Fresh Eric’s Cake Company: Eric and Jeanette Watkins
The Micro Business of the Year winner at the Startups Awards has found the right ingredients to success
For most budding entrepreneurs, the ingredients of success are things such as cash flow, market position and effective staff. For husband and wife team Eric and Jeanette Watkins, it’s vital that more literal ingredients are right, as they attempt to take the UK cake industry by storm.
The couple’s firm, Fresh Eric’s Cake Company Ltd., was named the Micro Business of the Year at the recent Startups Awards, and it’s easy to see why. Despite having a young family and minimal funds, the couple have overseen an explosion of interest in their tasty treats since the creation of the business in late 2003.
Eric and Jeanette felt that the main suppliers were serving the UK public up mass produced, additive-packed cakes. The duo believed that a focus on fresh ingredients, strong flavours and moistness would enable them to take a slice (no pun intended) out of the UK’s £1.2 billion cake market.
“My wife ran restaurants in the USA for about 10 years,” Eric recalls. “In terms of cakes, they have something quite different over there. The recipes are richer and moister.
“We had a ‘I think we can do better than this’ moment in our local coffee shop one day. What spurred us on was that there were voluntary redundancies on offer at the company I was working for and we had a baby. We wanted to do something that involved the family.”
The couple’s first step was to try out recipes on friends and family, based on versions of classic cake flavours – chocolate, carrot, lemon and apple and spice. The feedback from these tests convinced Eric and Jeanette to take the plunge.
“We had a team of tester who all got lots of cakes to try over the course of a couple of months,” Eric explains. “The gave the best ones to a local café on the high street – that was basically our test marketing. We then did some cold calling. The response was so good that we knew it was something we could take further.
“We never really knew if it was always going to be a home business that would be a bit of pocket money if I got another job or if it would turn out being a business in itself.
“The response gave us the confidence to go for it properly. I always had an ambition to make something bigger out of it, but in the back of our minds we thought that at the worst, we would have a little home bakery business that would make a bit of money.”
Giving up his job at a large pharmaceutical company, Eric used his redundancy payout to establish the business, with much of the money spent on ovens, mixers and other kitchen equipment. After nine months, the business became too large for the Watkins’ home, and they moved the operation into commercial premises and took out a small bank loan.
But it was just a couple of weeks into trading that Fresh Eric’s enjoyed its big break – one that led to its cakes being stocked in 20 franchised cafes.
“We took some samples into one of the BB’s shops in our local mall, not even realising it was a national chain,” Eric says. “They said that their area manager was looking for some new products, so we were given his ‘phone number.
“We gave him a call, he came and tasted them bought the cakes he’s tasted on the spot for a shop in Chatham and then asked us to supply for another half a dozen shops from Chelmsford up to Evesham in the Midlands.
“It was a bit of shock to us, as we’d just sold out car to fund the business, so we had to buy another one. Our first cakes were delivered by a pram!”
The Watkins’ direct approach to marketing their cakes has been supplemented by regular appearances at trade shows. The Great Taste awards bestowed five gold medals upon Fresh Eric’s Cakes this year, with local and specialist press articles helping to raise interest.
Although Fresh Eric’s cakes cost a little more than your average Swiss roll, the couple are convinced that the public is prepared to pay for quality.
“We try to price it so we are competitive with high end distributors, so there is a good quality end of the market to compete with. We are a little but more expensive, but hopefully not enough to put people off.
“It’s a funny sector we’re in – on one end of the scale there’s the WI, people who bake their own cakes, right up to the big national distributors like Brake Bros.
“We end up competing with them and everything in-between. We compete with the big suppliers on quality and we compete with the on-man bands by being professional, consistent and reliable.”
The business is staffed by five employees, including Eric and Jeanette, with duties spilt between kitchen work and driving the goods.
“Most of them were people we knew of that were reliable,” Eric says. “We made the decision early on that we would do all the training ourselves, we didn’t want people with lots of bakery experience, because we wanted to make sure we stuck with our recipes.
“We have great recipes and they are not what people trained in this country are used to – it’s an American style of cake.”
Now with around 40 clients, including Fortnum and Mason, Fresh Eric’s Cakes has enjoyed 10 per cent growth a month, every month, in 2005, trebling in size in just a year.
Eric admits this growth has caused some headaches.
“Finding suitable premises was a big deal for us,” he says. “As well as size and cost, we had to think about the future as we are planning to grow organically to be a manufacturer, so we needed planning permission for industrial use, but we’re too small for all that, so we have to find somewhere small and still meet all the health and safety requirements a big business needs to live by.
“We are growing very fast, so we end up spending money on getting our premises up to scratch, knowing that in one or two years’ time, we will outgrow it and we’ll have to do it all again in a 1,000 sq ft unit.”
The business has also made an understandable impact on the couple’s home life, with 70-hour weeks not uncommon.
“We share the childcare between us, so it means we have to spend more on staffing, but that’s the trade-off we are prepared to make,” Eric insists. “That’s why we went into it in the first place. It’s hard work, you’re always juggling, but you can do it.
“I like the fact that the kids know what we do, when you work in an office, it’s hard to explain what you do!”
The Watkins are now looking for investors so that Fresh Eric’s Cakes can be taken onto an industrial scale. Eric feels that this shouldn’t jeopardise the quality of the cakes.
“Baking is very concise – if you do the recipe every time, you’ll get the same result,” he explains. “Where there’s some craft is in the mixer, but when it comes to packaging, slicing and measuring out ingredients, you can scale up and not anything in quality.
“We’d like to start supplying distributors regionally and build up a national network. We’ve got some ideas about the way to package the cakes that no-ones else does.
“We see ourselves continuing to grow and develop a brand – when we started out, we said we wanted to be the Ben and Jerry’s of cakes.”