John Stapleton: Food king's recipe for success

"Almost to a man or a woman, nobody's preparing properly in the UK for Brexit. "

It’s a stark commentary. But businessman John Stapleton is a straight talker.

"The UK food and drink industry, particularly SMEs, has been frozen, has been paralysed for the last two years as to what to do about Brexit, " he says. "They just sat around ignoring the elephant in the room because it's too awkward to deal with."

As an Irishman who has founded and run businesses in the UK and the United States but who has, for the past 15 years or so, lived in Germany, Stapleton brings a somewhat unique perspective to the Brexit debate.

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And as an investor in and consultant to food companies, Brexit has, for him, been a hot topic since the referendum vote.

“They [British companies] weren’t ready for it. The problem is they’re still not ready for it,” he says.

“The Irish attitude has been ‘we have no control whatsoever over Brexit, but it’s going to happen. Do you know what, we better bloody well get ready’. And the English are saying ‘well we’re in control of Brexit, we’re negotiating it’ but, of course, when you talk on any level of industry, they don’t know what’s happening either.

“There is no difference between the industry in the UK and the industry in Ireland in terms of Brexit, apart from Ireland has spent the last two years doing a reasonable job of getting ready. And the UK still is not. They still kind of think, ‘well I still don’t know what form of Brexit it’s going to be, so I’ll just wait and see until it happens and then I’ll get ready’.”

For many, Stapleton argues, that will be too late. It’s anathema for a man who spends most of his time these days ensuring young companies are prepared for the challenges of the market.

Stapleton hails from Co Roscommon, You mightn’t have heard of him by name but the chances are that you regularly use a product he invented – fresh soup bought from the chill cabinet of your local store.

It was the brainchild of a London stockbroker, Andrew Palmer. And Stapleton was the man with the know-how to turn a madcap vision into a whole new food category.

Nowadays supermarket shelves are stocked with with multiple fresh soup choices from Avonmore to Cully & Sully and others from the big food industry players. Back in the mid-1980s, it didn’t exist. Soup came either dried in a packet or in a can.

The starting point for me was how do we physically go about making liquid soup that is not going to kill somebody

Palmer was also a keen cook. He had a vision of a fresh soup, untainted by the sterilisation and canning process. And he lived close to Reading University, which was considered a centre of excellence for food. When he approached them for advice, they directed him to a young Irishman just finishing up his masters in food science.

“I have never really figured out how they got around to me,” says Stapleton. “I think they were trying to get rid of him.”

A polite pub lunch turned into an all-day brainstorming session. By the time the two men left for the night, the farmer’s son from the west of Ireland and the Old Etonian had the nucleus of an idea and a nascent business partnership. Stapleton brought the scientific background, with degrees in industrial microbiology from UCD and food science at Reading; Palmer brought the creative drive, the access to cash and the business nous.

Their fledgling business, the New Covent Garden Soup Company, had to start from scratch, developing a process that they patented before scaling it up in a "factory" the size of a large conference room, with equipment borrowed from suppliers.

"The starting point for me was how do we physically go about making liquid soup that is not going to kill somebody," Stapleton recalls. After a couple of months of testing the process and the flavours, their first big break came when British upmarket supermarket chain Waitrose expressed an interest in putting the soup on their shelves.

As the only people in this new product category, New Covent Garden couldn’t outsource production. But the Waitrose deal allowed them to access around £2 million in venture capital, all of which went to build a proper factory production line for a product that was safe and had a long enough shelf life to be viable. Contracts with the other supermarket multiples followed, both in the UK and Ireland, and in Europe, in the Netherlands, Belgium and France.

Today, they’d be called a market disruptor: back in the 1980s, the term had not yet been coined. They did, though, become a London School of Economics case study.

The plan all along was to sell the business and, in 1998, at a time when they were doing turnover of around £22 million they did, to a fast-growing food company, Daniels, which was itself subsequently bought by US food giant Hain Celestial. Even heavily diluted over the years by VC money, Palmer and Stapleton did well out of it.

It was a huge kick in the teeth because, frankly, you come out of a success like New Covent Garden in your early 30s and you kind of think you know everything about everything

Palmer exited the food sector. Stapleton, who had retained the rights to use the technology they had developed moved to the US, seeking to replicate his success.

Like many others, including Tesco and, more recently, Greencore, he found it a chastening experience.

“It was a huge kick in the teeth because, frankly, you come out of a success like New Covent Garden in your early 30s and you kind of think you know everything about everything,” says Stapleton. “You obviously don’t but you certainly think you know everything about fresh soup.”

Maybe he did, but he didn’t know the very different US market, its more fragmented nature and very different business culture. Juggling shareholders on both sides of the Atlantic, a VC partner more focused on the dotcom sector and distracted by an M&A approach that came to nothing, they ran out of money.

“That was a killer because a lot of it had been . . . done on my say, that I knew what I was doing and I was coming from the success in the UK,” Stapleton recalls.

Returning to Europe after winding up the business, the US failure drove him to seek out new opportunities. He needed, he says, to prove that New Covent Garden was neither a flash in the pan nor a success attributable to others. With his background, food was again the sector that he examined for opportunity. And he found it.

Hilary Graves was a young mum-to-be with a background in marketing and a interest in tasty and healthy, additive free meals for toddlers. Together, in 2005, they founded Little Dish, a company producing fresh, nutritious chilled meals specifically tailored to the dietary needs of toddlers.

Once again it was an entirely new market segment, bridging the gap between baby foods and adult meals. And, as with most things, its success had a lot to do with timing: it was around the time that Jamie Oliver was beginning to bang the drum about childhood obesity and healthy eating in childhood. Waitrose was again the first major retailer to come on board, followed shortly after by Tesco.

By the time the fast-growing company was sold in 2017 to a US private equity group Profile Capital in a £17 million deal, Stapleton, now living in Germany, had stepped back from the day to day management of the business but was still a director and a shareholder.

He has leveraged his experience, working as a non-executive director for start-ups and early stage growth food businesses.

And as he mulled his next move, that experience as a non-executive director pointed the way. The UK and Ireland have been the focus of what Stapleton calls an explosion of entrepreneurship in the food and drink space this decade. But, based in Germany, he knew establishing another UK business himself was a non-runner: instead he has leveraged his experience, working as a non-executive director for start-ups and early stage growth food businesses.

New business owners can find themselves distracted from the bigger picture as they grapple with the myriad details of getting a business started. Stapleton sees his role as helping them to avoid mistakes that can undermine a young company and to recognise opportunities that might be missed.

He is now involved in a portfolio of young food companies. In some, he became an investor/director, bringing the “smart money” – cash and industry experience – that can be so vital to start-ups.

In either case, two factors must be right for him – the product has to deliver what the brand promises and the there has to be chemistry with the person behind it. “Everything else can be wrong and you can fix them,” he says, “but not these.”

It was through one of the companies he was working with, Irish confectionary group Broderick’s, that he first came into contact with Bord Bia. He now works with the state agency as a business adviser to food start-ups in its FoodWorks programme designed to make highly promising young companies investor-ready.

“People think, oh, it’s a semi-state body and maybe it’s not very practical but it is excellent; its really good,” he says, noting that the absence of a similar body in the UK is “conspicuous”.

SME owners haven't got time, but I keep telling them they need to make time because Brexit is an opportunity

“If I had access to that kind of programme when we were setting up New Covent Garden, it would have been a lot easier. It would have been a great help in not making so many mistakes,” he says.

And Brexit, he argues, has brought out the best of the agency. Stapleton currently spends a lot of time in the UK giving talks and conducting workshops on Brexit, trying to advise businesses of the need to step away from the politically charged environment and knuckle down to planning for the risks it might bring.

“SME owners haven’t got time, but I keep telling them they need to make time because Brexit is an opportunity,” he says. “You can turn it to a competitive advantage if you prepare properly for Brexit and your competitor doesn’t.”

Bord Bia deserves huge credit in this regard, he says, getting out in a very proactive way to small business, especially in the food and drink sector over the past two years with its Brexit Barometer which assesses individual company’s risk level and offers advice on how to mitigate it.

It’s a message he’s taken personally to Theresa May’s head of business relations, Jimmy McLoughlin, pointing to the Bord Bia template and noting that British SMEs are either “crying out for help or they don’t know they need help and they are going to be crying for a different reason when it is too late”.

“I was saying ‘look at what the Irish are doing, you don’t need to reinvent the wheel here guys’.”

Not that he underestimates the peril of Brexit. Without the planning, for Irish firms, it would have been a “complete nightmare”, he says. And now? “Probably only a small nightmare.”

“There’s no winners with Brexit. It is a completely and utterly unnecessary distraction which will only end up with both Ireland and the UK being at a disadvantage compared to if it never happened. That’s the fact.”

CV

Name: John Stapleton

Age: 54

Position: An food entrepreneur, with three businesses behind him, he now describes himself as an investor, a mentor, an adviser and a speaker.

Lives: Outside Munich with his partner Julia .

Outside interests: A former Irish international triple jumper – "one of the reasons I went to UCD in the first place was that they had the best track and field facilities in the country at the time" – he says he has rediscovered the joys of activity, be it cycling, skiing or hiking.

What you would expect? He's passionate about food. "Back when I was in college, it was a very uncertain world. There were no real jobs. Food seemed a safe bet because people were always going to have to eat."

What might surprise? He co-founded the New Covent Garden Soup Company but no longer eats soup. "Between 1987 and 1998, I ate enough soup to last me, you and everybody in this room a lifetime. We would make 12 to 15 different flavours a day and you have to taste it obviously. I don't order soup when I go out to a restaurant anymore. I'm all souped out."