Bord Bia’s Brand Forum Cases in Brand Excellence
Gü Puds: Selling Soufflé To The French
Gü Phenomenon: International Expansion
In early 2010, Britain's biggest egg producer, Noble Foods entered the international
dessert market when it purchased a majority stake in Gü Puds (Gü), valuing the company
at around £35 million. Noble Foods saw massive potential for developing the Gü brand
further on the international stage. Co-founded just seven years previously by entrepreneur
James Averdieck and business partner Mordechai Wosner, Gü had already rocketed into
prominence in the chilled super-premium desserts category nationwide across the UK. At
the time of purchase Gü employed 130 personnel including 10 people in Paris together
generating total sales of £25 million. Exports to France and beyond, totaling 17 countries
including Hong Kong and Barbados accounted for almost 40% of volumes.
The award-winning brand and the company behind Gü had created quite a stir among
chocolate lovers, supermarkets and big brand manufacturers alike, not least for its
superior taste and quality or its iconic branding but also because its success in penetrating
the French market which indicated Averdieck and his team had achieved the impossible:
selling British soufflés and chocolate pots to the connoisseurs of patisserie; the French.
Gü's export success could be attributed to something more than simply mass-producing a
patisserie quality dessert, however. It seemed the company's ability to adapt its strategy of
using supermarket retailers to build a loyal customer base region by region, supported by
excellence in its marketing mix, was the catalyst that helped launch the brand on the
European stage.
In a few short years, Gü had developed cachet as an excellent brand, consolidated
through an effective marketing strategy but perhaps more importantly because of James
Averdieck's original vision. Almost single-handedly and starting with just £100,000 capital
he had transformed Gü into a brand worth €40 million in just 7 years. With the acquisition
Averdieck switched roles from Managing Director to International Business Director
leaving industry analysts to ponder what effect such a change might have on the Gü brand
as it aimed for the €100 million mark.
James Averdieck: Chocoholic
Reflecting on what distinguished Gü from competitor brands, Averdieck was assertive - “it
makes a promise and keeps a promise”. His ability to apply that thinking through to every
activity and facet of the business explained its success. Averdieck understood the intrinsic
nature of branding- how every aspect of the business had to support the brand proposition.
In the case of Gü that proposition was a sophisticated and high-quality but fun and
indulgent brand, a brand with personality, akin to Häagen-Dazs when it launched in the
1980's. And similar to Häagen-Dazs, what made Gü remarkable was that its competitors
weren't even on the same shelves in the supermarket- there simply was nothing
comparable when it launched in 2003. Gü had the rare trinity of quality, strong product
development and distinctive packaging.
In hindsight, Averdieck's background suggested he was model material for the
entrepreneur's handbook. With a family history of successful entrepreneurial activities,
James graduated with a degree in economics before he joined a management consultancy
firm, gaining experience of various industries in Europe, the US and the Middle East. He
then spent nine years working for Safeway supermarkets and chilled foods brand St.Ivel
who eventually posted him to Brussels to manage the launch of its flagship margarine
brand into an already declining market. He was 36 years old at the time.
Averdieck's eureka moment came to him one day while sharing a bombe-au-chocolat with
his wife in their neighbourhood patisserie while working in Brussels. Both self-confessed
chocoholics, they had embraced Belgian cuisine with open arms. Relishing the artisan
dessert in hand, the idea occurred to Averdieck that if he could package such fine quality
desserts and sell them through supermarkets back home in the UK he would be onto a
winner. At the time the UK market was dominated by lower quality big brand products, that
in the Averdiecks' opinion, simply could not compare in terms of taste or quality to the
patisserie experience. Purely from observation there was a gap in the marketplace for
premium quality desserts and he was confident no household brand would pursue such a
niche. His interest piqued, Averdieck set about researching and assembling everything he
would need to create a product to fill that gap.
At that early stage his focus was on manifesting the idea into a functioning product that
supermarkets and their customers would buy. Exporting was not even an afterthought and
only came about after a positive experience testing Gü's puddings in the prestigious
Parisian store, La Grande Epicerie. But that was two years down the line and over the
horizon. First off, Averdieck had to focus on more imminent and practical issues such as
identifying manufacturing partners, designing product packaging and crucially inventing a
name for his dream chocolate pudding. Essentially Averdieck set about building a brand
literally from scratch.
Building a Brand
In Averdieck's experience the key to selling through supermarkets was presenting in
person a 'ready-to-go' product and actively selling it, while the key to retaining shelf space
was rate of sale and having the logistics to support demand in the chain. With this in mind
he set about building his brand and marketing strategy.
First, Averdieck entered into a joint venture with Mordechai Wosner, owner of Rensow
Patisserie. A reliable manufacturing partner was crucial to ensure consistency in the value
chain. Rensow was an experienced contract food manufacturer specialising in airline
catering and proved adept at creating the artisan-style chocolate desserts Averdieck had in
mind. The concept was to develop a fresh product that a customer could take home, heat
in the oven and serve in minutes, passing it off as their own creation if they so wished; a
sort of instant luxury. Furthermore relatively small portions helped minimise the guilt of
indulgence, appealing as an impulse purchase.
Next, Averdieck commissioned Big Fish, a branding agency to help him develop a brand
logo, identity, name and packaging design. Wanting something continental, that conveyed
the sensual pleasure of his desserts and something with personality the agency responded
with the word 'Gu', echoing the French word for taste; 'goût'. By adding an umlaut to the
letter 'u' resulting in a smiley face they simultaneously infused the name with sophistication
and the logo with personality; Gü.
In terms of packaging it was decided to present the soufflés in recyclable glass pots
wrapped in sleek brown and black packaging that stood out from the uniform blue and
white plastic characterising the desserts category at the time. With the essentials in place,
Averdieck decided to test customer reactions by sneaking several boxes onto the shelves
of his local supermarket. Enthused by the positive responses he approached the
supermarket buyers, ready to sell his brand.
Gü's intention was to build awareness and interest through sampling or 'edible advertising'
that would spark positive word-of-mouth supported by buzz among influencers such as
food editors and 'foodie' magazines. This would be supported by on-pack promotions and
effective digital marketing, mainly through their company website. The entire strategy
remained very targeted however, focusing on busy and affluent food loving 30-somethings
as the tier 1 customers. The packaging, pricing and quality would clearly support the
desired premium positioning. Meanwhile Averdieck encouraged customer feedback via the
website to help improve Gü puddings, for example with respect to new flavours and the
redesign of the glass pots so that they would stack neatly on top of each other. In fact the
website played a central role in building a sense of community among Gü's customers with
ongoing competitions, photograph galleries, news and updates.
This attention to detail allowed Gü consolidate the niche it had carved for itself with sales
leaping to £3 million in its first full year of business. It bedded down this success through
constant and regular innovation, introducing dozens of new dessert under the Gü and
latterly Frü brands, a range of fruit based luxury desserts. While the relationships with any
supermarket chain were never to be taken for granted, Averdieck and his team believed
they had the right blend of enthusiasm for negotiations and the ability to commercialise
new products rapidly which infused relationships with dynamism and freshness- critical in
the world of FMCG brands. Explaining the source of this dynamism Averdieck was
succinct, “as a small company we can make decisions quickly. It's important to keep
developing new products and get them into supermarkets, because that's where people
buy desserts”.
France and Beyond
With sales around £10 million in its second year of business, management began
evaluating export markets with a preference for France, the UK's second largest market for
British food exports after Ireland, and home of the patisserie. Averdieck figured that
cracking France would be key to opening up other European markets. The vision was to
target international supermarket chains instead of country markets as a means of
expansion.
To do so Gü decided to first focus on France, where management believed they needed to
build customer bases regionally before launching nationwide. In any case French
supermarkets purchased on a regional basis unlike the more centralised UK model so this
approach seemed to fit best with local market structures. Before that, Averdieck knew he
needed to prove to French retailers Gü would walk off the refrigerator shelves. Fortunately
that opportunity came knocking on Gü's door late in 2005 when prestigious Parisian
delicatessen La Grande Epicerie ordered a batch of soufflés and chocolate pot desserts to
trial in their store.
Renowned for quality and service, La Grande Epicerie quickly became the company's
best-selling store, selling about 60 packs of puddings per week which was about double
the rate of any of its UK stores at the time. Confident there was traction among French
consumers, Averdieck started fine-tuning Gü's positioning and identity in the market,
wrapping his soufflés in French packaging and pitching them as 'moelleux' instead. He
also removed nearly all on-pack references to its British origins reasoning that French
consumers were quite suspicious of English food and that Gü could benefit from being
perceived as Germanic. Conversely when pitching to supermarket buyers Averdieck
focused on presenting Gü as “modern London rather than old England”, drawing
comparisons with Häagen Dazs by convincing buyers the Gü brand was trendy.
The first stage in regional growth was expansion across the Île-de-France region around
Paris. This process started with negotiations in the summer of 2006 with Carrefour, one of
the world's leading supermarket chains. Averdieck argued so successfully Gü puddings
would fill a niche at the top end of the chilled desserts category that he had to turn down
an offer for nationwide distribution preferring to stick to his original regional approach.
Launched in the region in November 2006, the company gained shelf space in 150 stores
including the national supermarket chains Auchan and Monoprix. By the following May, Gü
was selling approximately 4,000 cases per week. In July 2007 it moved across northern
France and by mid-November Averdieck and his team were ready to launch nationwide. To
support that transition Gü management decided to invest in a direct French sales
presence, setting up a 10-person office in Paris including 5 field sales representatives who
maintained daily contact with category managers in each store.
In 2008 when Gü won both the Food and Drink Exporter of the Year Award and the New
Exporter of the Year Award at the Food From Britain Awards for its successes in France,
CEO of Food From Britain John Adams stated, “Gü's story embodies everything that the
Food from Britain Export Awards are about. They are living proof that export success
doesn't necessarily require years of experience, you need to do your research, establish a
strategy and stick to it”. Sales growth was phenomenal with distribution in almost 700
stores nationwide, annual growth forecasts of 35% and potential for the company to triple
sales by 2012. At the time of writing La Grande Epicerie was still the highest selling store
among all its customers.
Marks of Success
When Noble Foods approached Gü in late 2009, the timing was ideal for Averdieck as his
company juggled resources addressing a variety of priorities. Management was preparing
to ramp up operations in order to support its expansion across Europe as well as other
English-speaking markets. Gü's products were performing extremely well in the UK,
Ireland and France and had just entered Germany. Meanwhile its sister brand Frü was
underperforming and there was the constant threat of copy-cats and own-brand products
piggybacking on their success and ultimately eroding brand equity.
As such the friendly acquisition resolved several issues at once. It provided the
springboard for Gü to target the Australian and New Zealand markets. This would be
supported by leveraging Averdieck's reputation as company founder to sell into the
region's handful of national supermarket chains. Addressing the Frü issue, management
decided to consolidate both product lines under one corporate brand Gü Puds and invest
in a major re-branding exercise including an overhaul of the packaging design and the
launch of a £2 million integrated advertising campaign – Gü's first, featuring print,
television, online, experiential, radio and public relations activities. This campaign could be
run in many markets optimising returns on investment and represented the first step of the
super-premium brand entering the mainstream.
Conclusion
Reflecting on his company's stellar performance since its launch in 2003, Averdieck put it
down to the people that helped carve out a niche for Gü Puds as a super-premium dessert
and the lack of innovation in the top end of the market. In Averdieck's estimation, “there
aren't many multinationals that have strong premium brands. 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.” With sales growth continuing in all
markets, Gü Puds looked set for continued success. It had tapped into several converging
universal trends for quality, convenience and indulgence and single-handedly created a
niche as a super-premium dessert. Using supermarket chains to help drive expansion was
an everlasting gamble mitigated only by Gü's effective marketing strategy. The retailers
could cancel purchasing orders with little notice forcing brands to perpetually innovate
some or all of the marketing mix. It was clear that James Averdieck had played a massive
role in achieving international success for the brand but opinions remained mixed as to the
future for Gü Puds as it looked to reaching that £100 million milestone.
Key Learnings For Irish Brands
1. The personal touch and experience of the entrepreneur is often critical to success,
especially when building a premium brand for niche market segments. In
Averdieck's case his knowledge of the industry's structures, forces, habits and
dynamics were critical to fast-tracking Gü's commercialisation and sales growth.
2. Inspiration and innovation can be simply about tweaking the status-quo. Averdieck
cross-pollinated two ideas to generate a compelling proposition: the patisserie style
mass market product.
3. The product innovation process can benefit greatly from reverse-engineering .
Averdieck began with vision for a patisserie style dessert one could buy in the local
supermarket. He then coordinated everything required to make that dream a reality.
Annexes
Annex 1: Luxuriant Product Shots Reflect Super-Premium Positioning
Annex 2: Gü's Website Building a Community Around Love For Chocolate
Annex 3: Gü Packaging and Advertising Building Brand Identity Around a SuperPremium Positioning