Export story: The Italian Beverage Company
Exports make for a tastier proposition
On a trip to the US 17 years ago, two brothers, Sheldon and Harvey Flax, saw a cart being pushed with flavoured syrups. Convinced the Davinci brand would sell well in the UK, the pair put themselves forward to import and distribute the products back home.
Proving successful with what was initially called Davinci Fine Foods American Beverage Company, the brothers added other powdered and liquid drinks, sauce and syrup brands to the portfolio, securing master franchisee roles for the UK and Ireland. As demand and awareness grew, the company became an exporter to Europe, effectively by default. But when Davinci appointed the distributors the Flax brothers had been selling to as its own agents, the business required some re-engineering to seize the exporting opportunity itself. By that time, one of the brothers, Harvey, had left the business. Six years ago, Sheldon renamed the business the Italian Beverage Company, due to increasing trade of Italian products, such as biscuits, confectionary, pannatone and chocolate, plus machines and ancillaries. After commissioning manufacturers in the UK, it developed a range of products under a new brand, Simply, all of which contain no artificial flavourings, colours, additives or preservatives. In January 2008, the Italian Beverage Company launched its Simply Syrups, quickly followed by smoothies. Frappes, thick milkshakes and biscuits have since been added. The result of the company's ingenuity is plain to see. It now supplies 25 countries with the Simply brand and export sales have increased by £750,000 in the past 15 months. “We used to have five or six significant countries we exported to, and they were only taking odd shipments,” recalls Tony Godden, the director responsible for exports. Turnover has reached £3.5m, up 40% year-on-year, achieved during the recession, and employee numbers have remained static, illustrating the additional value exporting has the ability to offer a well-run business. Negotiating a potential minefield, the company has stepped carefully to ensure continuing business with Davinci, the Lindt-owned Ghiradelli and others is not affected in the UK. Elsewhere, the Simply range is proving popular in the Middle East (Dubai, Saudi Arabia, Jordan, the Sudan, and Syria), plus South Korea, Germany and Ireland. Newer opportunities have also opened in Poland, Austria, Bulgaria, Greece, Ghana, Portugal, Egypt, Estonia, Latvia and Lithuania, with many of the countries buying a handful of pallets and spending between £25,000 to £50,000 a year at present. While in the UK, the Italian Beverage Company continues to sell to the likes of Debenhams, BHS, Wetherspoons and select service partners (airports, railway stations and motorway services), a third of turnover is now derived from export trade. “We didn't want to brand switch,” says Godden. “Simply was for export and to fill gaps in the UK, taking business from competitors and not cannibalising sales here.” Godden puts a good deal of the increase in overseas revenue down to the cost-effective exhibitions the company has participated in, which it discovered via the East of England Development Agency. “We recently attended a two-day event in Portugal and met with a number of distributors,” he explains. “The next day UK Trade and Industry (UKTI) arranged for potential customers to come and visit us at a hotel. We paid £500 each for two of us, and the team there organised the rest.” Godden's considering a presence at two similar exhibitions in India and Canada, but says payment and logistics are major considerations for every new territory. “Will we get paid? Is it difficult to get there?” he says. “We started with the philosophy of not exporting beyond a three-hour flight, but are now working half-way across the world. You need a rifle approach rather than a shotgun. There are only four of us and one of me – and I mainly look after the exports. Set objectives and, if possible, don't move away from that.” Still, with 321 leads from the Caffé Culture Expo at Olympia, Godden's not about to stop exploring new opportunities. “I've got 100 really positive leads to follow up on from the UK, Turkey, Egypt, South Africa, Hungary, Finland and Norway. We have to make sure we do them justice.”