Posted: Wed 8th Jul 2020
For today's Lunch and Learn, Rejuvenation Water founder Kris Ingham joined Enterprise Nation's Emma Jones to talk about growing a successful food and drink brand.
Kris launched Rejuvenation Water in 2016, after coming up with the idea almost a decade before. He's landed listings in supermarkets like Tesco, Sainsbury's, Waitrose and Ocado, and recently raised over £95,000 in funding.
Kris first thought of the idea for Rejuvenation Water in 2007. He was at university and had an active lifestyle, so wanted to find supplements that would aid exercise recovery.
He did a lot of research and found amino acids kept coming up. They were great for the immune system, cognitive health and digestion, and helped the body to recover after exercise. However, there wasn't a suitable product on the health food market.
"Back then, vitamins were really coming through. But when you started looking at vitamin-based food and drinks there was so much sugar in there - most of your daily intake. I thought, why are consumers having the wool pulled over their eyes with vitamin waters that have so much sugar in them? I wanted to look at genuine health," Kris said.
Despite the clear opportunity, Kris recalls how difficult it was to start a business and enter the market as a newcomer.
"There wasn't a business support ecosystem like Enterprise Nation in 2007. There was a disconnect from the entrepreneurs in the media back then: it was all people like Richard Branson and Stelios [Haji-Ioannou, founder of EasyJet]. Now you've got social media, it lends more to innovation. There's a support network in place."
Kris worked in banking from 2007 to 2015. It was a cancer scare that ultimately pushed him to start his own business.
"I think I was always looking for reasons not to do it. It took a cancer scare to readjust my perspective and actually go and do it. I was sitting with people who had terminal cancer and I thought, what have I actually achieved? I had all these aspirations and I'd never done any of them.
"I thought, if I come out of this unscathed, I'm going to do something. Within a few weeks, I'd incorporated the company," Kris said.
The most important thing is to move out of your comfort zone. If you haven't got a background in the industry or relevant contacts, you have to put yourself out there.
Kris remembers finding a lot of local business networks and events through Eventbrite in the early days of the business. He also spent time looking for a co-founder.
"Everyone else had a co-founder, so I thought, I'm going to recruit one. Then someone approached me and told me I needed a non-executive director instead - someone to open a few doors and push me in the right direction. They offered to do it for a small amount of equity and, hey presto, it was what I needed."
Kris explained that it's important to acknowledge that you don't know everything. If you're a solo founder, don't be afraid to ask questions. You need to surround yourself with people who can help you answer those questions.
Kris did a soft launch of Rejuvenation Water at a trade show and met some buyers there. However, he emphasises that it's a long process.
"Buyers want to see traction. They don't want to be the first ones to launch your product, because they risk having empty shelves if you don't have your supply chain worked out or can't keep up with the stock," Kris said.
Rejuvenation Water's first major listing was in John Lewis in Oxford Circus. Kris had spoken to the buyer in 2016 and won the listing in 2017. He met Waitrose buyers three times and Tesco buyers four. It's a testament to how long the process can take.
"The problem is that buyers change regularly. You can have a conversation for a year, then the buyers will change and you have to start over. It's a case of perseverance. I've annoyed the hell out of every buyer I've dealt with, but you can't take no for an answer."
One of the biggest disadvantages for food and drink businesses is that the product needs to be created so far in advance, but you only get paid when it's sold. Kris describes it as a "cash flow mismatch".
"For me, gross margin is one of the most essential things. Time and time again, I've seen businesses working on a 15-20% margin. For me, you should be targeting a 50% margin. It's sustainable and allows you to invest back into the business. If you're not making 40 to 50% margin on your sales, you don't have a sustainable business," Kris explained.
Coronavirus has had a huge impact on consumer buying habits. People are doubling down on the big brands they trust and buying in bulk. As Kris puts it, it's a return to the 1996 mentality.
"People are looking to fill their pantry for the next two weeks. It's at odds with the millennial and Gen Z habit of going to Tesco Express five times a week. The new buying habits don't allow for browsing - there's a queue outside and people have a strict shopping list of toilet rolls and rice. Innovation is being left out in this situation," he said.
However, Kris believes that health will be a big trend in the post-Covid world. People will start focusing more on their personal circumstances: how can I give myself the best chance of surviving a second wave? How can my immune system be the best it can be?
Although people aren't browsing as much in supermarkets, they're spending more time looking for products online. There's a huge opportunity in ecommerce at the moment.
"Supermarkets are volatile: buyers change and you could be out after three months. With online sales, you're building something you have control over and going direct to consumers. I can use different ads and messaging and find out why people buy Rejuvenation Water. I'm building a community rather than spending 18 months chasing supermarkets," Kris said.
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