With more consumers taking notice of the sugar in their food, there are more opportunities for lower-sugar products to grab the attention of retail buyers – even in categories with huge, entrenched competitors. One such part of the store is the UK spreads aisle, where fledgling chocolate spread brand JimJams has gained listings with two of the country’s largest grocers. Dean Best caught up with company founder Kevin Bath to talk about the development of JimJams and his ambitions for the business.
The growing awareness among consumers in markets the world over of the links between diet and health, as well as the rise of the digital sphere, have opened up opportunities for entrepreneurs to develop brands and make inroads into all parts of the market.
More consumers are more interested in what they eat and how their diet can affect their health. At the same time, the Internet, social media and e-commerce have lowered the barriers to entry on how brands can market themselves, with small businesses able to connect more quickly with consumers and build followings for their brands.
Throw in a growing mistrust of big business and the ingredients are there for fledgling companies to build a presence for their brand, even in categories with powerful incumbents.
It is, of course, not that easy. However, one entrepreneur to have enjoyed some early success is Kevin Bath, the co-founder of UK firm JimJams Spreads.
Bath has worked in the Navy and in the City of London but, in 2013, while still in his job in the Square Mile, he and his wife set up JimJams, a chocolate spread they say has 83% less sugar than “leading brands”.
The spread contains no refined sugar and has 8.7g of naturally-occurring sugar per 100g. To sweeten the spread, JimJams uses the sugar alcohol xylitol.
The spark for the business and the brand, Bath tells just-food, was noticing the amount of sugar in the spread his children were using on pancakes.
“The children were eating pancakes and I spotted how much sugar was in the well-known hazelnut spread, worked out the sugar content and it was quite scary,” Bath says. “We started looking for a healthier chocolate spread. We couldn’t find any.”
Two years later, Bath left the City to work on JimJams full time and, meeting just-food at a trade show in Birmingham last month, he is now running a business with a portfolio taking in jam (with more products to come) and with listings with two of the UK’s four largest grocers, Sainsbury’s and Morrisons.
“It’s going well,” he says. “The low-sugar message and social media – word-of-mouth, through Instagram and Facebook – have what’s been behind the growth.”
As is to be expected for a small business (JimJams’ annual turnover is around GBP500,000 (US$675,000)), there have been ups and downs, not least with the securing of a listing at the UK’s number one food retailer Tesco in 2016.
“We were in Tesco but they’ve done their own label since and we’re no longer in there,” Bath says. “That was a bit disappointing. However, we feel branded products are stronger in the category. You can see the data.”
While Bath says his “main aim” for the year ahead is to “cement” JimJams’ retail presence in the UK (the company also listings with health-focused player Holland & Barrett, with regional grocer Booths and on Ocado), he and the company are looking at developing business in the foodservice channel and in export markets.
“We’ve got bits and pieces in foodservice,” Bath says, pointing, for example, to the Virgin Airlines lounges at Heathrow Airport stocking smaller packs of the JimJams chocolate spread. “The wheels are in motion to push the foodservice part. We’re talking to the education account managers within Bidvest. We’re talking to Brakes. With foodservice, it’s chicken and egg. We’re trying to get a big account and then bring them in.”
Outside the UK, JimJams has, in its five years in business, sold its products on a limited basis in markets in Europe including Spain, Norway and Poland. At present, the contract with Holland & Barrett takes in the island of Gibraltar, while the company has secured a listing with Spinneys in Dubai.
Bath says JimJams is making a fresh effort to build its export business, especially with the value of sterling falling since the UK voted to leave the EU. Before the referendum, with sterling stronger, JimJams suffered as it sought to increase its presence outside the UK, Bath reflects.
“A couple of years ago, when the pound was really strong, the Scandinavian countries loved it but the pound was so strong,” Bath said. “The fall in sterling is going to help us out. We are talking to Scandinavia again and other markets in Europe.”
Of course, as with other UK food companies across the sector, the fall in sterling has hit JimJams, not least as its co-packer is based in the EU.
“We manufacture in the EU. That’s clobbered us with Brexit. The pound has hammered us. There’s no chocolate spread manufacturers here in the UK,” Bath says. “We’ve got a great relationship with the manufacturer. We tried to negotiate on cost but it’s all about numbers. The more throughput we’d earn for the manufacturer then you’re going to get better costs. If we use a whole line all day, every day, and they run their factory more efficiently, then the cost will come down.”
When JimJams started, Bath used to handle the company’s fledgling production but he is not interested in resuming manufacturing in-house with the business at its current scale.
“I’d rather concentrate on building the brand up and bringing more products to the brand, building the portfolio up so it’s a healthier brand to go to,” he insists.
Bath’s attachment to the brand and the business is clear. He says JimJams has attracted interest from possible suitors (he won’t name who) but insists even if he did agree a sale he would like to keep a shareholding and have a day-to-day role in the firm.
“I had a couple of meetings but we’ll see how that goes, how that progresses. They’re still looking at us I think, seeing how we go. I suppose in fairness if they offered me GBP20m I’d take the money and run but I’m sure they won’t,” he laughs. “If I did, it would have to be that I keep a retaining share and help build the brand up.”
For now, Bath’s focus is on consolidating and growing its presence in UK retail, trying to gain a foothold in the country’s foodservice market and building a sustainable presence outside the country – not easy tasks for a still fledgling firm.
“It’s hard work but I think it’s worth it. Every day is different. When you’re sitting behind a desk in London, it’s just that rat race,” he says. “I had no experience in FMCG whatsoever working in London. I try to stay humble, you know, but you do kind of lose sight of what you’ve achieved. It is good to step back and think about it but there’s a long way to go.”