Gü Chocolate Puds: James Averdieck

“Nobody can be arsed to make a good pud anymore but the Brits love one,” enthuses James Averdieck, the founder and MD of Gü Chocolate Puds, formed less than three years ago and currently shifting 200,000 of its premium products each month.

“We don't have a food heritage but we love good food. Unlike the French we can't make it, so there's a great appetite for quality convenience food.”

That's exactly where Gü has found its niche, entering the chilled desserts market at the top. Its desserts look, feel, cost – and according to Averdieck – taste better than anything else on the shelf. Open them up and, if it's an oven-ready soufflé, you'll find they come in reusable glass ramekins – a deliberate quality mark. “We're the cheat's choice,” he says. “But it doesn't matter if people know you haven't made it. It's about taste, and they're restaurant quality. Good restaurants would knock our puds out at a fiver a pop.”

At around £2.50 for a two-person serving, Gü puddings are more expensive than other products in the chilled desserts section. “We're right at the top of the narrow niche of chilled desserts and we've moved the quality needle,” admits Averdieck. “If we do have a competitor, it's not on the same shelf, it's Ben & Jerry's or Green & Blacks.”

Averdieck thinks society's current fascination with food, from fad diets to gastro pubs and celebrity chefs has left the supermarkets perfectly positioned for a proposition such as Gü. “Food is trendy and there's been a polarisation between healthy, diet food – which personally I can't stand – and very indulgent food. Supermarkets have seen it with soups, pizza, pasta, wine, etcetera. We're creating that trend in the puds market.”

Establishing a brand

Gü is more than a great tasting product: it's a brand with wide appeal, and its packaging – black card boxes in a sea of white and blue plastic – sets it apart. There's also an Innocent Drinks-esque element of fun and pretend amateurishness to the whole affair, while the word ‘Gü' is highly evocative itself.

“Chocolate is about fun and indulgence; it brings out the kid in us,” says Averdieck. “The smell; it reminds you of sticking your hand in the mixing bowl. I think we've got a romanticised pudding thing and our central themes are fun and quality.”

Add the special ingredient ‘convenience' and it's no surprise Averdieck's recipe for success is to target young busy middle class urbanites – and for him there's a slice of West London that serves as the perfect taster. “We target the 35-year-old Fulham, Putney, Wandsworth brigade. We're a national brand but if you target a certain type of person, then people buy into it from there.”

The building of the Gü brand and packaging was no slap-dash affair, though. “Branding is a total nightmare. You could look at hundreds of names and not tell if they'd work. I mean, you wouldn't have picked out Mars until you saw it in the packaging.”

Branding agency Big Fish sold Averdieck the Gü brand and packaging together – bizarrely by making him believe it was a real company in Europe selling the same concept. “They showed it me and I thought what a brilliant brand name, it's totally right and it looks great, but fucking hell, they've beaten us to it – I was totally hooked.”

Once in on the secret, Averdieck deployed his own piece of unorthodox research. “I took a few boxes into Waitrose, put them on the shelf and watched to see if people picked them up – because that's what matters. They did.”

Track record 

Catching a growing niche with a premium solution; great packaging; even better brand. It's a good story – but nowhere near the complete one. Gü has been so well executed it will have sold £11m worth of puddings in only its second full year of trading, is well into profit and growing at 90% a year – all without raising a penny. Most entrepreneurs wouldn't have pulled it off. Take a closer inspection of Averdieck's CV and you begin to understand how he has. His track record is a VC's wet dream.

A degree in economics from Durham (during which he sold shoes to traders on dealing floors), straight into strategy consulting at Arthur D. Little. On to Safeway, during a time of aggressive growth. Then to St. Ivel, where he worked in sales, marketing, buying and product placement, reached board level and established the company's European business. Twinned with the fact he's the fifth consecutive generation of entrepreneur in the Averdieck family and there appears more to Gü's success than stumbling on some tasty soufflés.

Market knowledge

Averdieck's inside knowledge of the foods industry prepared him for the risks as much as the opportunities. “The fresh foods business is very competitive and a lot of companies have gone tits-up. There are plenty of reasons not to enter; you're dealing with very powerful supermarkets and lots of big suppliers like Northern Foods, Geest, Nestlé, Muller and Cadbury.”

However, Averdieck also knows what the big players don't do very well. “There aren't many multinationals that have strong premium brands,” says Averdieck. “They tend to say, ‘if we're going to do something we want it to be a £100m opportunity straight away'. New ground and premium brands are almost always started by entrepreneurs – you need that human touch and big companies don't do that very well.”

Joint venture

Most entrepreneurial brands struggle to hit the scales of supply needed to establish themselves, however. Averdieck knew while he had identified a gap, he'd need manufacturing clout. That either takes a lot of money – or a partner. “I've been round most of the desserts factories in the UK, if not Europe, so I know this sector very well. I wanted a company that could deal with scale but also quality, so it had to be a sizeable patisserie.” The partner Averdieck selected,

Rensow, was a supplier of airline catering looking for new markets. A joint venture was agreed and with a combined input of approximately £100,000, Gü Chocolate Puds was born. Rensow manufacture the self-made Gü products – there are four other suppliers from Belgium, France and the UK – while Averdieck's side of the company arranges the logistics, sells to the supermarkets and manages Gü's profile.

Prising open the door

The main challenge to any new food brand is getting stocked. Averdieck says, despite his contacts and experience, it wasn't easy – and he's under no illusions that until they landed their first orders from Sainsburys and Waitrose in May 2003, the company wasn't really alive. He knew what to present, however, and where the buyers reject most pitches.

“Supermarkets get sent tons of new products every week so buyers don't want to see you. They'll say ‘send it in and we'll have a look it'. I made sure I got to sell to them,” he says. The key was selling a ‘ready-to-go' product – not just a concept. “I know the ropes. We took them the finished, packaged Real McCoy and proved the supply chain was set up. Too many people see them as business advisers who'll help you with your brand – they're not.”

They might be interested in taking your brand as their own, though – but that's something Averdieck has not, and will never, consider. “Own label isn't my bag and would drive me crazy. You're controlled and don't own anything. I want to build something not just supply someone else.”

Supply and demand

Supermarkets don't just hand you six-monthly contracts then swipe them away leaving you in limbo – they don't give you a contract at all! “If they wanted to stop tomorrow, they could,” says Averdieck. “The whole thing could just go down, but in reality, it doesn't, because you establish a rate of sale and work round that.”

It's a logistical nightmare, though. Gü supplies to 90 depots, seven days a week and in such a fiercely competitive market must maintain 100% service levels. It's made especially difficult as Gü is a fresh food product with a shelf-life of two weeks. Predicting order levels is only half the problem – Averdieck must also ensure stock arrives on time. Gü outsources to a distribution company owned by Muller and used by Innocent Drinks and Denon Yoghurts. It never needs a full truck though, so again, it's not straightforward. “It's a case of monitoring what's going where and trying to piggyback on other companies' deliveries by buying a bit of space in their trucks,” says Averdieck.

There's also a constant battle with supermarkets to justify space and leverage more. “Sainsburys, for instance, has 550 stores. We've got some products in all, but not all products are in all.” It's a constant process of negotiation and brand-selling. “Waitrose review every month, Sainsburys every three and [when they do] they are always moments of risk and opportunity.”

Prepared For competiton

Averdieck knows Gü won't stay unrivalled forever. Supermarkets have started to release premium brands and he accepts a larger company could launch a brand in direct competition. He also knows for Gü to stay on track, he needs support at the top. While averse to taking on “stacks of people and getting big”, he has appointed a management layer to control sales, logistics, finance and product development while he focuses on growth in the sectors and new markets. “It can go wrong very quickly otherwise, but the business can now run logistically without me.”

As to where he takes it next, Averdieck is looking to exploit Gü's potential quickly over the next 18 months by increasing placings, strengthening its range and, crucially, for the first time, marketing the brand. He predicts this year's £7m turnover will double in 2006 with the capability to hit £20m.

There's been no shortage of offers to help and Averdieck says he's getting unsolicited VC calls weekly and has had a number of offers from larger companies. While he admits an exit is his end game, he's not interested at the moment. “I can see how I can take it from a £10m to £30mbusiness so what's the point in getting someone else involved?”

A taste for it

When an exit is realised, Averdieck admits he'll find it hard to put his feet up. “I'm a restless soul,” he says. “Could I be a serial entrepreneur? I don't know, but I've certainly got the taste for it.” And fortunately for Averdieck, it seems the UK consumer has a taste for Gü too.


Name: James Averdieck

Company: G? Chocolate Puds

Proposition: Premium pudding range

Founded: 2003 Staff: 40

Turnover: ?7m (based on ?11m worth of retail sales)

Profits: 4% (after 10% of turnover is reinvested in marketing)

CV: 15 years? experience in the food industry with Safeway and St. Ivel


(will not be published)