Episode 8 - Vimto - the secret recipe behind the brand's global success
| by Emma Pownall
In this show, I'm delighted to be speaking to a woman at the top of a FTSE 250 company, and like Datel, a champion of businesses in the North of England too. If you've never heard of Marnie Millard or Nichols PLC, the company that she heads up, you'll definitely have heard of Vimto, just one of the world class brands that Nichols produces. Marnie has worked in the ultra competitive beverage industry all her life, and is one of the few serving female FTSE 250 CEOs.
In this show, we discuss:
The culture at Nichols Plc, and how the drinks manufacturer builds leaders from within the organisation.
How far we’ve come, and how far there is to go in representing a balance of both men and women in the manufacturing and distribution sector.
Top advice for business leaders – from one experienced CEO to another
Nichols is best known for Vimto, and I wanted to start off by hearing about the company's background.
We're over 110 years old now, we were established in 1908 here in Manchester in Salford, specifically. Our non exec Chairman, John Nichols is the grandson of the founder, and John's two sons work with me in the business as well. So whilst we're a PLC, we really pride ourselves on having a real family feel as well. The recipe is still a secret, the same secret that John Noel Nichols invented in his bedroom in 1908. So there's only five individuals in the company who know that recipe. I don't so you can't kidnap me and put me up for ransom. But, you know, we pride ourselves on that IP. And wherever you go in the world, the taste of the product will be the same. Things such as sugar content change, different colours, etc, depending on the rules and regulations in the country. But in essence, the Vimto taste is the same all around the world. We're based on AIM, which is the Alternative Investment Market, and we're one of the 10 largest companies, our name so we have a lot of stakeholders from the institutions but as I said before the family still own over 30% of the company. And that's very important to us and really creates the values and the ethos of what we are as an organisation.
Though Vimto is a brand that a lot of people love, I was keen to hear more about other aspects of the business.
Yeah, in essence from a brand perspective, Vimto still is 95% of our value brands. Within that we have Levi Roots, Sunkist and StarSlush in our frozen. I guess the more important element of the make up of the business is the diversity of the organisation and we have what we term as three distinct routes to market. So we have the UK package division, which is very much Vimto in bottles which might be cordial ready to drink or fizzy that you will find in Tesco, Sainsbury's, Asda. There are lots of other supermarkets available obviously. We then have our out of home route to market, installing equipment into the independent on trade, and dispensing soft drinks. That still exists today, but within that portfolio, we now represent Coca Cola, we represent Pepsi, Iron Bru in Scotland even though they're a competitor, very friendly competitor, and then things like Ocean Spray. Out of home though we have a very large growing part of our business. So we also have our frozen business, and we have an aim to be the number one frozen soft drinks company in the UK, and I think it's fair to say we're there. Two years ago, we signed a long term licencing agreement with ICEE, which is the largest carbonated, frozen beverage in the US, and we secured all Cineworld cinemas. And we had a massive installation during 2019, installing 120 cinemas with ICEE carbonated slush, and we've just won Showcase so that's happened. And then international international is where we ostensibly ship concentrate to a bottling partner, or we ship finished goods so cans that we have produced in Spain or Portugal primarily for the African market. So our two large international markets are Africa and the Middle East, which have been long standing export markets for us for over 90 odd years. So very, very well established partners within our trading relationships.
Culture is really important to the business, so I asked Marnie what it's like to work at Nichols.
I think it's really important to go to the brand where our strapline is to be refreshingly different. Our purpose is to make life taste better. And I think when you roll that up into what that means to people, it's about having a value and a culture that is really suitable to those elements. We've always had a can do culture, we have passionate individuals. I think when you're a one site operation as we were when I joined in 2012, with around about 50 people, I think it's okay to keep that reasonably informal because you can actually go and touch everybody within the organisation. So as a leadership team, you can walk the talk, you can really deliver your values and your culture in person. We're now sitting at 380 people. We've got a Depo in Sterling, we've got a Depo in Swindon, we've got a factory in Ross-on-Wye where there's about 60 people there, and numerous people out in the field. The numbers at Laurel House haven't changed that much, but we've become a much bigger organisation. And a lot of those people have come through the acquisitions that we've made. So intrinsically, they come with different values and cultures, although what I would say is, in my limited experience on acquisitions, that culture and people fit right at the beginning, is really essential to get an acquisition over the line. It's still people that really matter. And it's people that make things happen. But what we decided to do as the business was growing, was really start to cement what the values meant. I've got a view, senior leadership have got a view, but what really matters is what all of our colleagues really, really think. So we gave it to a cross-functional team to say, please come with the values and what those values really mean, give me a feel for what would bring a value to life. So what would delivering 'wow' mean? And they came up with a set of values which are very, very personal to Vimto and quite quirky. And if you put them up against probably a blue chip fmcg branded business, they probably would look quite peculiar because one of them is delivering 'wow'.
Another one is be brave, be passionate and make a difference. So it's all about empowering people through the values to do the right thing. And I think, as a CEO, one of the things that really makes me proud is I can see those values being lived and worked at all of the time. It really makes me proud when visitors come through the door and you know, see all the vintage adverts around the business, get a feel for it, but what they always talk to me is about the feel of the people, the atmosphere. And it's really interesting, even though we've grown so enormously, I still try as much as I can to see absolutely every new joiner at the end of their induction. It happens less and less because we recruited a new Talent and Training Manager, she's come from Asda, and she's really, really brilliant in her space. And through the recruitment process, what Gab's been able to do is actually interview with the values in mind. So we're not just testing the technical capability, or is the experience appropriate, we're also seeing what their cultural fit would be. Because historically on that induction process, if I've met somebody, and I never tell the hiring manager, I just keep it to myself, I can always tell the individual who might not get through their probation period, and it's always down to, they haven't got our culture, and they just can't fit in. But as I say, that just happens less and less because Gab realised this and therefore, during the recruitment process, we're testing for that cultural fit, which is really important.
I think one of the things that's been really interesting in my tenure at Vimto is the real desire to balance work, family and home. And where we're based is right on the M6 on the infamous Haydock roundabout, and it gets really, really busy. We actually looked to move the office around five years ago before we bought Laurel House. And it wasn't the right thing to do because when we mapped everybody's postcode out, we were actually geographically centric to all of our colleagues. I have the longest commute so unfortunately, my vote didn't count on this one otherwise we'd have been over in Huddersfield. But joking apart, what we could see is this isn't just about working mums and dad, this is about a new generation, a new workforce wanting more out of their life and their working life and their personal life. So what we were seeing is that the traffic build up, you know, particularly mums and dads when they were dropping their children off, or it was getting near to pick up time getting really stressed out getting really angsty. So what we did is we brought in flexible worker, you don't accrue hours, you can come between 8 and 10, and go between four and six. We just trust everybody to manage their own time. But I walk the talk on that, because I've got the longest commute. I'm a real early bird. So normally in the office about 4ish, you'll see me disappear, which is to demonstrate to everybody it's okay to do that. But I guess that's bringing the culture and the values to life at a leadership level.
Because it's all very well sort of having great things around the office and I see evidence of people living the values, but you have to give things back you have to facilitate that environment and really help bring it to life. And that's just a small example. We do a lot of home working now. People can work in hubs. We don't monitor anybody's time anybody's attendance other than for the fire register. And what we find is we get back so much more than we're giving. And that's from young talent as well. You know, we're a big marketing organisation. And if you want the best talent in your industry, then you've got to make sure you're a great place to work. And I think that's really where the values come into play. What is the value of values to an organisation? Well, it's about retaining and getting the best talent you can.
This is a brilliant way of looking at decision making, and it sounds like in just that one example, the business gets back bucket loads from its employees.
And as you know, I'm getting into my late 50s. So I come from a style of working that was, you know, 8 until 6, you know I had to look after my children in a completely different way. And and you know what I'm empowered now to do things differently. And I think you know, you've got responsibility to make the place that you work in the best that you can that's within our gift and seems a bit of a no brainer to me. But like you say, there are a lot of companies that find it very, very difficult to embrace change, particularly people change, which leads you on to say things around balanced workforces, gender balance in boardrooms, there's still a lot of work to be done in that space, because I see a lot of resistance to change from senior leaders, particularly in sectors such as professional services, for example. So it shouldn't be any surprise that it's taking probably longer than we all would like to improve on some of those metrics that we need to be better at.
Nichols have a really strong focus on building leaders from within the organisation, and I wondered how this is managed.
Well, last year so in 2019, we had 22 promotions within the organisation which, you know, we're really proud of, but you have to work at these areas. So we brought a new People Director in a couple of years ago, Chris joined us from PZ Cussons, Chris has really helped us crystallise the importance of individuals having their own personal development plan and owning it. And getting through the barrier of my personal development is around training courses, as opposed to what can I learn laterally within our business? And the challenge we have as many organisations do now is we have a flat management structure. I don't see that changing in the short term. But with those three routes to market that I talked about earlier, so our international business, our UK packaged, and our out of home, there's the opportunity for people to translate their skills totally across the organisation. So just because you came in, say for example, as a national account manager, looking after Asda, there is nothing stopping you then becoming a regional manager, looking after part of Africa, for example. Equally, our UK Commercial Director Marcella has just moved over to become our Ops Director. So she's looking after supply chain now.
So we're really not only developing our talent internally, we're making those moves happen from the top to the bottom, but it is about people's openness to their personal development and instead of going vertically upwards about lateral experience, and hopefully, even if they don't achieve the role that they would like in Nichols, when they go out in to the big wide world for their next role, they go out far better equipped. And we see that as success, you're not going to keep everybody in a small organisation, you can't satisfy everybody's aspirations and expectations. So again, coming back to the gender split, you know, if we create a senior national account manager in our business that can go and become a sales director in another business, and that happens to be a female, then for me, that's just as good as them progressing in our own company. So we work really hard in this space. Again, you've got to lead from the front, you know, when it comes down to DNI, it's got to be a way of life. It's got to be built into everything you do. We've still got a long way to go in that space, but we're making progress and I think it really has to be something that's embedded in your organisation and your culture
Moving on to talking more about women in manufacturing and distribution, I wondered how life has changed for women at the top their career today.
I always find this question really hard to answer because I have to answer it truthfully. We had probably in fairness, it was about three years ago, we were invited to a dinner by Booker. They were celebrating the acquisition of Makro very much in the wholesale space. So I guess still quite traditional relationships let's say compared to dealing with a Tesco or Asda of today. And I jokingly said to my CFO, I'll bet I'll be on the top table, you know, there'll be, you know, a few of our competitors dotted around. So he said, well, will you be on the top table? Because, you know, we're a great supplier to Booker and we are a great supplier to Booker but no, I knew it would be because there will be very few females and in that particular environment, I would say probably attendees are about 300. If there were fifteen women that was it, max. And there's still that big proportion of any audience I go to is still at a senior level, still very male dominated. And that's just a factor. You know, I wish I could say, I've seen a massive difference in the last decade. It's better, but I wouldn't say it's still at senior levels, you know, represents a balanced proportion of male and female.
And I think that comes back to the earlier point we were discussing around talent as leaders. It is up to us to ensure that our talent that is coming through our organisations is balanced, because it's not rocket science. If it's not balanced at a mid tier management level, then there's no way you're going to have choices in order to develop the talent going through to the executive level. And do you know what, until we get to the point where we have an invention that the men have the babies, that is just a fact of life. So as organisations, you know, we have to take that into account. And we have to work with that. And I'm always really proud when one of my guys uses our flexi time to either come in late or go home early, because what that tells me is that his partner is working late and has the facility. So it's not just about Nick leaving early, it's about his wife, being able to have a career as demanding as Nick's. They balance the children out together, but they own that caring relationship. And therefore it's not just about have flexible time for working mums, it's about flexible working time for working parents and actually encouraging the dads to do their bit as well as the mums but I think it's just going to take time. You know, when I talk to my daughter who is 25 about walking into a room and there's still more blokes than there are women you know, she looks at me gone out, you know, she doesn't see that discrepancy in her world. So I do think generationally, it will accelerate. And once we get some of those people who are less open to change, moving out of some of those top spots, then I think we will start to see an acceleration. I just think we're just in a difficult space at the moment.
For other leaders who are listening to this, I asked Marnie what her advice would be to bring that top down culture that she brought into Nichols, into their organisation.
As a CEO and a leader, you have to drive it you have to be determined, there are certain things that you have to set your stall out that you are non negotiable about. So no way would my team walk into a talent mapping session with me and not already thought about the question Marnie is going to ask. First and foremost, before we go into any of the DNI, is the gender split balanced to start off with? And if it's not, what are we going to do to put that right? Because you can't just fill it by recruiting. It's got to come from the bottom up. Because we've just had a really good example, recruiting a new CFO, really wanted a balanced slate at shortlist stage, used a recruitment company who actually recruited me to Nichols so that was a good enough testimony. You know, they're really, really strong in this space. And we really, really struggled to get a balanced slate at CFO level, and we've moved the criteria around and in the end, I had to step back from that, because that wasn't doing the right thing for the business and the organisation so you still have to come back to the right person for the role. Particularly in a PLC, particularly when you're recruiting a CFO, but it really, really disappointed me.
It is quite uncommon for CEOs to stay in one sector their whole careers like Marnie, so I asked if there is a particular reason she stayed in the one industry.
Soft drinks is a really exciting category. You know, if you stand back and look in, you know, you've got some really massive global brands. So you know, we sit aside Coca Cola, Pepsi, Orangina, Fanta, and anywhere we go in the world, that's our competitor set. So you might think that's a little bit daunting, and it is at times, but essentially, it means the category is always innovating. It's really fast moving. And it also means when you've got big global giants like that, there's a real opportunity for disrupter brands to come in and muck it all up, which is what we tend to do, globally. I find it fascinating that three guys can develop a little range of smoothies, go off to Notting Hill Carnival, sell them, do a bit of a questionnaire - do you think this is a good idea? And something like 12 years later sell it for millions and millions to the Coke company. And through my career, I guess it hasn't always been working on a brand.
My first sort of jaunt into soft drinks was after I'd had the children and I joined a soft drinks business in Lancashire. And we were manufacturing own label soft drinks. So our largest customers were Tesco, Asda, and Morrisons. And lots of people think if you're producing on behalf of the retailers, you're like the poor relation. You're absolutely not. When you're an own label supplier to the large supermarkets, you're right in the heart of your business. It's a very privileged place to be. They share all of their strategic plans with you, your innovation plans and then you have a responsibility as a supplier to translate those holistic plans into, well I'm going to develop in our case, for example, Tesco's flavoured water, and that went from zero to a £40 million piece of business with Tesco, sort of in two or three years. And a brand has never come in to own that space, even though you've got Volvic, Perrier, and all sorts of different smaller brands in flavoured waters, still the largest sector of the market is private label flavoured waters. So I learned my craft there. I loved being part of the category teams. I learned such a lot working on supply chain projects with Tesco, for example, where we bought a completely new way of merchandise in soft drinks into play, that transformed the sector. And we were ahead of the brands the brands actually had to follow us. So that's where I learned my craft.
And then you know, I've worked for different own label suppliers. I actually ran a factory for five years up in the North East, my background is commercial as you can probably tell, I love nothing more than seeing the products we've developed land on the shelf. Even though I'm not technically educated or trained, I have a deep interest in how things are made. I love factories, have to say running the factory in the North East, is the hardest thing I have ever done in my career. And I think it's really interesting when you look at what's my next step going to be and you're looking at your CV and you think, well, I was commercial director, I was sales and marketing director, so by definition, I want to be a managing director. And then you take on that next step with everything that it encompasses. And in my case, running a factory that had significant challenges that I didn't totally understand when I took the role on, but I found out very quickly, and therefore had to set around learning well, what does preventative maintenance mean? How do I install a 20 million capex project for a new water treatment plant? How do I deal with Unite who have got 200 people working on a site who haven't had a pay rise for five years, they're now under new ownership, they're very suspicious. Nobody's cared about their training, the facilities where they leave their clothes, and they get showered at the end of a shift and just not fit for purpose. And working with Innocent so I had five production lines, producing innocent smoothies for kids, so that's where my love for innocent and their business came from. So you know, to answer your question, I've done lots of different things in the sector. I love it that it's fast moving.
We have lots of legislative issues. So we have the soft drinks industry levy that came into play in 2018. And that was huge for the industry. From 2012, we had a really clear plan at Vimto for reducing sugar. We didn't do any product development, other than no added sugar products. And all our above the line or our social media campaigns were all in the no added sugar space. So when the soft drinks levy came in for us it was business as usual, we had no impact. But many many brands had lots of hiccups that are well documented in the press. And now we've got the deposit return scheme, which is about creating a closed loop recycling system in the UK, which is badly needed for single use plastics. It is not the demon of the packaging world, there is a perfectly great solution out there. You know, we just need some support from the government and unlike the soft drinks industry levy, the whole soft drinks manufacturing world is behind this move to create a deposit return scheme, so we've got access to lots of reusable plastic in the future. So there's always something happening. It's exciting. It's leading edge. And it just continues to inspire me. So never say never. But it's going to have to be something special to entice me away from the world of soft drinks.
That love and passion really comes through when Marnie talks about the industry and Nichols as a business. I wondered what advice Marnie would offer to other business leaders today.
I think it's sometimes really, really important to know what you don't want to do next, as much as what you do want to do. And I say that to my children, and any young people I'm working with, so if you have the opportunity to do some work experience within a business so let's say you've wanted to be a lawyer for ever and ever, you know, having that opportunity to do some real work experience within a legal firm. If you decide that's not for you, that's really good because you've made a call about what you don't want to do as much as what you do want to do. I think what I've found, particularly in this last role as CEO, it's really important for me to do the right thing. And that doesn't always mean it's the easiest thing to do. And I think you need to be true to yourself.
I think people issues are still the one area that keeps me awake at night. As you're growing as an organisation, as you're changing. Inevitably, there will be individuals along the way, that that pace of change is just not for them, or they don't have the experience to draw on, or they simply get to a point in a role where that's as much as they might want to do so when you're making those changes, they're hard to do, but you must do them for everybody else and moving the organisation through. And again when I'm talking particularly to groups of lady business leaders or I'm talking to young people, at the end of the day, there'll be a point in your career when you need to be brave. And I've had a couple of those - didn't realise I was being brave until in latter years I've reflected as I've shared my story, which I think is really interesting at the time, I was just getting on with it, but I realise now, I really did have to steer myself to be brave. I think you've got to be determined. So I think when you're working in a growing business, and you know, you devise your strategy, never be afraid to change, but you've got to be determined to see things through and then always learn.
So recently, I took on a non exec role at Finsbury Food, which is a bakery and cake and morning goods business. I'm a non exec director there. So that's really interesting. I learned a lot to bring back to my business. And then I sit on the BSDA the British Soft Drinks Association board, I chaired the CBI for the North West which was a very different role to my day job. And then more recently, I now chair the board at UA92, which is a new university project for Greater Manchester about improving social mobility for higher education. I don't know a lot about higher education and governance, but I'm learning and I think as an individual that really fuels your own personal development and having exposure to different situations, different people, there's a value you take that back to your own organisation. So those sort of three things, be brave, be determined and keep learning are sort of the pillars that I keep in my head. So I keep interested and I keep developing.
When experience growth like Nichols have, I wanted to know how Nichols keeps the values and the communication up.
Yeah, it's tough. And we've been having some real growing pains in the last 12 to 18 months because the numbers accelerated with a couple of acquisitions where we had circa 45 people coming in at a time. So we really have worked hard at maintaining our quarterly briefs. So that's not about me standing a part of the leadership team. That's people within our organisation, talking about their roles, talking about projects they've been working on and really bringing those to life for our colleagues. Historically, they've been Laurel House centric, up here in the North West, but we now make sure we go out on a roadshow, so we'll go down to the factory in Ross, not necessarily the whole team, but a cluster of the leadership team will go off to Ross, we'll then do it at Swindon, and we'll do it up in in Sterling in Scotland, which is okay, but that's periodically through the year. So how do we keep talking to each other throughout the year.
We had a new IT director join us earlier on in 2019, coupled with my experience at Finsbury, which is a devolved model, so they have no head office, we have six or seven factories with 2000 people in the organisation so even more decentral than Nichols. And they launched Facebook Workplace. And that is basically the Facebook platform for work. And we launched that at our kickoff conference in January. And because it's a platform that people are familiar with, clearly, we don't want to see what they're doing on a Saturday night, any misbehaving antics down at the pub, but because it's a platform that they're used to, we're now using that as a communication tool to keep us all connected and it's brilliant. You can do podcasts on it, you can do video interviews, we can put announcements on there. And basically everybody has a tablet, you know whether you're out in the field or you're at Ross you have access to, we've got it going on in the factory so people can see things as being posted. So we're really hopeful that that's going to be a key tool that we can use to keep that going.
We do an engagement survey every other year. And as a senior leadership team, we take that extremely seriously. Our scores are really good, which you can say, oh, pat on the back, that's actually harder than if you've got poor scores, because then you can just work upwards, where if we're really working hard at some of our measures so for example, 95% say I want to be working at Vimto in 12 months time and you know, 90% plus, I can see the leadership team walking the talk and demonstrating the values. But you're right as the business gets larger, we have to ensure that the way in which we communicate is appropriate to a team leader working on the production line at Ross versus a senior national account manager out on the road going to Asda head office and getting that tone right and making sure that the messaging is appropriate is not easy. But again, it comes down to these things really matter. So as a CEO, I mean, I don't really do anything anymore, you know, I swan around chatting to everybody, but it's the people agenda. You know, it's our sustainability agenda. These are the things that are at the forefront of my mind that I'm able to concentrate on and really galvanise. So we work hard at that.
And out of the engagement survey, we take focus groups, so we then take it from a group level, we then go down into a functional level, and then within that functional level, the appropriate people business partner works with that function to say, right, how are we going to improve on this because it's not necessarily at that stage, everything coming from the leadership team, it's how are we going to work together to make things better. And that's where the real value of the employment engagement survey comes out of is then we can work on that and what might be right for Ross-on-Why might not be right for Swindon, might not be right for Sterling, may not even be right for the IT team versus the supply chain team at Laurel House. And it's important you complete and finish these things. It's very easy to get wrapped up in the results come back, you do a big fanfare at the company conference, and then it all fizzles out. My job with the people director job is to keep the momentum going to make sure that those areas are looked at because one of the measures I'm particularly keen on is the measure. Do you think something is going to happen out of this survey, and we need a good score on that because once we get a good score on that we know we can action any concerns that our colleagues have, you have to work at it, it doesn't happen naturally.
It sounds like Marnie’s employees feel very valued and listened to, which comes back to the culture of the business.
I would hope so. I would take that really personally, if they didn't feel we were doing the survey for all the right reasons, and we were going to action on it. You can't always action on everything, so what we do feedback is we tend to take the key three big themes at a group level. And as I say, we'll cascade the more relevant functional points down to the other teams. But at a group level, we'll concentrate on three themes and then work hard to make those happen. Then you'll get something else to work on in the next survey and so the whole process keeps going.
It seems as though Nichols have quite an unconventional supply chain model, and I was keen to know more.
So within the UK portfolio, we have three different product categories that we're operating in, so cordials, ready to drink still products and carbonated products. So whilst the brand value is in excess of £90 million now, we don't actually have enough volume to produce ourselves in the most cost efficient way that commercial circumstances dictate these days you know margins are tight all the way through the supply chain. So it must be about 12 or 13 years ago, pre me actually, that we decided to outsource all of our manufacture and we use really strong third party co-packers. So at present our main co-packers are Princes Soft Drinks who are based in Liverpool, part of Mitsubishi, and a privately owned company called Core Ingredients. Princes particularly are very strong in the area of own label soft drinks production, so very used to producing high volume, high quality products at reasonable prices. I'd like to say lowest cost, but I'm not sure that's the case for all the main supermarkets. So we work on long term agreements with them, we work as open book as practical with that supplier.
So what we're doing in that process is ensuring we insulate them to lots of movements with respect to ingredients pricing, raw material pricing related to packaging. So for example, if the oil price rockets, then by definition our PET resin which we use to make our bottles will increase, or probably more recently when we had the referendum in 2016 when we saw the pound devalue virtually overnight, you know, we work with our suppliers to ensure we've got a long term sustainable relationship with them, which means taking pain when they take pain and if there ever was a gain taking some gain in the same breath. But joking apart, we're very much a long term partner within our supply chain. We do have one small manufacturing facility which is down in Ross-on-Why where we're producing bag in box, which is essentially if you bought wine in a box, it's a similar concept. And we produce that specifically for our out of home route to market, because that's very, very specialised. And the size of factory we have down in Ross-on-Why is the only one of its kind in the UK. And then our international overseas business, we're very much around shipping concentrate or finished goods from Spain and Portugal to supply those customers. So our supply chain is quite complex due to the diversity of the business. But we are very much in all of those relationships for the long term and, you know, working very hard towards, you know, our sustainability strategy as well because we can't achieve our ambitions, our goals and our aims if we haven't got those co-packers on board. They're very, very important to us.
Given its outsource model and how secret the recipe is, I wondered how Nichols protects the business IP.
Yeah, that's a really good question. So if you look at the own label copies within the supermarkets, it's very easy to see that Asda cola is a match for Coca Cola. It's very easy to see that tonic water is a match for might be fever tree or Schweppes, depending where the benchmark is. But when it comes to Vimto, Vimto is unique in its name, and it's unique in its taste, and it is absolutely impossible for those retailers to copy us. They do try. The nearest we've had is Tesco launched Fizzio, which was a seriously mixed up berry drink. I think it lasted about 18 months. So we're not complacent. We protect the IP really carefully of the flavour. A lot of the ingredients are exactly as they were in 1908. They're produced in secret. They're even used really traditional methods. So we haven't gone into some of the science and technology that's available in the flavour industry. We still steep some of the herbs and spices, and we collate that together, so we protect it as much as we can. But the reality is the consumers protect it for us. It's really hard to put Vimto as a word out there you know, full of vim and vigour, we were Vim Tonic, we're now Vimto, and it's really hard to replicate the flavour with the branding to say we are a match with Vimto. So even somebody like Aldi, I mean we can never say never because you know they're very smart people at Aldi, but you would probably have expected Aldi with their expertise in copying brands, that we would have seen a Vimto look alike in the North West stores of Aldi. And they keep talking to us so I think that answers it indirectly.
We have to protect the IP more overseas than we do the UK. So for example, in the Middle East, our largest market is Saudi, where we sell 35 million bottles of Vimto cordial during Ramadan. Our nearest competitor is called Tono there, which is just a name, it doesn't mean anything, but they've replicated our bottle and our product. But again, the love for the brand is absolutely synonymous with the iftar table - means that while we hold that market position and we continue to engage new consumers as well as looking after grandma who's looking after the iftar table very much during Ramadan, we hold our place. But it's not unusual for a competitor to try and rip us off in Africa and the Middle East, and try and do a Vimto name or use our branding. And we move on to that very quickly and through the legal process eradicate that. But in the UK, it's really interesting as I say the nearest match we've had was Tesco with Fizzio, and it fizzeod out in the fullness of time, and you might find it somewhere now, but consumers don't recognise that as a match with Vimto unlike looking at an own label cola and thinking, I might try that because there's a pound per bottle difference. And actually, it might be quite a good match against Coke or Pepsi, depending on what the retailer uses as the benchmark.
And it's staying relevant as a brand, isn't it? Well, my feedback to the team is continue to outperform the market wherever we go because when you're outperforming the market, you're growing your market share. Some years that's easier than others. In 2018, we had the World Cup, everybody thought we were gonna win. That didn't happen, did it. But we had a great summer. And we had lots of people coming off promotion because there was an issue with co2 supply in the UK. So we outperformed the market twice over, we grew 14%, the market grew at 7% - that is most unusual. Usually we're growing two or three percentage points above the market. And you know, 1908, we still need to be as relevant today as we were then which means you've got to keep the brand evolving, and keep that love that consumers seem to have - our consumers are really, really loyal. They love social media. They're really positive. We have people having a Vimto wedding, we've had a man who's done a Vimto tattoo and he's going to be really disappointed because we're changing all the branding this year, because it's got to stay so he's gonna have a tattoo that's not current with the current delivery anymore. But you know, you've got to work really hard at it. Never take anything for granted I mean, if for some reason for example, a consumer complaint isn't dealt with in the normal channels which is most unusual and it gets to me, I always go straight back to say sorry, going to find out what happened here, you find out what happened and you sort it you know. It's not about, oh I want negative PR on social media it's about doing the right thing. If somebody's gone and bought your product and they're then disappointed, it's our job to find out why and make sure it doesn't happen again. If something went wrong or just try and unravel you know where that consumer's disappointment has come from.
Nichols has its roots here in the North West and with things like HS2, I asked Marnie if she thinks we're seeing a resurgence for Manchester and our area.
Certainly when I reflect on the northern powerhouse title, or banner, whatever we want to call it, I think when I talk to businesses, particularly in my role as CBI chair, what did that really mean? And I think if I then translate that into what business would iterate to me, the two key areas around the North West and the East to West connectivity in the North is real about infrastructure, whether that's transport and digital infrastructure, and also around skills and the lack of skills within the North West. So I think if we take those two elements and look at where they are on the political agenda right here, right now, it would certainly appear that the North is becoming much more top of mind for Westminster. And I think there was always a question about HS2 value for money. I think that's a very different question to improving capacity and improving speed. It is about value for money, and therefore I think the question business had probably six or seven years ago 'is this value for money?' was a decent question to ask, in light of the increased costs we're seeing for HS2.
However, I think we're in a place now where that connectivity is hugely important, because it actually leads on to better connectivity East to West, which anybody who commutes from Leeds to Manchester or for example, when I take the train from Huddersfield into Manchester, I will ordinarily catch a train, at least two trains before I need to be in the centre of Manchester. And that just is unacceptable. It's not about cost. It's not necessarily about time. It's about frequency and reliability. So if that means we're higher on the agenda, I think that's a really good thing. And it would appear our current prime minister at the moment is very mindful of the Northern opinion in the general election, and it would appear at the moment that yes, we're very much going up the mindset of Westminster. You know, we are a devolved Greater Manchester, greater than anywhere else in the UK. And Greater Manchester has got a really good track record of managing that devolvement. And I'm sure Andy Burnham would like nothing more than greater support from Westminster and I think we're in a good place to capitalise on that. But I think the two areas I come back to that really make a difference to the economic position of the North West and the North generally, is around that infrastructure and around skills and capabilities. So I think those for me are the two areas that we would like the politicians to, first and foremost listen to.
My guest was Marnie Maillard OBE, CEO of Nichols PLC, the FTSE 250 food and beverage company.
In our next show, my guest is Tom Cheesewright, a futurist and author of High Frequency Change. Tom spends his time helping businesses deal with a globalised and fast-moving world where decision making just can't seem to come fast enough. He's in the media most weeks on the BBC Channel Four and Sky News, but we managed to catch up with him for a conversation about businesses in a future that moves too fast to blink.
Meet Tom next time on Business Futures.
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Marnie Millard OBE, Chief Executive Director at Nichols PLC
Marnie is Group Chief Executive for Nichols PLC. She joined the company in 2012 as Managing Director of the UK Soft Drinks Division and was appointed to her current role in May 2013. Marnie previously held senior roles at Refresco Gerber and Macaw Soft Drinks.
Nichols plc is the home of Vimto, a soft drink which was established in 1908 by John Noel Nichols and today has a retail brand value of £90m. The business operates internationally and turnover for the group is £142m. Vimto is represented in more than 85 different countries.
As well as her Executive responsibilities, Marnie is a non-executive Director for Finsbury Foods, non-executive Chairman for UA92 and is Vice President of the Management Board for the BSDA (British Soft Drinks Association) and was recently appointed as an advisor to the Board of Trade.
Marnie was awarded an OBE in the Queen’s Birthday Honours in 2018 in recognition of her contributions to International Trade business in the North West.
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