New year, new strategy. The distinctive Fentimans brand of botanically brewed drinks may have its ‘roots’ in 1905 if you’ll pardon the pun. But the business drive behind it should definitely make 2015 its vintage year, given the firm’s enviable 29% growth rate currently, the negotiations going on to quench thirsts in China and India, and plans to start a third manufacturing operation in Germany.
Already into 51 countries after 20 years of mass production, Fentimans presently has Japan and New Zealand as its markets furthest flung from home town Hexham, where the workforce has risen to 34 and a local relocation from its Battle Hill birthplace to somewhere larger is increasingly pressing.
His may still be a small business by trade definitions. But founder Eldon Robson, tanned, slim and looking fitter than ever in his early 60s, is not deterred in his plans. "In India we know where we should be looking but things ground to a halt recently with the elections there. India is a definite opportunity but import duty there is very high so we’ll have to do what we do in the USA. We’ll have to manufacture over there but first find a suitable partner – easier said than done."
Japan, though, has already been a customer for 10 years. Forays into New Zealand began by sending out Fentimans drinks for Christmas hampers. "But now we’re dealing with the biggest distributor of spirits in New Zealand," Robson reports. "We’re reference checking at the moment and once that’s over we’ll be sending a lot more stuff out there."
Labelling for New Zealand should be fairly straightforward though progress into China may put a strain on the resources employing five languages now. And logistical nightmare though Robson admits labelling is, there’s no reason to believe the challenge will not be met successfully.
Exports account for 30% of product. Belgium, Austria and Switzerland are big foreign markets, but Spain’s is the biggest collectively. There the company does an own range of tonic waters for a company in the south of the country, and has a distributor in Barcelona.
A BQ spot check with retailers at the Northumbrian outlets of Belsay Hall and Kirkharle, and at Raitt hamlet in Perthshire, confirmed Fentimans drinks continue to go down well in this country too. "Our UK level of business may look high on a graph," Robson elaborates. "But if you add up all the lesser spikes elsewhere, the little bumps when they start to grow the sum will be bigger. So exports to us are very important. "Britishness is something people underestimate here. The world respects British goods very strongly and we ought to take more pride in what we do. Fentimans has a reputation for quality and integrity, things I regard as absolutely crucial when I develop a new product.
"I always try to get a product right first and worry about the cost afterwards, because when you’re a small company guarding the integrity of your brand is absolutely vital. Big manufacturers may come in, look at ingredients then buy something of inferior quality. I could name a brand that did that but I don’t want to get into trouble.
"You wouldn’t believe the due diligence we go through in producing our own flavours and that sort of thing – where we source our raw materials, the date on these things and where they were processed and all that stuff. As a natural product, every now and again something will come up out of the blue and throw a spanner in the works so you need absolute control over these sorts of things."
Robson has long believed in the value of premiumisation in food and drink, and the 29% growth today bears it out. "We didn’t seem to suffer during the recession," he says. "When I first kicked the business off it was very difficult to make people understand why they should pay such a lot of money for a bottle of ginger beer.
"But premiumisation has been to the fore in food and drink for quite a while now. A lot of mass produced brands lack quality, whereas people are prepared now to pay more for something that’s decent. That may sound a bit odd coming from an old fashioned company but we’re actually ahead of the game."
The sediment in the bottom of a bottle of Fentimans ginger beer, for example, is pure Chinese ginger. Robson would never claim to be a modern day medicine man. But he does point out: "Ginger’s very good for all sorts of things we’re not allowed to advertise on the label."
Customer feedback over the years, however, suggests Fentimans ginger beer is good for bronchial problems and for sickness and nausea brought on by pregnancy and treatment by chemo- and radiotherapy. "My stuff is pure and natural," he stresses, "and without making any false claims it certainly helps certain conditions."
So to the new strategy, centred on five or six existing mixers. Within five or six years they may overtake the core product, Robson believes, because of the international nature of the mixer market. "Wherever gin, brandy and whisky go mixers go," he points out.
"We’re one of the few companies making premium mixers, and in export markets
they fit in."
So the big job awaiting a newly appointed marketing head is to devise a mixer strategy. "We’re going to put a big plan around that, doing showcase events and that sort of thing – bringing it to the fore with buyers and consumers," Robson says enthusiastically.
In addition, products in the making during 2014 have included an elderflower drink.
"The process has taken quite a long time," Robson admits. "That’s because the elderflowers have to be picked. Our unique selling point is that we use wild English elderflowers, and the window for picking them is the end of May into June.
"Within 24 hours of picking them you must process them. We turn them into a sugar syrup we then store in packs so it’s there to be used when we do the finished product. The ones we don’t use we freeze for use at a later date. Whereas 2014 was a bit of a learning curve for that, this year we’ll be going at it full tilt.
"We didn’t want to go berserk at first. It’s a process we’re trying to adjust to, and the people we are using – a company in Hereford is processing the flowers for us – has limited capacity. Now we definitely know what we’re doing and will definitely expand that a lot."
And the other new products? "We launched a new mixer in July, a 1905 purple tonic. We’ve also another tonic water we’re developing – not quite there with it yet, but it’s at late stages of development."
You might think that with all these openings it would be opportune to engage with venture capital. But Robson’s longstanding apathy to such a liaison continues. "Steering clear of venture capital is a personal thing for me," he admits. "Some people probably have to resort to it. We didn’t have much money for our start-up, to be honest.
"But we did get a £40,000 loan from HSBC in 1996. We’d been going for a while and wanted to expand. The loan came through the government backed loan scheme for small firms. I had to pay it back within three years which I did, so that was a good cushion. Apart from that there haven’t been any borrowings other than a bank overdraft and that sort of thing. "Someone who worked for me some years ago wanted to bring in a venture capital company but I said we’d expand at our own rate. You have control that way and are less likely to make any mistakes. At the end of the day you never know how far you’re going to go with something.
If you give away equity when you’re struggling early on, the equity turns into an awful lot of money later as you do get cracking. It’s just a personal thing."
Robson doesn’t talk turnover but he does talk cases. "Whereas in the first year of business the company turned over 20,000 cases," he recalls, "now from what it turns over from the UK base, and from what Fentimans North America produces, we’re a 2.5m case brand. That sounds good. But it has taken 20 years to get there and we haven’t finished yet.
"Setting up in America was quite a struggle, to be honest. We invested quite a bit to do it. While it’s not a huge part of the business it’s still growing, and at least you don’t have all your eggs in one basket."
As for the German project: "We’ve sent terms of agreement across to quite a substantial brewing company there and nothing negative has come back. It will be quite a coup if this comes off. We may end up manufacturing there sometime this year."
In the UK Fentimans works through two breweries now: Robinsons Brewery at Stockport, its original manufacturer, and Thomas Hardy at Burtonwood and Kendal. "And of course," he adds impishly, "we manufacture also in Pennsylvania – based where the Amish are. I don’t think they drink my stuff. They don’t like to sup with the devil."
But, judging from those cases being sold increasingly, a lot of us still do.
Watch the BQ Magazine interview with Eldon Robson here: