Innovation Over Renovation — Mission Ventures' John Stapleton

Fred Schonenberg
Hello everyone and welcome to the VentureFuel Visionaries podcast. I'm your host, Fred Schonenberg. On today's show, we have John Stapleton. John is a seasoned entrepreneur and investor with over 30 years of experience in the fast-moving consumer goods sector. He was co-founder of the New Covent Garden Soup Company and Little Dish, and John has a remarkable track record of creating disruptive consumer-led brands that prioritize health, quality, and sustainability. 

Today we're going to talk about his journey into CPG, the disruptive trends shaping the food industry, a unique approach of Mission Ventures in supporting startups, and his insights on sustainability and entrepreneurship. Please join me in welcoming John Stapleton. John, welcome to the show! 

John Stapleton
Wow, Fred, that's a wonderful introduction. Thank you. I hope I can live up to it. You know when people say things like that, it's wonderful to hear, but it wasn't like that then. This is all in hindsight, looking back. So, I'd like to think that everything was planned and that I knew what I was doing at all stages. I certainly didn't, but you know, 25, 35 years later, I have a few stories to tell. 

Fred Schonenberg
Can you imagine what it's going to sound like when we interview you 10 years from now? 

John Stapleton
I don't want to think about that. I don't think anybody else does either, frankly, but yeah, let's see. 

Fred Schonenberg
Very true. Very true. Well, why don't we start there, maybe at the beginning of what inspired you to enter the fast-moving consumer goods sector and how that journey led to a New Coven Garden Soup Company and Little Dish? 

John Stapleton
Yeah, I mean I kind of, I suppose, have an unusual story in that I came straight out of university and did you come to New Coven Garden Soup. So I had no prior knowledge of anything useful or sensible or traditional or anything like that at all. I guess I say this, you know, flippantly, but I guess there's some truth in it. I was in the wrong place at the wrong time. 

I just serendipitously met this guy called Andrew, and it was Andrew's idea. Fresh soup in a carton was Andrew's idea. He just didn't know how to go about doing it, and he needed help, like we all do with our ideas. And he met me. Um, we met actually in Reading University. I was studying there, for food science and technology and a master's in that, and he came there because he lived nearby and he recognized it was a center of excellence and he wanted to speak to the experts there, about the scientists, about how about doing this. And he asked a lot of interesting questions and from what I gathered they had, like, no idea what he was talking about — this mad guy with this crazy idea. 

I mean, science and entrepreneurship just don't mix, right? But they say one thing that said, "There's this Irish guy here who's finishing off his master's. Maybe he might be able to help you." I honestly think they were just trying to get rid of it because they couldn't really, kind of, said all sorts of non-entrepreneurial things like, "Yeah, well, if it's such a good idea somebody would have done it by now." And of course he was really frustrated with that. 

So we met. We went down the pub at lunchtime and we said there's a closing time, and we went drinking — actually, we were just talking and arguing and talking. There's a crazy idea of putting fresh soup in a carton. Fresh soup, to start with, didn't exist. All liquid soup was in a can back then. So it's kind of: why would you do that? Or how do you go about doing it, and what's the point of it? Oh, yeah, I didn't even work, kicked out, like I say, you know, closing time at the pub and we had all these questions lined up. We had 12 four hours and all we had was questions. And we thought, basically, you know, the only way we could answer any of these questions is by actually doing it. So we did. 

I had nothing to lose. I didn't really know what I was doing, and, as it turns out, you know, they knew that, Andrew. But I'm a great believer in if you don't know how high that mountain is when you start out, then you're inclined to crack on doing it. When you realize it's really, really steep, that's when you think, What am I doing here? But you're so far up then, you keep going. So that was it for me. That was, you know, what inspired me to get into the food industry. That was it. Wrong place at the wrong time.

Fred Schonenberg
I love that. It's the origin story. It's so great. And I love that sort of nagging feeling of like, I have more questions here. I need to explore this, and that often is what leads entrepreneurs into very interesting territory.

John Stapleton
Indeed. 

Fred Schonenberg
So I was going to say, one of the other things is, you know, you're co-founder of Mission Ventures. How does the company differentiate itself from traditional investment firms in supporting startups within the food and beverage industry?

John Stapleton
Okay, now we've taken a big leap there. Now, Mission Ventures came after I sold my third business. I've had three businesses: two successes and one failure. The one failure was in the States, two successes were in the UK. But that covers 25 years. And then I sold my third business, and then I set up Mission Ventures.

Now, Mission Ventures, everybody thinks this, maybe we should rethink the name. Everybody thinks it's an investment firm, or it's a fund, or something like ventures, right? But it's not. It's actually more of an accelerator-slash-incubator. What we do is we don't invest, but we put a lot of effort into finding investment for early-stage food and drink businesses, or consumer-facing goods businesses, and we help them spend the money wisely.

One of the major questions, of course, in any investment, and I have other investment hats on, any business you're looking to invest in, is: How much do you want to raise, and what do you want to spend it on? So we help founders, co-founders, entrepreneurs, people at a very early stage — really at concept stage, pre-revenue, or maybe shortly after launching — figure out what they want to do to grow, figure out what they think about it, and then really tell them what the reality is: how you can grow, what you should do, therefore what you need to spend the money on, and therefore how much money you need to raise.

So, a lot of pre-raise help is involved. And then when they get the money, not from us but from others, that is investment into their business. We help them spend that money wisely. We hold their hand, make sure they get the best bang for their buck, and try to figure out what the return on investment is for shareholders so they can have this conversation with shareholders ahead of time. So they can feel wise about this. If they haven't done it themselves before, how are they going to know this?

So it's really important to help them understand where the return on investment really comes from, what they should be spending their limited amount of money on, and prove some milestones along the way so they can then go back to the same shareholders and say: Hey, look. I actually did what I said I was going to do, which is not that easy, and here's some evidence that what I said before (which was an assumption) is now actually reality, and I do know what I'm talking about. So give me some more money. 

And if that's the case, the investors will say, Sure, how much do you want? So the idea is to help those small businesses get money, spend it wisely, and have a proper investment strategy that they can follow over time. That's what we do for small businesses now. We have worked closely with larger businesses too, I talk about. But we kind of play two sides of the coin. We help small businesses directly; we help larger businesses indirectly. 

Fred Schonenberg
Maybe we'll come back to the large business question in a second. One of the things that struck me, and I think why we did the huge jump, right, 25 years, is I'm very interested in whether there are inconsistencies in terms of the advice that you give founders that maybe came from those three companies you founded. If there's something that is a learned insight from those first three that you find yourself consistently telling your founders.

John Stapleton
Oh, yeah, loads of things. If you have to really put my finger on the one that's the most important of all, and I think maybe Covent Garden is a good example of this, and Little Dish too, and even the business at Fatoosh too, which was also a fresh food business in the Bay Area in California, that point is really: don't be a slave to the conventional wisdom.

I think so many ideas are knocked on the head by people who are slaves to conventional wisdom, certainly in large businesses. And this is what I think we're trying to help large businesses with. They figured out really good ways of being efficient and being effective and growing over many, many decades. So they kind of think, “Let's not mess with that, that works.” But actually, that is continuing to deliver the conventional wisdom.

Back in 1987, believe it or not, when we set up New Covent Garden Soup Company, all liquid soup came in a can. And that was the way that was done, and we totally were crazy to think of doing it a different way. Basically, they said 20–30 things to us that were crazy, but there are three things that stuck in my mind. They said, first of all, if you don’t sterilize the soup which is what canning is all about, it's ultra-sterilizing, it kills everything including the flavor and the nutrition, but it kills anything that could be in there that will do you harm, give you food poisoning or kill you obviously so it makes it very safe. They said to us, and I was a food scientist so I understood them, they said, “If you don't put it through a canning process, that's why all liquid soup is in a can. You will kill somebody.”

Well, when we sold the business 10 years later, we had sold about 50 million cartons of soup, and we hadn't killed one person at that stage, to my knowledge. So that wasn’t true. And then they said…

Fred Schonenberg
John, that's a really good KPI for anybody in the food business.

John Stapleton
Don't kill anybody. Yeah, exactly, exactly. That was kind of the basic step. So we went, we took it seriously. Obviously, we wanted to develop a process that was not going to kill anybody, not going to make people ill. So we developed the whole process, and that's where I came in at the time, and we patented the process, and we made a novel product. It was great, it was wonderful looking back on it now. But at the time, to get over the hurdle of people saying, “You'll kill somebody,” we had to make sure that we weren't going to kill somebody. 

But the whole point was: don't even do it, because you will kill somebody. So making soup is all about canning. But that is the conventional wisdom. And then they said, “Don't put it in a carton because people won't know. Milk goes in a carton, you know, don't be silly. And why would you put soup in a carton?” And the thing that people loved about it was the carton, in the end, it turned out. And then they said things like, “You're putting soup in the chiller. Why would you put soup in the chiller? It's a stupid idea. It's already a destination point, it's called the soup aisle. It already has a name, so why mess with that?”

But one of the things was reinforcing the conventional wisdom. We wanted our soup to taste of, funnily enough, the ingredients we put into the soup, right? Actually, I have a carton here from an earlier call, you know, this is the carton. You put soup into the carton and didn’t pasteurize it, didn’t sterilize it, but we wanted the soup to taste of the ingredients, not have the process that was used to make it safe, which, you know, was the flavor of canned soup. It's a different product. It just tastes like canned soup. Fresh soup tastes of the ingredients you put into it. 

And those are objective. Once you do that, you can't listen to conventional wisdom. You have to have the courage of conviction to say, “No, I think this is a great idea,” and really importantly, those are the people who think it's a great idea too, and they'll buy it and they can make a business out of it. Well, it's not just a hobby. It's actually a business proposition.And I think that's the one thing I'd say — it's different. Everybody's idea is different, in different categories and different industries, of course. But the conventional wisdom ties you down time and time again, and there's lots of reasons for it, why people cling on to it, and it's good. I'm not saying don't do that. But if you're going to do something new and be entrepreneurial and creative and innovative, you gotta leave that behind.

Fred Schonenberg
So maybe that's an interesting transition to some of the work you do in and around the larger enterprises, because they're built on conventional wisdom, right? They got big for a reason, and it's about efficiency. They had an insight maybe that was novel at the time, and then it's efficient, efficient, efficient, and they created that conventional wisdom and that's where their stock price comes from and the revenue. How do you innovate in and around and with larger companies like that?

John Stapleton
Yeah, and that's the other thing that we do at Mission Ventures, I hope quite well. And, you know, don't get me wrong, I'm not saying that there isn't a place for a large corporate food industry. Of course there is, with all the problems that it brings. But of course it works really well at lots of times. And when I'm talking to entrepreneurs and saying don't try to compete with the big guys on price or efficiency, because that's not where you can win, you can never ever win. But you can win on other things. And you can win on being entrepreneurial, fresh to market, interesting ideas, understanding the consumer, being entrepreneurial, moving quickly. And I think that's what a lot of smart larger businesses get. 

So let me come back to some examples we have there, but in terms of Mission Ventures, we've got loads of projects. I can choose from three I can think of very quickly. And then people will recognize these in the UK certainly, maybe overseas to a certain extent. But there's a large company called Warburton's, which is the largest bakery in the UK. They make lots of bread, lots of different kinds of bread. They're very good at making bread. In fact, they just bought another bread company, so they're even bigger than they were when we started talking to them. And we sat down with them and we said, like, okay, being more entrepreneurial, they love that idea, but what does it really mean? 

Okay, well, what we decided to do between us, we at Mission Ventures, went out and found lots of small businesses that had something to do with baking. Now it could be bread, but it's unlikely, because Warburton's does all the bread. It could be biscuits. It could be cookie dough. It could be baking snacks that are healthy versions of stuff that would otherwise be fried, you know, it could be anything. So you can stretch it as far as you want. 

Somebody that has a business idea, business proposition, and brings those businesses to us and has them pitch, do what we do, help them prepare for what investment is all about, have them pitch to us and we'll decide which ones to invest in. Then we set up a little joint venture between Warburton's and ourselves called Batch. Warburton's put money into it and we then invested that into these small businesses. 

Obviously, we're on the inside helping them to then invest the money wisely, spend the money wisely, and come out the other end. Now, what Warburton's get from that or what any large corporation can get from that is getting closer to smaller businesses but keeping it at arm's length, so they're not managing; we're managing. We're dealing with all the headaches. We're all ex-entrepreneurs ourselves, so we know what that world is like. 

So we're dealing with those guys, and we're trying to keep them close but not too close to the large corporation so they can understand. And they can actually send their rising stars to go and sit on the board or spend some time with these young guys, understand entrepreneurial thinking, pick the good bits that they don't want to work at home, bring it back to the business and incorporate or hothouse it. And of course, if they want to actually invest in the business outright or buy the business outright, they've got the benefit of five years’ due diligence sitting there, watching this business all the time at arm's length. 

All the investment is off-balance-sheet, so they don't take any risk. If it goes belly-up and is tough, that's not great, but it doesn't affect them because we are in the middle; we're managing it. So it's de-risking, and those businesses, those corporates who really get that, who recognize there is a place for entrepreneurship without upsetting what they do really well. You know, you don't want to suddenly go, "I'm going to be an entrepreneur tomorrow," and then your share price goes down because you don't hit your quarterly numbers, because it takes a while to get good at this and get efficient at this. So we sit in the middle, helping and facilitating the good bits, keeping at arm's length the bad bits, if you like, or the watch-outs, and managing the process. 

And the other example, too, I can talk about: we did a process with a project with Sainsbury's on Thrive that helped their diversity and inclusion supply into Sainsbury's. Basically, we went out to find lots of businesses started by Black entrepreneurs. They had very poor representation of that sector of society. We found 10 more for them. And then we worked with a hospital called Impact on Urban Health with the Good Food Project. We went out to find businesses that could develop healthy versions of existing stuff. 

It's a big problem to fit into right now; everything seems to be unhealthy. Not quite true, but we helped the small guys with really interesting ideas, business ideas, business propositions, to bring new products to market and to understand how they can do that with the charity, and the charity brought money to help that actually work. We, you know, sprinkled that magic dust in the meantime to help the business spend the money wisely. So that's what we do. We bring small and large and try to get the large business absorbing the benefits of the small business while not ruining the small business in the process.

Fred Schonenberg
Yeah, what… maybe with Warburton's example… We've certainly seen a lot in the States, right, of these types of partnerships where it seems like there's some enthusiasm around innovation, entrepreneurship. They spin something up, and then when the core business is under threat in any way, this disappears, right? And then the way it was brought to me was this idea of, uh, "Is the juice worth the squeeze?" 

Like, what's in it for the big company besides the, like, "Oh, we're close to entrepreneurship, and we're going to absorb some entrepreneurial thinking here"? How do they justify it up the food chain of the investment in something like this? 

John Stapleton
Yeah, I mean, that's great. Is the juice worth the squeeze? Is the pain worth the benefit? And you know, as an entrepreneur, you have to ask yourself that every day, never mind purely in an entrepreneurial world.  All I can say is you have to believe that there's some benefit in entrepreneurship. You have to understand what you do well, and ring-fence that, make sure you keep doing that, but also understand the things you don't do well. 

How quickly do you do innovation? Or is it renovation? Is it just, like, twiddling around the edges of the stuff that you've got already, or do you do real innovation? Do you really talk to your consumer, or your customer to know what they need? A lot of the time, I'm not saying all large organizations are like this. In fact, Wobblins were not; they're very smart about what they do well, what they what they would like to do more of. But a lot of organizations are quite arrogant about this. "This works." It's your point earlier: look, the last 20–30 years have been great. Don't knock it. "I'm the guy." And that's great, but up to a point. Then you have to realize where you can grow. And if your growth begins to slow down, then, OK, how can you recharge that growth? 

And then you answer the question of is it just worth the squeeze? Is the entrepreneurial effect worth it? Because you can very easily ruin your business by becoming too entrepreneurial, and then people don't really get it or don't really understand it. Or a lot of naysayers saying in the background, "I told you you shouldn't have done this, I told you this was a bad idea, now look what's happening." And, you know, "It's all your fault." So you've got all these kinds of emotional things going on in your business that you really don't want to get into. That's what we recognize.

We thought if you can do it at arm's length by reducing the risk. So guess what? If one of these businesses that we invest in goes belly up and goes bust and what, 60% go bust in the first year anyway? And 90% go bust anyway, you know, you're talking about a handful. Hopefully with our insight and our mission map and Mission Ventures' help and assistance, hopefully we'll be able to right those odds a little bit. But nothing is guaranteed in this world. So if something goes belly up, you want to be able to kind of say nothing about it, if at all possible. And it's so small in the overall mix of things, it doesn't hit the headlines because it's off balance sheet and it's really Mission Ventures and it's nothing to do with Warburtons. So it's easier enough to do that.

I think the issue really is when the pain comes, when you're trying to bring that business into your own business as a corporate entity and then absorb them into the business. And they've got like 10, 20, 30 million dollars' worth of revenue, or pounds of revenue. Then they're worth that; they're worth paying attention. And then that's often the case where you put so much attention and you squeeze it to death, because you try to, instead of going this way, you go that way, and you bring too many checks and balances to bear, and corporate governance, and all the things that are important but not to the point of overshadowing the entrepreneurial nature of the business you've brought in. Yeah, so I think the trick is, and at that point, it's really hard. Is the juice worth the squeeze at that stage? I don't know. That's further down the line. And, you know, Mission Ventures helps you get there but doesn't actually get it done for yourself. 

Fred Schonenberg
Yeah, very simple. So you're at the forefront of the FMCG world. What challenges do you see for entrepreneurs or even large companies innovating in this space today? 

John Stapleton
I think the issue is always about consumer insight. I mean, I could talk earlier about having the courage of your conviction, and that's all well and good. It's easy to say, but it's really difficult to do. And the courage from it comes from doing stuff yourself, and the conviction comes from really understanding what the consumer wants. So I think one of the mistakes entrepreneurs can make a lot of the time is thinking they know the consumer very well, because a lot of the time, guess what, you give up your job and you decide because you're so frustrated, you can't find this thing.

You say, "If only this thing existed." Guess what, I'm just going to do it myself. So you're making the product for yourself, which is great to get started with, but it's a big mistake to think that you then are the customer and you're only making products for yourself, or the insight is yours. You're one, or maybe a handful of people that maybe think similar to you. You've got to go out there and really understand what the customer wants. 

I think that's where innovation starts from. Innovation is, there's no point innovating the product because you can think of a better way of making it or a cheaper way of making it or it'll just be a better product because you think it. It likely won't be of any relevance to the customer. You have to have a very clear target market in mind to start with. And a lot of people think, "Oh, I can sell this. Fresh soup." Right. I remember, you know, people saying, well, you can sell fresh soup to everybody. I said, well, yeah, we might be eventually. But we're not trying to sell fresh soup to everybody. We're trying to sell soup which is fresh to people who really appreciate the product and the freshness and the quality. 

And we're not trying to compete with canned soup. We're not trying to eat their dinner, literally or otherwise, or eat their lunch. What we're trying to say is that people who don't buy canned soup will buy our soup because our stuff is different. Right? So we had a consumer insight and we had a very clear target market in mind. And I think if you try to sell to everybody, you end up selling to nobody. So you really do need to understand that. And you need to develop your brand around all of that. 

So brand and marketing and consumer awareness, innovation, all hang together. So I think the answer to your question is: what should people do? The flippant answer is to innovate better. How do you do that? Well, insight, really understand, chase out these customers and bring it as narrow as you possibly can. Don't worry about selling it to everybody. Bring it as narrow as you possibly can and really delight those guys. And then after a while, you find that other people will catch on to this. And if you broaden that, suddenly you have a, you know, like we had a market share all to ourselves in the first few years. And you know, Covent Garden Soup Company 40 years later is still the market leader. So something was right there.

Fred Schonenberg
Yeah, it's really interesting anchoring in that consumer insight. We have a guest whose episode hasn't been published yet, Jim Weber, who's the CEO of Brooks Running Shoes. He essentially brought that company, and it was doing 60 million in revenue, built it to 1.7 billion. Warren Buffett, Berkshire Hathaway invested in it. And he said the whole thing was anchored on the consumer. We realized performance running shoes were the thing. And if we could serve that niche, we didn't need to do all the things that Nike did, right? It was sort of this David and Goliath story.

John Stapleton
And this is a great example. I'm going to mention it now and forgive me if I do but basically Rapha, the bike brand. I know people who ride bikes. Rapha is R-A-P-H-A, a wonderful Italian originator. Anyway, a very successful entrepreneurial breakthrough brand. Purpose-driven brand, did a lot of things right. And then Walmart bought it and ruined it because I have no idea why they ever bought it. I mean, nothing wrong with leaving it the way it is, nothing wrong. Walmart does those things wonderfully. 

But the whole entrepreneurial spirit about really being in touch with the consumer, the customer really liking and aping almost the identity of the brand and becoming the brand and being eager to know what comes out next, suddenly it's not Rapha anymore. It's Walmart. I think, oh, how boring is that? I don't want to be associated with that brand anymore. I go somewhere else. And of course by then the competition had begun, and lots of little guys and they went to them. And, you know, the revenue went down, the share price went down. 

Well, it was owned by Walmart then. It's really difficult to buy emerging brands and successfully bring them into your business, never mind actually being perceived by the target audience that first made it succeed, that's okay. They were perceived to be selling out. They were perceived to be doing all sorts of things which Rapha customers didn't want them to do. And they ruined it for everybody. Although the guys got out quickly, I guess they didn't care.

Fred Schonenberg
Well, so let me ask you to play that out a little bit. What does Walmart do then, right? Because Walmart wants that intimate connection with a certain subset of a consumer, and maybe they did not have the Italian biking enthusiast. Right? And they said, hey, that's the only group that doesn’t go to a Walmart, the Italian biking enthusiast. If we buy Rapha, we're going to expand our market. We'll be able to sell them all the other things that we sell. What is a Walmart to do in a scenario like that?

John Stapleton
Well, I think the decision is too late. Once they made the decision, I wouldn't do it. And it's so easy for me to sit here after the event and go, you know, put it all together. Any idiot could have come up with that plan. Well, nobody did in Walmart. There are so many cases that people spoke about it at all, “Well, I could have predicted that.” Well, did you? You know, it's easy to say it after the event. Like much of my career, I've got to admit, it's all post-rationalization.

I’ve got to think that Walmart usually are pretty good at understanding who the consumer base is, but they've got such a large organization, and they're a retailer, of course, really, so they have lots of different brands under their umbrella. I'm kind of thinking, I spent some time in the States. The noodle business was a soup company that didn't actually work. It's based in California. That's why we didn't supply Walmart, but lots of other large U.S. retailers. And I kind of think, I think you need to let the little brand do its own work and not be too associated with it. 

In other words, be a retailer. You know, they're very efficient, obviously, very large, very efficient, very good at what they do. They really understand that people come through the front door, what they want to buy, and they can upsell lots of other stuff. But they bought the business. I think you don't need to buy a business. They're looking at adding revenue in lots of ways outside of retail. It's difficult to do once you get to a certain critical mass. You know, you can do partnerships with other brands of a similar size, but getting to own those businesses, especially when that business is, in hindsight at least, identified as something completely different to the monolith that Walmart has become, I think, you know, from the other side of the fence, understanding your consumer is so important as well. And if you think that's a great business, I think, “I'll buy it.”

Well, that's a great business for them and the way they do it. I wonder, if I buy it, will it still work the same way? At least they were hoping they could, you know, they could help. Don't just have it work the same way. So I think, strategically, we need to understand what your M&A policy is and what your strategic plan is. And it's not always easy at the moment. Have you got the shiny object, which is really sexy, and you're probably paying over the odds? I think they did it anyway. 

I think you really need to know how you're going to then milk it and how you're going to turn it, how you're going to absorb it. And in hindsight, it doesn't look like they had a plan, because if they had developed some scenarios, this would be one of the plans actually what happened and then they would have gone, "What are we going to do to avoid that happening?" To me, the answer is don't buy.

Fred Schonenberg
Very interesting. So let me bring you back here on this. One of the things I always love, the role that you're in, you're seeing all the startups that are emerging. You're seeing some large company points of view as well. What do you see on the horizon for the fast-moving consumer goods market? Are there things you think, if someone reads or listens to this five years from now, that's going to be a big thing that we don't know about today? 

John Stapleton
Yeah. So, crystal ball. I don't know if my crystal ball, frankly, is any better than anybody else's. But I think there's a structural problem in the food industry, and I was talking to somebody about this the other day. And that is that, I know we've got food poverty, so I don't want people ringing up and writing in and saying that guy doesn't know what he's talking about. Apart from maybe I don't. But food is too cheap. That's ultimately the problem that the food industry has. 

Food is too cheap. I will give you an example. What's an example? It's just… it's a fact. In 1955, discretionary spending on food that you eat in the home was thirty-five percent. So thirty-five percent of your discretionary spend, up to your rent or whatever you do, the discretionary stuff you've got left over, thirty-five percent of that was spent on food that you eat in the home.

Now, if you roll that forward to today, go back to 2020, because we have had a lot of food inflation since COVID, but in 2020, it was seven percent. So it's gone from thirty-five percent to seven percent in kind of a lifetime, or certainly generations. And I kind of think both are wrong, right? I think the pendulum sits probably somewhere in the middle. So therefore, seven percent, basically, we have all become conditioned to, especially in the UK and other countries too, it's not a lot different, to food being ever cheaper. We just assume that food can be cheaper. 

And the problem that that generates is two things. Number one, the food industry tries to cut corners to save costs. So you end up with all these scandals happening, I don't know, you know, the horse meat scandal and the dye scandal, and also, you know, people just don't know what's in food anymore and rightly complain about the fact that it's poor quality and it's not very healthy. And of course, it's been re-engineered to be cheap, because people aren't prepared to pay enough for it. So that's kind of the reality. 

So the second problem is that the margins are very low. And when margins are very low in that industry, lots of problems that don't attract necessary investment. You don't necessarily attract the best people like tech does. You don't necessarily have an opportunity to invest in the brand. You need to grow your business. If you've got a small, small, small margin, at some point, if you're really ambitious and really want to grow your business, you have to invest ahead of the curve in your brand. You've got to bring money in from outside. So you're constantly distracted raising. You don't need to in other industries, maybe. It very much depends on what your objective is. 

So, a long way of saying that, you know, a lot of problems in the food industry stem from that. And I think when people say price matters, but not as much as it did before, I don't see that much evidence. I think price still matters. I think value is even more important, especially through branding and premiumization. If you can give consumers, again, consumer insight, if you can give consumers really strong reasons to buy a product at a five, ten percent premium to the competition, then that's an interesting conversation to be had. 

You've got to do it authentically and be credible. And you can't just bullshit them, frankly. You've got to have reasons, not that you believe, but that they believe. I mean, so you need to understand what they mean. So it's all about product range. It's all about product quality. It's got to taste good. We've gone down this road of sustainability. We've gone down this road of health. And a lot of the time it doesn't taste good, so it doesn't really work. 

The price premium is a new standard. I think people are prepared to, as much as they were before, pay premiums for, pay more for premium, pay more for sustainability, like carbon emissions and fair trade certifications. They're all standard. People, the organic people, don't want to pay for stuff anymore. Used to be the case twenty, ten, five years ago. We were all, "Organic? Great." They still say, "Organic? Great," but give it to me for the same price as the other stuff. So that's the problem. So these price pressures and retailers don't help but the consumers become accustomed to food being cheap.

So I think it's actually a bit different five years' time. I think that the brands that really figure that out, because brands are, you've got to watch out here, used to establish a brand like New Covent Garden and people are very loyal. I think consumers are much more fickle now and they're looking for reasons to justify the price. So I think, you know, there's a terminology called… What's it called again? The say-to-pay gap. What people say and what they do, what they pay for, are two completely different things. 

And I think sustainability has been a great example of that. "Oh, yeah, you've got to be sustainable. Absolutely. I mean, you've got to save the planet." "Well, it's going to cost more." "Oh, no, no, I'm not going to pay more." Well, how are you going to save the planet then? "Oh, you've got to find a way to save the planet and do this and be cost-effective and be healthy." And all those pressures together put a lot of supply chain efficiency and productivity pressures, and all those people have got to continue to do that.

The industry needs to continue to do that. But I think don't rely on the things that got you to win before. And I think focus much more so on what the consumer wants and what we need to pay for. I think there's always going to be a need for brands. I think it's all about innovation back to the previous question. Innovate where you deliver value to the consumer. So if it wasn't important before, and it was, it's really important now to know what turns the consumer on, what really motivates them. 

But in this case, what will allow them to pay that extra 10 percent? Whereas before, it might have been an easier argument. But I think today it's much more difficult. And I think it'll be much more genuine and authentic and be clear about it. And so it's not easy. But I think maybe in five years' time, you could see more brands who still survive being effectively doing that.

Fred Schonenberg
John, I love it. Thank you so much. Where can people go to learn more about Mission Ventures?

John Stapleton
Oh, right. Well, I mean, Mission Ventures is one thing I do, but of course, yeah, or follow me. Yeah. Yeah. Well, I mean, there's a number of ways to answer that question. If it's particularly Mission Ventures, what I was saying about earlier from a small business or a large business point of view, it doesn't matter, look up the website: missionventures.co.uk. We’re there.

Or just DM me. Look me up on LinkedIn. It's John B. Stapleton. That's easy to get hold of me. You'll probably find my email address there. It's very easy: john@stapleton.eu. Just my name. But DM me on LinkedIn and I'll eventually get around to responding, and we can have a conversation about something that triggered you and you want to know more about it. Love to. Love to.

Fred Schonenberg
Awesome. Well, John, thank you so much for everything you're doing to spark change in the industry and for your time today.

John Stapleton
Not at all. You're very welcome. I hope it made sense, everybody.

Fred Schonenberg
Oh, yeah.

John Stapleton
Thanks a lot, Fred.