The genesis of an enterprise: how this niche food business raised its first £2 million
An Oxford education and an MBA were of limited use when it came to the practical hurdles and difficulties in the first years of a start-up, according to Ed Foy, co-founder of health and juice brand PRESS.
Speaking at an entrepreneurs event hosted by Cazenove Capital, Ed Foy described how he went through a “cycle of despair” as early dreams of astronomic growth leading to a quick sale turned into a different – and often difficult – reality.
The business, which earlier this year completed a second successful fundraising, is now firmly established with products on sale through 350 outlets in London and elsewhere.
Ed Foy and business co-founder Georgie Reames used their observations of food and health trends in the US and elsewhere to formulate what they believed – on paper at least – would become a potentially profitable market in Britain. The product was high-quality, freshly pressed juice.
“Big food trends tend to start in the US west coast, then move to Australia’s east coast, then back to the US east coast and from there to the UK and Europe,” Ed says.
“We were very focused. We saw this trend and we wanted to ride it. We studied the outlets in the US and Australia and we looked to copy much of what they were doing.”
With both of them working in other jobs, in 2014 they spent around £10,000 on a London agency to help define and develop a brand.
“Looking back, we could have done it with just a graphic designer, and saved the money.”
PRESS was born, and after flavour trialling with friends the first outlet opened as a pop-up stall in Old Street, selling 500ml bottles of juice for £5 out of an old bathtub.
The shock of reality
Ed Foy, who studied at Oxford University and went on to do an MBA at Harvard, describes what came next. “I had a great education. I could write a fantastic business plan. But I had no practical experience of day one on a start-up.”
The “time modelling” he had undertaken to ensure enough juice could be pressed quickly enough to meet demand was one of the first concepts to unravel: he was juicing all night and yet the stall was selling out in the morning and having to close by 11am.
In coming months there was progress, but also shocks, setbacks and “many hard lessons”.
The juices’ short three-day shelf-life meant online sales were difficult. Wastage was high. Staffing was problematic. The first shop, opened in Soho in 2014, wasn’t located well enough to capture footfall. “It was a fatal error. We didn’t have the money to open in quite the right place, so we opened in the wrong place. We should have waited till we had the cash.”
‘My big wallow’: surviving entrepreneurial despair
“I was exhausted and almost broken at many points,” Ed says.
“Like all business start-ups I’d dreamed of creating a great chain and selling it for millions several years later. But the reality was a life in which I drew no pay, worked 18 hour days and had a business that wasn’t going as I’d hoped.
“When we’d looked at the US models we’d seen success but perhaps only at a surface level. We didn’t really know the mechanics of those businesses or how sustainable they were. Some went bust. Again, it was a lesson.”
A stroke of luck and new directions
Dedication to the look of the PRESS store and to the quality of the products paid off. But luck also played a part.
Five months after opening the Soho outlet, a passing Selfridges buyer asked Ed whether he could operate a concession in the Oxford Street store’s famous foodhall.
“I stayed up all night. This was the moment my MBA came into its own. I prepared 80 pages of slides. The team at Selfridges said they had never seen anything like it.”
With the boost of the Selfridges connection, Ed and Georgie were in a stronger position to seek backing. After discussions with a number of parties, they sold a stake in the business to the Clark Group, the boutique investor set up by Steven Clark and which has stakes in a number of niche catering and accessory brands. Then came a spurt of growth.
“We said we’d open eight stores in a year, and we opened three very quickly. We were very stretched, and probably forced ourselves to open stores at the expense of looking at what was working and what wasn’t.”
Many fundamental problems persisted, particularly the juices’ short shelf life. “For the first 18 months my conversations with Steve were hard,” Ed says.
A solution came in the form of a pressure treatment which meant the juices’ life could be extended to beyond a month without the flavour or nutritional values being affected. That innovation suddenly opened up more possibilities to distribute via other shops, restaurants and hotels – as well as making the online operation more feasible. And the pressing of the juices was outsourced to a high-tech facility in Holland, the only one of its type in Europe.
In early 2018 PRESS raised a further £1.15 million through Crowdcube, enabling the firm to invest in a warehouse in Greenford, west London; to hire more senior personnel and to progress with market testing in France.
The business today is not what Ed and Georgie initially envisaged. Wholesale now accounts for the bulk of revenues, with 350 outlets signed up. The number of PRESS outlets, however, has shrunk back down to three.
Online is growing and PRESS wants to expand an offering of related health and nutrition products and services.
“I’m out of the wallow period and excited again,” Ed says.
What does he think or hope for in terms of an exit?
“Everyone is looking for a five-year unicorn. But you can’t captain the ship with one foot in the lifeboat. I want to focus on building a meaningful business.”
Cazenove Capital has looked after entrepreneurs for many generations, offering support from the initial planning of a business right through to exit. While we are neither lawyers nor corporate finance professionals, we can help our entrepreneur clients by introducing them to the right people at the right stage in the evolution of their business.
This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.