The world of food is a 'lonely old road' - but this investor knows that 'people gotta eat'
Serial investor and former Kellogg’s Europe boss, Stephen Twaddell, talks food and drink deals.
THE FOOD AND drink business may be one of the most brutal markets to break into, but the glass half-full kind know there are still plenty of opportunities – because “people gotta eat”.
That is according to investor Stephen Twaddell, who has backed the likes of craft beer company Wicklow Wolf and juice business Sisú in recent years.
“It’s a tough industry, but people are eating all the time so there’s always a market for it,” he tells Fora.
“The challenge is finding a way to meet consumer needs and the companies who figure that out are the ones that are going to prosper.”
While having a good product is always an advantage, Twaddell says that he’s usually more interested in the person he’s investing in – he’s confident everything else can be tweaked.
“You’re looking at the quality of the person, the founder – are they the kind of jockey you want to back in a race?
“The people I’m typically interested in working with are ones who display the right characteristics for enhancing their chance of success – those who are open, flexible, and believe in their idea but are willing to take on feedback. The product you can work on – every idea is workable.”
Stephen Twaddell (centre)
Twaddell is currently chair of the food syndicate of the Halo Angel Business Network (HBAN) and hold places on the boards of Wicklow Wolf, Sisú, Java Republic and East Coast Bakehouse.
HBAN, which is backed by Enterprise Ireland and InterTradeIreland, helps groups of angel investors put money into early-stage companies, as well as contributing their knowledge and contacts.
Some of its noteworthy deals include a €722,000 investment in Wicklow Wolf and the €400,000 it put into dog treats brand Soopa Pets. It also contributed to a €700,000 fundraising round completed by sports nutrition firm Elivar.
With the food syndicate, Twaddell says it’s been a “good challenge” finding businesses to invest in.
“Obviously you’re expecting a return, so you want to invest in a business you think has got the ability to scale and go on a journey – both locally and internationally. Those businesses are hard to find.”
He says that at the syndicate’s last meeting there were 30 investors in attendance, but he’s “always looking for more people to come onboard” .
“From an investor perspective it balances your risk because you can gather together as a syndicate. Angel investment is risky and I would want to be fairly careful with how I invest,” Twaddell adds.
“With a syndicate you can pool your financial resources but also your capabilities. We have investors with different backgrounds – some from retail, some from supply chain, sales, marketing, production. It gives a more rounded group of advisors.”
‘Selling cereal out of the car boot’
Twaddell is no stranger to working in the food and drink industry himself, having spent most of his career at Kellogg’s.
He became head of the cereal giant’s European operations after 25 years and left in 2012 to “pursue other opportunities”.
“I joined as a very junior salesperson back in Belfast in 1986 so I really started at the bottom and got a fantastic grounding doing that job,” he says.
“I was literally selling cereal out of the boot of my car – that’s how we trained in those days. Then I worked my way up.”
When he left the company, Twaddell says that he was still interested in working in the food and drink industry but not in a “conventional organisation”.
“I was taken with the idea of working with entrepreneurs; taking a business from more humble beginnings, from early stages all the way to the shelf and help it scale from there,” he adds.
As well as working on his investment portfolio, Twaddell started getting involved in business coaching, working with multinationals like Facebook, LinkedIn and Microsoft.
At the moment, he’s participating as a mentor in Food Works – the accelerator programme for food and drink startups run by Bord Bia, Enterprise Ireland and Teagasc.
He says the main thing that he discusses with startups is the challenges of scaling food and drink businesses in a crowded market.
“It’s not an easy thing to do, even when you’re in a big organisation. In Kellogg’s it was a challenge every day as to how we could grow, and that was with a big brand and resources.
“When you’re a small organisation you don’t even have that going for you, so you have to be resourceful and move fast, be nimble, find ways to win when you don’t have the capabilities of the bigger organisations.
“It’s a lonely old road, food and drink is tough, so you need as much support along the way as you can muster.”
He says scaling isn’t the only issue in the current market – pointing out potential complications that could arise from Brexit, on top of the usual challenges of dealing with retailers, and changing food and lifestyle trends.
But Twaddell adds that it hasn’t put him off the industry, and he’s still keen to get involved with more food and drink businesses – either as an advisor or an investor.
“I’m always scanning the horizon for opportunities because you never know what’s coming. Nobody wants to be the person who failed to sign up the Beatles.”
