'A food business's biggest challenge is getting to £1m in turnover'

James Averdieck, who founded Gü, is now dishing up healthy dairy-free yogurts with his new venture, The Coconut Collaborative, which does a third of its business internationally.

Testing chocolate pudding for a living must be one of the most sought-after gigs going.

James Averdieck knows all about it. The entrepreneur spent seven years creating, tasting and selling the souffles and mousses made by Gü, the desserts company that he founded in 2003. But his latest venture has seen him ditch the decadent sweet treats of his previous business (which he sold to Noble Foods in 2010 for £32.5m) for products that are better for you.

“I wanted to do something different this time around,” explains Averdieck, who took a few years out after leaving Gü to plan his next move. “The world was moving on; sugar was the enemy. Rather than filling people up with the stuff, I wanted to go into something healthier, but still tasty.”

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That “something” is The Coconut Collaborative, which makes yogurts, desserts and ice cream from coconut milk.

The company trades on its core ingredient, which is creamier than other dairy-free milks, it says, and is filled with medium-chain fatty acids that can be quickly broken down by the body for energy and not stored as fat.

Its yogurts are also soya, gluten and dairy-free, which makes them suitable for vegans and those with food intolerances.

“I personally love dairy – I’ve got no beef with it,” jokes Averdieck.
“But a lot of people are now choosing to cut it out of their diet. Not the whole time, but perhaps three or four days a week.”

This business journey started in 2014 with Bessant and Drury, a small dairy-free ice cream company. “It was a tiny operation, but it had a good product,” says Averdieck, who bought a majority stake, rebranded it and started work on expanding its range of products to include yogurts and chilled desserts.

Key for it to become a success, Averdieck knew, was to grow at speed. “To survive in this game, you’ve got to be growing fast. The most challenging thing for food businesses is getting up to £1m in turnover – and the first one or two years are incredibly difficult,” he explains. “You’ve got to get a lot of people to buy your stuff, to get that momentum.”

Solving that problem at Gü and The Coconut Collaborative came down to five key focuses, he says – and they’re things that he thinks other small food businesses should obsess about if they want to do well.

“First, you’ve got to have a fantastic product and you’ve got to be religious about quality,” he explains. “Second is implementing a really strong innovation pipeline, so that you don’t just have very high quality products now, but also further down the line.”

The third focus, he says, is a killer brand – one that people like and sticks out on the store shelf. Fourth, a food business owner needs a top team of people to run things, and finally, you’ve got to have seriously strong customer service. “Those are the five moving parts, if you like, but the climate has also got to be right,” adds Averdieck.

In its first year, The Coconut Collaborative registered £200,000 turnover. In its second year, that figure rose to more than £1m. Last year, the business turned over £3.7m, thanks to its efforts internationally.

“Thirty-five percent of our business is done internationally,” explains Averdieck. “We operate in France, Germany, Austria and New Zealand, which is a great market, because there are about 4.5 million people there who eat a lot of dairy-free.”

In Europe, while countries such as France have been a slower burn, things are starting to pick up. “We’ve got a good international footprint. We want to become the challenger to Alpro, which is the big name in this space,” he adds.

James Averdieck, The Coconut Collaborative

One of the biggest challenges that the company faces is that its raw materials, coconuts, aren’t very predictable. “Coconut milk is very sensitive – from a stability point of view, it’s more delicate than cow’s milk,” explains Averdieck. “It’s not homogeneous in the way that milk is; there’s more variation.”

Rainfall, soil and the time of year can affect things such as the viscosity of the coconut milk, he adds. 
“That’s our biggest challenge: finding a way of delivering a consistent product with a raw material that isn’t very consistent."

Averdieck has set up an team to overcome this hurdle. Its job is to work on the company’s recipe and the way that it screens its raw materials.

He also has advice for small businesses thinking about trading beyond the UK – build a strong home operation first. “International [expansion] is always going to be more expensive,” he says. “And while you can control things in your home market reasonably well, it’s more difficult to do that overseas.

“I’m not saying it’s not the right thing to do. We’ve done it to scale our business much faster – and you can add more value. But it’s not an easy way of simply adding turnover with no cost. Normally it’s less profitable and it takes longer to break-even,” he says.

Solid, speedy growth has been key to the company’s success so far – and Averdieck doesn’t want to put his foot on the brakes any time soon. “The yogurt market is massive," he says. "If we could get to 1pc of that by the end of 2018, that would be a good position for us, as a [then] £20m business.

"We just want to take a small amount of a big market.”