fan of one round of research and does it back your gut instinct of what you think about this product. But then people then go, oh well it's not, let's do another round. And suddenly another six months has gone by. So I think it's mindset more than it is a system thing.

B (20:59)

Yeah. And also you don't have to like seeking approval can be a lot quicker, can't it? Because a few people in decision making process, you're not competing with other. The thing I found really challenging at Britvic is I can't remember how many brands it might be. We might have 20 brands and, and I had to fight in every kind of monthly meeting for just, you know, a time.

A (21:16)

Yeah.

B (21:17)

Line, all of that spreadsheet type thing.

A (21:18)

Which is why I love this scale of business. Because you know, again, when I, when, when I interview people and bring people in business, I say the difference here is you can pull a lever and see the effect. You can, you can understand how your personal contribution has made a difference to the company's growth. Whereas I think in some of those bigger systems people, lots of bright, capable people, they're like, you know, if I was here, would it really make a difference? And I think in this, I love this phase of going, you know, 100 million to 500 million because there's a lot of kind of big choices and you need a lot of brain power and you need a lot of capabilities but at the same time you can still see how you make a difference and I think that's really powerful for attracting talent.

B (21:53)

So Talking about the 100 to 500 journey, you're now applying that to a different business here at Tony's. Tell me when the call came in and why did you say yes?

A (22:01)

So I spent 16 years at Innocent. I'd done nine and a bit as CEO and we'd reached that point where I was like, it's about to, there's another three year cycle coming up. Do I want to stay and do my kind of fourth three year cycle as CEO? I just, I honestly to some extent, I just didn't have the vision of, okay, the next phase. We've taken it, we built this amazing manufacturing site. Just felt like I'd taken it as far as I could take it. And there's only so many times you can go around in one category. Obviously there are connections between Innocent and Tony's in the sense that the founders of Innocent are also invested in Tony's so when I was chatting to them and obviously sort of know them very well about oh I was thinking about what next. Can you introduce me to some people as I start to think about that journey they said yeah sure and met a few people. Then about a few months later they came back and said oh well Hank Yan who is the sort of CEO and sort of major shareholder of Tony's is thinking of it's the time for him. You know he's loved that naught to 100 million phase and is thinking actually is he the right guy to go from 100 to 500 rather than step back as a non exec. And so he was going through that journey. So they said to me are you interested? I said yes, but I can't move. I was thinking well they're not going to allow me to come and do it from the uk. But Covid had happened. Everyone got used to a world of teams and so now yeah I do a kind of one week on, one week off in the Netherlands and I jumped at it. I mean if you're me who loves this phase of business, who has very passionate about purpose led business, you know I'm, I'm a co chair of the Better Business Act. I led Innocent into B Corp. I'm a huge believer in demonstrating that good businesses can be large businesses. There aren't many better brands and opportunities in terms of the potential that Tony's had. So it was like, you know, I couldn't go and join Shell as a sort of next step. So it was like. And actually there aren't many that are of this size and this potential. So I was like that's mine. I was very clear. As soon as he'd said I was like yeah, that's mine, I want that. And then, and here we are now.

B (24:04)

Anyone in Holland will know Tony's very well because I mean literally can't go to a store without a wall of. In fact the wall behind you is probably like most Albert Hines. I mean the hotel I was staying in last night actually that like two walls of Tonys that you could kind of, you know, buy with your card sort of thing. But obviously you're starting out a lot of market. But for anyone who doesn't know the origin story, there's a fascinating story isn't there about how the brand came to life and it wasn't what you think. It wasn't like I've got a product idea, let's, let's dream up the best chocolate brand. It was motivated by quite a different motive Wasn't it?

A (24:37)

Yeah. I mean, what I say is the mission came first and the business happened by accident. You know, we were founded by three journalists who, who had a TV show and they were investigating inequalities in the supply chain. And in 2000 there'd been a big industry promise that we were going to solve child labor issues. There's one and a half million children working in child labor in West Africa. And it was more back then, for me that's totally unacceptable. And for them it was too. And they said, okay, five years on from the chocolate company saying, oh, we don't need regulation, we'll sort it out ourselves. Let's see how they've done. And they went to West Africa and they realized that they'd done absolutely nothing. And the situation was, you know, pretty shocking in terms of the exploitation that was going on in the industry. And they then tried to persuade the big guys to say, well why, why don't you do a this kind of bar and make it more ethical. And you know, after the phone being put down on them sort of so many times they were like, how do we ramp this up? And they got themselves arrested to yeah.

B (25:35)

How did the arrest happen?

A (25:36)

Because they basically found an EU law that said if you're, if you're aware of child labor in, in a product and then you, you participate in that product, you're committing a crime.

B (25:48)

Wow.

A (25:48)

So they walked into a police station and said, you need to arrest me. I know that this child, I've been and seen it. I know there's child labor in this chocolate bar. You need to arrest me. I'm committing a crime under e law. And of course the police and the legal system are like really? But they kind of kept bumping it up and obviously this was all part of a TV documentary. So it was becoming more fresh. Eventually the courts threw it out. So that you can't prove that that particular chocolate bar was related to the. But they flew over children, you know, traffic children from West Africa and had them in the court. And, and then after that part they were realized, okay, we're not going to persuade them to change. We have to lead by example. We have to do it ourselves. And the sort of third series of this documentary was, you know, Dragon's Den. How do we make a chocolate bar? And you know, so many accidents. The packaging you see behind me right now was literally the thing that, you know, who is still our, you know, one of our in house drew on a sort of Napkin as a 10 minute brief of for the TV show. And then they went to our, you know, which is a co packet we now own, and said, could you make some? I said, yeah, well, the only thing we can make is chunky bars. So. And that's, you know, there was no thought in, oh, let's differentiate with the chunky bars. Like, we need bars in. In four days time. Well, this is the mold we've got. Okay, make that. And then. So all these happy accidents that then turned out to be winning consumer propositions of a chunky bar with bright packaging that completely breaks the codes on shelf so it sells itself. And then obviously, we've worked hard over time to make sure that that chocolate's absolutely delicious and in lots of bold flavors. So, yeah, one of those accidents that happened, and that's how it came about.

B (27:21)

Isn't it insane? Because you assume most companies would employ a very expensive design agency, spend years kind of perfecting it, 10 minutes to find a design to put in a show.

A (27:32)

As, you know, when you put something like this, like, we've got an episode that's going out next Tuesday. Can you do this by then? And, you know, serendipity, they also went. They did. They sort of flew to Ben and Jerry's and said, can you give us some ideas? And. And the guy who was in front of the camera was a guy called Tone Van Der Koken. And they're like, well, if you're gonna. He was gonna. I'm gonna call it Tones Chocolate. He's like, well, if, you know, if you want to be an international, global impact brand, it's got to have an international name. So why don't you call it Tony's instead? That was the Ben and Jerry suggestion. And, you know, all these years on, we now work with Ben and Jerry's through our supply chain and they source cocoa from us. So there's just all these really nice kind of moments, but all crashed together as part of a sort of TV production process that then turn out to be these amazing pillars of the brand.

B (28:15)

I love that. It's so funny, isn't it? Because these act, these acts, you look back at success stories and you kind of think, oh, there must be loads of thought that goes into it. And sometimes it is just, you know, force of circumstances or constraints that get the constraints of having to take whatever the co packer had available at the time. Absolutely. I mean, the product itself is, I think, one of the most essential ingredients. Excuse the pun, but it is essential. So what goes into making the chocolate so good? Because, I mean, I confess, as a Regular consumer here. And I've tried many alternatives. It is genuinely one of the best bars of chocolate you can find.

A (28:48)

So I think a combination of making sure that you use high quality ingredients and you're not cutting corners. And obviously, as big companies get more cost focused, it's easy to say, oh, well, we'll have a little bit of the. Less of the more expensive, you know, milk powder. So just maintaining quality standards around how you get that richness of flavor. And then I think the bravery that we've had around flavor combinations. And yes, everybody's done a sea salt caramel, but we kind of did a sea salt camera quite early. And the, you know, the chunkiness of the bits is something that people in our products is something that people really appreciate. So it's that combination of good quality chocolate with kind of interesting inclusions and bits just has just resonated with people and it. And it works. And I'm totally with you. Like, we can all get very excited about the brand and the positioning and the stunts we've done and the fact that we're an impact brand, you know, without a great product, then you go nowhere. And, you know, we, the impact side is incredibly important to us. And we talk us, we say, you know, we're an impact company that sells chocolate, not a chocolate company that's. That does impact because we put that impact at the heart of it. And the whole point of this is to change the whole industry. When I was at Innocent, it was about proving you could be a good company at scale. The difference here at Tony's is that founding mission that then the guy started off with was we have to change the whole industry. There's no point us being tiny and doing it the right way unless the mission is to change the industry. We do not eradicate child labor. And so for me, you know, I'm CEO of a change mission, not of a brand. And that's really interesting because it just gets you into all these different ways that you structure and grow the business. And what growth is important. Is it the growth of the revenue of Tony's Chocolone, the chocolate brand, or is it the number of beans we're sourcing from West Africa by also opening that up through our Tony's open chain model to other. To other brands as well? Which was again, a key moment and a key decision for us was saying if we really mean this impact thing, we're not going to grow fast enough on our own. To prove that this model works at scale, let's open it up to anybody. Including our competitors who wants to source beans in the way that we do. And we had all the NGOs saying this is working. So now lots of private label players, Waitrose in the uk, you'll find a Tony's Open chain stamp on Waitrose Private label Albert Hein have just now committed all of their chocolate sourcing for all their products, not just bars, to Tony's Open chain. Ben and Jerry's came on board as a partner a couple of years ago for all their chocolate and their ice creams. Feastables. MrBeast Feastables, very rapidly growing chocolate brand in the US again have come on board. So our impact business, our B2B cocoa business is actually growing faster than Tony's Chocolate, only the chocolate business and that's growing at 33% year on year.

B (31:41)

So that gives you some dilemmas though, because if you got to think, because in that case you're thinking about the impacts in the entire category, not just yours. But does that give you any trade off dilemmas in terms of you going.

A (31:50)

To push Tony's versus definitely it's the, with, with the brand. Tony, you know, we're famous for being quite bold, quite edgy, saying, you know, we've got to raise awareness of the issue and how do you do joy whilst explaining there are one and a half million children talking in child labor that, you know, lots of people do Alpine looks and cows and isn't it beautiful? We're quite raw with the way that we talk about the issues in the category. Yeah. And, and also support the product. That, that's great. But, but actually, you know, then the trade off is do I get edgier and edgier. But if I'm trying to persuade people also to come with me on the journey of change, you know, when do they start saying those guys, like we're never going to work with those guys because they're just too edgy or they're too this or they're too that. Which you know, come on to talk about, you know, the, the brand and the marketing side. Sometimes we have to make those trade offs and say, yeah, actually it's better to give our open chain stamp and our USP of sourcing to competitors. Because what matters is our five sourcing principles on the ground. Have volume grow fast and we get to 5% of the beans in West Africa.

B (32:58)

Yeah. Wow. I want to touch on pricing briefly as well because that's another challenge you've got, I suppose, because let me ask, what's the, what's the premium you have to pay to maintain your kind of slavery free.

A (33:11)

So on, on the cocoa element and obviously there's a kind of interplay with the world market price, but we, we commit to paying the living income reference price which is set independently each year and typically over the last five years that's between 60 and 80 premium on cocoa. And so yes, on, on the cocoa element of the product, it's a 60 to 80% premium, which, which then translates into about a 25%, 30% premium on shelf, depending on the market, depending on the exact product that you're benchmarking against. So it's a material increase. In the UK we're probably a pound more expensive than the equivalent bar size for Cadbury. But it's also one that increasingly consumers, both because of the quality of the product and then increasing loyalty through the mission, are prepared to pay. And I think once you know that one and a half million children are working in child labor, it's quite hard to unknow that as well in terms of a behavioral drive and change.

B (34:05)

Well, one of the things that sort of juxtapositions you've got, which I find fascinating is you're dealing with a very, very serious topic. And most brands would, the packaging and what they do would also become very, very serious. And yet you've got this wonderfully fun, tongue in cheek sense of humor, bright packaging, you know, quite, you know, quite fun and engaging. And how do you balance those two things kind of being, you know, serious about what you're trying to do, but also create a brand people.

A (34:28)

Yeah, I mean, again, it was similar innocent. You can't be if your hair shirt about everything is like, oh, it's really bad and terrible and you know, you've got to, you've got to bring joy and you know, make you, makes you smile is one of our values. And you know exactly that. It's like, how do we bring consumers? We know that consumers won't and their innate initial driver will not be, oh, is this an impact brand that's changing things on the ground in West Africa. They'll be like, does that look cool? Does it taste good? If it tastes good. Oh, the discovery, the loyalty part is from the discovery of oh, and they've got an amazing mission and I'm going to tell my friend about that. And you know, the penetration comes from storytelling. So it's just as you say, it's finding the balance between how do we cut through on the mission and you know, that opens doors for us, it opens partnerships for us. It get, you know, Gets a lot of, you know, earned media for not a lot of investment. And our marketing budgets are absolutely tiny because we're paying the farmers the right price. And so, yeah, to grow the business to 200 million that we are now with kind of 3% marketing. If you're hair shirt, you're never going to do it. You have to be bold, you have to be loud, you have to have a sense of fun because you want people to like you. You want people to be. Yeah, that's the club. You want it to be the cool club. You want the thing that people are in, not the. Oh, God, okay, let's all go and feel guilty about what we're doing. That's the balance we're trying to strike.

B (35:51)

You're kind of like, oh, I spent my advertising budget on paying farmers a fair wage kind of thing, isn't it? One of the things that I really admire about you is your transparency and your willingness to admit even when you don't even live up to your own standards. Right. So I noticed with the slave 3 slope of my teeth back in. But you know, when you talk about being slave free, you've changed that, even that phrase, haven't you, recently?

A (36:13)

Yeah. So one of the key things is, you know, if you're going to tackle child labor, it's not something that you can say, oh, we've tackled it and goes away. And what we've always tried to say is we're going to put a system, our five sourcing principles that drives change over time. So in our, you know, in our marketing and in our AFR and our reports, what we report every single year is the number of child labor cases that we find because we go out and look for them, because we're educating farmers about how many. So now today we've shown that you can take on a typical farm In West Africa, 50% of the children you will find working in child labor, so, so doing illegal jobs under sort of Ghanaian or Ivory coast law, when you audit our farms, it's less than 4%, but, but it's still 4%. And we're very happy to report about that and talk about it and say, yeah, we've still got work to do. So, you know, again, in some of the early days when we were like, yeah, we're slave free people like, oh, is that a misrepresentation? And to some extent it was. We've moved to a kind of wider promise of exploitation. Because what we've realized is if we want to tackle child labor, what you, what you have to do is tackle a number of things. It starts with poverty and paying living income. So you know, we pay living income price to every farmer. As we talked about it, it's also tackling deforestation, which is, you know, a huge problem in West Africa. And it's facing in and tackling and going to look for child labor because that's how you then educate the farmers to say, if we're committing and paying your living income, the quid pro quo of that is that then we find ways to get your children into school. And so being, you know, transparency is my friend because I can report on those things and sometimes journalists pick them up. And we had a story in the headline, oh, child labour and Tony's supply chain. Their source was our report. So I'm like, that's not really, not really journalism. That's clickbait. At the same time, you know, a gift I would wish on bigger companies actually is the ability to say, okay, we're going to share every, everything that's under the rocks here. And our commitment is now that we get better from here. So Tony's. What we're committed to is just continuous improvement, raising the bar, but also being very transparent about where we are, what's working. You know, we didn't just magic the five sourcing principles. Loads of the stuff we tried in the first place didn't work. And we've talked about that consistently through our reports. Where we've got to now is a model that is really working, backed up, you know, with NGOs coming to auditors, PwC coming to audit us and say, yeah, here are the facts on the table, this is the results that we're seeing. You know, all our cocoa comes from non deforested areas. Our child labor rates are way, way, way lower than anybody else in the industry and we're committing to a living income price. That's powerful change. That is why so many people are coming into Tony's open chain as well, because they see the results. And being an impact company rather than saying we've got a purpose or we've got a mission, that's the difference. The mission, the impact is the results you get, not the statement you've got on the wall about what you'd like to do. So when we talk about being an impact company, it's because it's about demonstrating the impact we're having against an ambition to end child labor. But that's the statement, that's the mission. The impact is what you actually do and the actual results that you have. And that's really important distinction, I think, in terms of purpose has had a bad rap to some extent because I think people have put a nice phrase on the wall, but they're not actually done a lot about it. It's not a stick of rock that runs through them and they're not actually driving for wider results across their business or a wider result like we are across the whole industry.

B (39:37)

Yeah, well, this is where I think purpose gets a bad name, isn't it? Because people like to do it as a nice statement of corporate responsibility. But actually what you've done is gone to extraordinary lengths to actually demonstrate that your promise actually is. Is happening. And you also admit when it's wrong, which I think is a really good kind of proof point, that you care about it and you actually, you know, want to make a difference.

A (39:56)

Yeah. And similarly, when, when I was at innocent, when you're called innocent for the first 10 years, everyone's with you and then everyone wants to knock you off the pedestal and write the guilty headline. So you have to be on your game every day. And I think that's where transparency is just. I love it because it's like, well, yeah, we can admit when we screw up and actually people give you credit for that. And I think that's, that's, again, really powerful because this is about trust. This is about, you know, building what I call leaf drops of trust with consumers over time. And even if you're not perfect, but you're open and transparent and authentic about that people. Yeah, I trust that business sort of.

B (40:31)

Creates believability, doesn't it? Because you go, well, if they're willing to admit that small percent, the 4% of what you said exists, then A, that must be true because they've gone and done the research to, you know, to find out. And B, if they're willing to talk about when they get it wrong, they must really care about getting it right.

A (40:46)

Yeah, exactly. And we know that the industry, the change model has to happen over a period of time. And what we're trying to role model is, yeah, we're not expecting a magic switch to click and it's all solved. It's like, put the work in. We're showing you a model. If you put the work in over five or 10 years, we can change this whole industry to a place where millions of farmers in West Africa are not exploited. And I genuinely believe a tipping point is coming. You know, EU regulations are also playing a role, deforestation regulations where traceability is becoming more, more and more needed. The thing that They've said, oh, it's impossible to do traceability. Suddenly there's an EU law and traceability is coming along at that point. It's just an economic choice. Once you know who your farmer is, it's just an economic choice of are you going to pay them a living income or not? And so that's, that's why I genuinely believe we're showing we're raising the ceiling, legislators are raising the floor and that's, you know, that combination I think is going to drive change over the next five to 10 years. My job is to accelerate when that tipping point happens and just keep banging the drum, raising awareness, inspiring others to act. That's, that's, that's the essence of the brand.

B (41:50)

Let's talk about international expansion because, I mean, I was fortunate enough, I was actually commuting to, well, working in Holland maybe 10, 15 years ago. So I sort of discovered the brand by virtue of that, really. But are you number one in Holland actually, by the way?

A (42:05)

So we're saying it feels like. So, yeah, so we're basically between us and Milka, we're the top two and we kind of josh for that top position. So we have about 17% market share in bars in the Netherlands, which is kind of, if we replicated that everywhere around the world, we'd be a billion, billion dollar company. So, yeah, so Netherlands is our heartland and continues to grow. But clearly the growth that we've seen in the UK and now, particularly in the us, where the brand is really taking off, is just meaning that the business is growing incredibly fast in multiple markets and again it's that it's resonating in multiple contexts. We've got a business in Australia through a distributor, none of us have ever been there, we have never spent a penny on marketing there and we've got national listings in Coles and Woolworths. So it tells you that the innate cut through of the product on shelf and then the quality of it to get that repeat purchase that you need to stay on shelf is there on itself. And then it's. How do you layer on the marketing positioning and to drive that forward?

B (43:04)

Well, I'm familiar with this challenge, having done international roles before, because taking a brand that's really strong in one market and then starting from scratch, in other words, really hard to do. What's the secret to getting international expansion and having the patience to do the right thing rather than expect to turn.

A (43:19)

Up and yeah, I think both here and at Innocent and you've got to find the right talent and You've got to find the talent that believes in your mission, believes in the product, but then understands the money. And you have to respect that they understand the market. Because if you take so many markets actually the consumer is not that different. But the trade structure, how you go to market, where you give margin away to the retailer, how the logistics have to work, it's so different. So you, so you. I think where people made a mistake, and we certainly did in the early days of innocence, like let's, no, we've got a successful model, we must copy it and take it to that market. And you realize that was rather stupid and arrogant. Let's adapt ourselves to the market circumstance. So you need local talent and you need them to fall in love with the brand and then trust their expertise to then bring the brand to life, but also then execute it commercially. Because the commercial execution gets talked about a lot less. But it's the hard yards of how you build a business and winning grocery stocking points day in, day out, building those category stories so you can demonstrate that your rate of sale relative to others is how you go from a few Whole Foods to all Whole Foods to then into Target and now into Walmart as we are. And we've just got a kind of in out listing with Starbucks as well across, you know, an unbelievable number of Starbucks in the US So, but, but, but that's all locally led by local talent and attracting that talent is, is the key.

B (44:41)

I can imagine when Walmart came knocking, you had a bit of a dilemma because like in most cases we were saying earlier, when we take five or seven years to really establish a brand to be sustainable and you've got the biggest retailer in the US saying we want to launch you, what kind of dilemma does that pose for you?

A (44:56)

Yeah, I mean they came to us, clearly they were on our plan. But about two years later we're like, okay, we're not quite, let's prove it a bit more in kind of other retailers and grocers. They came to us and said, we really believe it. We've seen what you're doing in Europe. We want to back it and back it early and we believe we can. So is it going to work and can we execute it? You know, those, those two challenges were, were huge kind of considerations and it was a real month of are we going to do this? Are we ready? We just set up manufacturing in the U.S. and so again, but that's where I think the scale up then kicks in because that the entrepreneurial spirit of okay, come on, let's take the risk, let's go for it. And then everybody marshalling to make that happen, make sure we didn't screw it up and thank goodness we didn't screw it up. And the product's really working and selling well on in Walmart. But it was definitely a big, just I was only a year in and it's a Big Gulp moment of, okay, we're going to do this. But it's if you do Walmart and screw it up and you basically take the potential off the table for future years, that's not a good look. So it was, yeah, definitely a moment to think about. But we took the risk and we, you know, in the end this is a risk reward game and we, you know, believing in your team to be able to execute.

B (46:06)

Now, now, my American listeners will probably shout at me at this point, but, but I may be playing to a stereotype, but chocolate is not the same. And in fact, what I often find is whenever I'm struggling for chocolate fix America, I will find a Whole Foods just to buy a bar of Tony's and be paying something like $10 or $12 for it. So anyway, I'm part of your, your revenue out there, so you can thank me later. But anyway, but, but how you approach the American markets is very different, isn't it, in terms of like chocolate tastes and the taste profile is not the same as it is because in the uk, I kind of go, UK and Dutch markets are very similar. We've got similar brands and, you know, similar kind of chocolate culture for gifting and all those kind of things. But America' so how are you going to position it for the American owners?

A (46:47)

So we're already over $50 million of sales in the US which tells you it's working. And I think to be fair to some others like Lind, they have come before and they have educated, you know, probably east west coast palates to European chocolate. So I think there's more European flavors coming through. But yeah, Hershey was made, is made with soured milk. That was the traditional way you did it in the US So if you're a European, you taste it and you're like, what is this? But obviously if you're homegrown, that. But you know, and the market's so enormous that, you know, the scale of people that like our flavor is clearly big enough that you can build a, build a huge brand. And I think, I think flavor profiles are shifting in the US which plays to our advantage. And then we come in, you know, with just such a Different look and feel and perspective and all the rest of it. I think that's why we cut through so quickly in so many markets and I don't think the US is any different.

B (47:37)

Yeah. Now one of the conversations I'm often having with CMOs is how do you get a seat on the boardroom table? How do we get more CMOs to be kind of CEOs now you had a brief stint, didn't you as marketing director Innocent, which I love. What did you learn in that role and what prepared you?

A (47:53)

So? I was CMO for a year as a rite of passage to the CEO job and I learned a lot more than I thought because it was actually, it was the year of the transaction. We didn't have a lot of money to spend but we had Olympic, it was an Olympic year. So I got to have great fun on the, on the Olympic Park. But at the same time what I did was really understand the role that creativity and marketeers play in an organization and that it's not as simple as oh well you know, just show me the ROI and genuine creativity is incredibly hard. And so when I became CEO I was, I think I was enabled you to be a lot more respectful of the art of creativity, the art of understanding consumer and therefore not with my sort of more financy house I was show me the ROI show. I became much more of a long and the short of it fan and use the year to read that document and really digest what it meant. That says you've got to believe in marketing, you've got to believe in the investment pays back over the long term and particularly when you've got relatively small budgets trying to find did that thing work and did particularly in FMCG where it's disconnected, it's not a direct sale online. I think you've got to set a framework of how you judge creative work but not be too obsessed about the spreadsheet that shows that it worked or it didn't work.

B (49:13)

And looking at the Sierra because you're now in your second very major scale up as a CEO. What qualities make for a successful CEO of a scale up brand?

A (49:22)

I think like all the talent is finding the right blend between experience and, and as I said earlier on the willingness to do the work because you come into a business like Tony's. Yes, we're 200 million but we've got just 200, 250 people. So if you're coming in thinking oh you know, I'm used to limo land and you're going to be whisked around agencies. No, you know, you're right in the brief on how do we get some decent tracking and doing some of those things and finding someone that's got, in our case with Tony's and with Sadh, who's come into the chief brand role, not just a kind of European lens. I was looking for somebody with, you know, global experience, real good understanding of the us. The US is becoming the largest part of our business very quickly. And so really, as you say, how do you understand the US consumer not with just a European lens. How do you have someone that has got experience of fmcg? Because again, when we first went out with a brief, I had loads of like unbelievable high quality, but they were what I would call creative creatives and had not being in close to. This is how a product gets to shelf in a supermarket. So I think in FMCG you just need to understand the discipline. You're not just up in the clouds coming up with great advertising ideas. You've got to have the rhythm and discipline to execute through the supply chain and make sure you don't disappoint customers as well as the creativity to understand the consumer and put great propositions on top of that. So that blend of sort of more than European experience and yeah, FMCG and, and passion, you know, capability people, someone that was in love with the proposition that, yeah, you've got, you've gotta, if you come to a company like this, that. My difficulty is not attracting talent, it's picking the ones that really mean it when they say they want to work for an impact company, understand that and are prepared to do the work. And those are the ones I'm always looking for. And it's hard to filter when you've got a thousand applicants for every job.

B (51:11)

Yeah.

A (51:12)

That you do.

B (51:12)

What a problem to have.

A (51:13)

Yeah, it's, it's great. But it's. Yes, picking the right balance is really important, but we need experience. As you grow, you, you can't just go, well, none of us have ever done this before. So, you know, there's amazing great people in these big organizations picking the right ones that can gear change to, you know, we're going faster and you're doing the work is, is the skill, I think of bringing talent into a business like Tony's.

B (51:36)

Maybe round us off then. Let's talk culture. So, so how do you. Because culture can be easier when you're small because it's kind of, you know, the founders, the, you know, the people that are high, they're very close, aren't you. But as you scale, you see you've got 200, 250 people. Now culture then becomes more important, doesn't it? Because you can't be over everything. You've got to delegate responsibilities, you've got to work together. Things become more complex, different markets, different departments. Now how do you create a kind of right culture for the business?

A (52:05)

I think you rapidly remember that the board is not the department of fun. My job and the job of the senior team is to create the conditions for people just to come up with great ideas. And when you walk around this building in the same instant, why that stuff is happening is because they feel like they have permission to try things. And you know, they're all passionate about our mission, but they also are passionate about make you smile one of our values. And they feel like they have permission and resources to try some stuff around the office or put, you know, giving them a bit of money to have a club, a sailing club or a tennis club where then what you get is lots of different people from different departments who wouldn't maybe necessarily meet each other spending time together. You know, I pay half, they pay half. And all of a sudden you're creating these informal collaboration moments where people are getting to know each other across the business which then yields trust and yields benefit. And so it's, it's, yeah, creating the conditions with actually what is usually small amounts of cash but being really thoughtful about how you then say to them, you guys work out what, what fun looks like or what culture looks like, but from the top also then really living to a high standard. The values. So you know, values are incredibly important and making sure that the, the behaviors that really deviate from those are not tolerated. You, you don't ever not show those and also when they're, when you're seeing them, you don't tolerate them and you're quite tough on that. And so the kind of makes you smile. Edge also has a bit of a, if you're off from the values of this business, however good you are, you're not going to last long. And if you get the culture really right, I don't have to deal with those issues. People are self regulating people out, you know, it's happening within teams and that's what we had at Innocent and that's definitely what I see we have here as well.

B (53:50)

Yeah, good challenge brands always seem to have like really clearly defined values that kind of live and breathe. What examples of some of the values that Tony's has and how, how do they come to life?

A (53:59)

Yeah, so we've, we've talked about makes you smile a bit and, and how that comes to life. We also have a value that is outspoken and you know, again, in the brand about raising awareness of, of those issues. You, you also have to. You make sure that that outspoken value doesn't get misused because people just say what they like. So it's outspoken in pursuit of the mission, not outspoken just for the sake of it. And so again, putting tension into values is really important. So, you know, with entrepreneurial, you know, yes, you want to drive entrepreneurial spirit, but there's got to be a commercial edge to it. You've got to not just do a thousand things, you've got to do the two or three things that really also deliver commercial value. And so I think what I find with values is really defining the behaviors and the regulators that sit below values is also important because otherwise people see the headline word and they interpret what they want from that. And sometimes that could be dangerous. So what we do, and again, we did, we worked hard at Innocent, is say, here's the value, here's the behaviors that kind of match against that, which is, yeah, you know, be bold with how you say things, but also be respectful in terms of the context that you're doing it and all the rest of it. So getting those things right is never always. It's never about the headline word in itself. It's about, okay, but what behaviors are you expecting from that and coaching and teaching those through the business?

B (55:15)

Yeah, I mean, being outspoken, being entrepreneurial, probably ones I would have expected makes you smile. I had expected, actually. But it's how we feel about where we work is really important, isn't it? And if work can make you happy and make others happy, that leads to good outcomes.

A (55:29)

I think brands like this work because people want to be here. We're making them work incredibly hard. They've all come from kind of big jobs elsewhere or whatever it may be. If they're not feeling the great advantage I think we had at Innocent and here is that people can bring themselves to work. There's no bullshit, there's no politics. There's a sense of we're in this together, and I can be a human being in this company and do great work and make a great contribution to kind of a wider mission that we're all on. And that's where the power is. And I always talk about as do I feel like I bring myself to work. I'm not trying to pretend to be something else to fit in. For me, that's the definition of kind of successful culture is when the vast majority of people are saying, yeah, I really feel I can bring myself to work, which then also brings in diversity and inclusion as well, because it's not about a certain type of person feeling like they can bring themselves to work. All your employee base feels like that, and that's something that we work hard on.

B (56:27)

Douglas, thank you very much. It's been great. It's a real delight for me to talk about Tony's having been a fan of the brand and to hear you tell the story about the journey you've been on and where it's going next. And good luck. I hope to see lots more everywhere I travel and lots more on shelf. So well done and keep up the good work.

A (56:46)

Me too. Thank you. Thank you.

B (56:47)

Thank you very much for listening or watching Uncensored cmo. I hope you enjoyed that. If you did, please do hit the subscribe button wherever you get your podcast. If you're watching, hit subscribe there as well. I'd also love to get a review. Reviews make a big difference on other people discovering the show, so please do leave a review wherever you get your podcast. If you want to contact me, you can do I'm over on X at Uncensored CMO or on LinkedIn where I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time.