just the answer: Plum Organics CEO Neil Grimmer, Plum UK CEO Scott Wotherspoon
Challenger brand Plum gaining share from industry heavyweights on both sides of the Atlantic
US and UK baby food makers Plum Organics and Plum UK have more than their names in common. Both start-ups were founded by parents seeking an alternative to mainstream baby foods. Both group's share a passion for providing quality products that meet the needs of young children and their parents. Both have come to a high growth area of the baby food category as challenger brands to then expand quickly using clever marketing and a fresh approach to innovation. The similarities are so striking that yesterday's (24 January) announcement that US-based Plum Organics has acquired Plum UK seems almost written in the stars. Katy Askew caught up with Plum Organics CEO Neil Grimmer and Plum UK CEO Scott Wotherspoon to discuss how the tie-up will act as a platform for growth.
just-food: What attracted you to a deal?
Neil Grimmer: We've got to talk about this as 'The Tale of Two Plums'. There was Plum in the US, Plum in the UK, both started within months of eachother and founded by parents - I was one of them - on a mission to get better food for little ones. It was done with innovation at its core and culinary inspired recipes. As the brands grew up over time, we became friendly with one another. We had a shared name and a shared philosophy about how we feed our kids, so this is really the culmination of a friendship that has been budding for years. We have a shared mission to improve the lives of kids through food and we get along fabulously, so we said 'lets do it, lets get married'.
just-food: From the UK perspective, what benefits does the acquisition bring?
Scott Wotherspoon: The main thing is, they have been hugely successful in the US. They have really done a great job of really understanding what kids are after, what mums and dads are after and then delivering that in a very creative, design friendly, innovative way. Tapping into that innovation stream, that ability to grow categories, that creativity really builds on what we do and have done already. The team here have done a great job since 2006, but there is even more that we can do and the US are doing it, so it just made a lot of sense to be together.
just-food: So there will be a cross-fertilisation of ideas?
Wotherspoon: People on Facebook at the moment are asking that question: when are you bringing US products across? People are going and having a look at them already, because if you google Plum Baby at the moment you get a mixed picture of US and UK and that's the reality, it is a much smaller world. People are after both sets of products on both sides of the pond already, and that is something we will be able to deliver. Also, the creativity that you will get from both teams, both sets of people, with a different understanding but very like vision, will really lead to fantastic results. Not just in both countries but from here on in elsewhere.
Grimmer: When I first started, prior to becoming a dad I was a product designer. Innovation was at the core of our company from day one. We have built out a team, we now have 11 people out of 65, that are focused exclusively on innovation and driving new products. We have launched 40-60 new products this year. It's a real engine around creativity meeting consumer need. Scott and the team over in the UK are equally very innovative, super creative, and we want to put that together and swap the recipes we have. So that when the Plum moms, or the Plum mums over here, see those products they can get them when they want them.
just-food: Will there be additional investment behind the Plum brand?
Grimmer: The bringing together of these two companies is fundamentally that investment. We have resources to be able to support the growth both in the US business and the UK business.
Wotherspoon: We aren't talking about specific amounts being invested in marketing but, by necessity, as we do more innovation we will support those innovations more. We will work harder with the key grocers, the key retailers, to make those innovations work even better. We have very significant plans to grow this year, starting pretty much immediately. We will make that growth happen through innovation and getting behind that innovation.
Grimmer: Part of the thing, and I think we have this in common in both the US and the UK, is we don't spend as much of our time - quote, unquote - classically marketing. We spend the majority of our time connecting with mums and dads, putting resources behind a nutritional database where they can come online and research our ingredients... [and] connect in with our paediatrician. That is where we put our dollars. At the end of the day, we are a challenger brand. We actually don't take a very traditional or conventional path to how we have grown the business and I think that is, in part, what has made us successful. We are the parents, we are our end consumer. We know that this empty marketing doesn't work for us as consumers and we know it won't work for our end users either. It is about really re-thinking that relationship and putting dollars behind things that actually matter to our consumers.
just-food: As a challenger brand, you are coming up against some industry giants - the likes of Nestle, Heinz or Danone - is this unique approach one of the key reasons why you have been able to compete?
Grimmer: In the US, we like to think of Plum as a little giant. We started out very ambitiously with four or five people, taking on Nestle - who are Gerber in the US - and Beechnut. There were two players and they dominated the market. Audaciously, five people with six products walking into the mainline baby aisle with a brand new innovaton - a spouted pouch - with culinary inspired recipes, started to actually outperform all of the incumbents in the space. That momentum started to build and build. What we found was that the resonance that we have with those mums and dads in the US outpaces any spend that could be applied in a more traditional manner. I see the Gerbers, the Beechnuts, the Cow and Gate and the HIP as the brands we are really going head-to-head with.
Wotherspoon: It is absolutely a parallel story in the UK. The brand started in a kitchen, then ended up in Sainsbury's and Waitrose shortly afterwards. There wasn't a lot of money to do traditional marketing so they were getting people to taste the products and talking about it - even in those days we had a good strong online presence. Necessity means you do things in a different way. They started in quite a different way and we have kept that going. A lot of our innovations speak for themselves as well, so Taste Adventures, it says what it does. It is a taste adventure for little ones. We have new tricks and new things that we are going to do, but we are very confident that we can extend what we have been doing and make both businesses grow really well.
just-food: How is the organic baby food category standing up in the face of the economic downturn? Are you gaining market share?
Wootherspoon: In the UK, the total baby food market is pretty flat. The organic baby food market is up about 5% over the past year. What we are seeing in organic baby food - as is the case in many instances - it is the middle of the market that gets squeezed but the premium end actually does pretty well and the value end does well. At the premium end, people are investing in their children. We have given them great quality food on both sides of the Atlantic and people are investing in their children when they buy it. In the UK, our core growth, what we consider the main meals, is about 25%. So we are growing share in the core of the business. That is absolutely the aim. Organic baby food is doing well, but we are doing better than the market.
Grimmer: In the US, it is pretty extreme what is going on there. First you have an incumbent like Gerber and Beechnut, they represent 80% of the market. And they have collectively had 30% declines. Plum currently represents 5% of the market and we are driving 50% of the category growth. That tells you the sheer horsepower of this small, very personal brand. That story is true of the UK too and we believe it is driven by great product innovation and a very real connection to the people we serve. Parents universally want what is best for their baby, and organic is that. It is free of pesticides, usually the brands that are organic have some environmental or social aspects to their business. I think that those are the things that matter to young parents today.
just-food: This is Plum Organics' first international acquisition. What prompted you to move outside the US?
Grimmer: We think that all kids deserve the best food possible. We don't think that idea is exclusive to the US. Kids all across the world deserve the very best food. That is what prompted us to move outside the US and partner up with Scott and the team in the UK.
just-food: Could plans to expand the business further internationally be in the offing?
Wootherspoon: There are plans to expand in other markets. It is a bit early to say what they are, but this is a significant opportunity all over the world. We will be going into new markets at the right time.
Grimmer: We don't think healthy food for kids is an idea that is exclusive to the UK or the US. We think that is an idea that has global appeal for parents everywhere.
MarketLine's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a comprehensive breakdown of the organic and inorganic growth activity undertaken by an organi...
TechNavio's Analysts forecast the Global Baby Food and Formula market to grow at a CAGR of 5.4 percent over the period 2012-2016. One of the key factors contributing to this market growth is the growi...
- BRICs: The thinking behind Mondelez's Vietnam deal
- Interview part 1: BRF CFO Augusto Ribeiro
- Prospects for protein: Snacks growth to continue
- Comment: Why Gardein is Pinnacle's ideal fodder
- Deal or no deal: Should Danone buy Mead Johnson?
- 2 Sisters Food Group posts higher annual losses
- Kellogg trumps Abraaj bid for Bisco Misr
- Bird flu leads Dutch to stop poultry distribution
- Live blog: Food Matters Live
- Arla eyes infant formula firms with lactose plant
- Early Signals: future scenarios that will drive consumption and product innovation over the next five years
- Energy Bars Market in Canada: Market Profile to 2017
- The Snackification of Breakfast
- Dairy Product Production in China
- PepsiCo, Inc. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report