John Stapleton | Investor entrepreneur
With the entrepreneurial spirit of a small business owner and the risk-taking mindset of an investor, John Stapleton sheds light on the ‘new normal’ in the food and drink space against the backdrop of Covid-19
By Murielle Gonzalez
Resilience and discipline are two concepts that John Stapleton knows well from 30 years in the business arena, creating fast-growing consumer brands in the UK and the US – and surviving economic crisis of all kinds and depths over the past three decades.
A self-confessed small business entrepreneur, Stapleton has set up three companies in the past, all in the food and drink space, and is proud of two successful exits. These days, however, he has settled in Germany where he coordinates a network of industry contacts, working together to support start-ups and early-stage growth companies as an angel investor and mentor.
“Entrepreneurs have a way to overcome adversity because we do things differently,” he says, commenting on how the Covid-19 lockdown has changed the landscape of the food and drink sector. “We’re trying to be disrupters. We have a lot of resistance and can manage a lot of setbacks and roadblocks,” he adds.
Stapleton makes a sharp analysis of the food and drink space against the backdrop of Covid-19, and argues that this crisis has made more evident the true nature of founders and investors.
“The March/April period was focused on managing the staff, your cash flow, and trying to build a strategy to come out of the crisis,” he says. “From May onwards, business owners had to have their sight on the horizon, trying to make sense of the uncertainty while trying to understand what’s affecting consumers’ behaviour.”
Most importantly, Stapleton says, business owners have to determine what he calls ‘the stickiness’ of consumers’ behaviour in the ‘new normal’.
The ‘new normal’ of the food business
For Stapleton, some behaviour changes can become consumer trends; the plant-based movement and the interest in alternative protein are prime examples. He argues that Covid-19 has shifted healthier eating from a trend to the mainstream. “People turned to comfort food, but as the days went by, they stopped to think that the pandemic is calling for healthier eating,” he says.
Seeing immune-boosting products skyrocket is yet another sign of Covid-19 steering consumers’ preferences – the market, he says, has quickly responded to that.
“Lot of brands are jumping on the wagon of immunity with ingredients like ginger curcuma, vitamin D, zinc; you name it! But, basically, every fresh fruit and vegetable have a nutrition profile that supports your immunity,” he notes.
Stapleton also recognises that Covid-19 has sparked behaviour changes that happened overnight, with people confined in their homes turning to online shopping like never before. “Adapting to these changes in the food and drink space is paramount to the smooth operation of businesses in this period,” he says.
When it comes to overcoming the crisis, Stapleton is adamant in recognising that most, if not all the answers are in understanding your customer base.
“Look at your consumers. You have the early-adopters, the laggards and everything in between,” says Stapleton. “People will be adopting the ‘new normal’ as part of their daily routines. If you can figure out the 5%-10% of things that people will take on with them; that is your business advantage.”
Stapleton believes that business owners and start-up founders have no choice but to define a strategy for their business and pivot or adopt a new model to try and supply what consumers need. “But you have to be ready to deploy the plan in the last quarter of the year. Everything will happen in Q4,” he warns.
Fundraising amid Covid-19
Businesses entering the market for the first time in 2020 are finding it hard to secure investment. Stapleton says uncertainty, lack of credit, and low valuations are to blame.
“It’s not an easy time for attracting angel investors or even private equity,” he says. “Investors have been concentrating on supporting the businesses in their portfolios,” he adds. “There has been a huge cash problem, and the capital that is available has been put in follow-on investments.”
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For Stapleton, the uncertainty around the survival of early-stage businesses amid the Covid-19 crisis spooks investors. “It’s the risk profile, the time frame of survival, and then the consumer behaviour, all wrapped up into the uncertainty of whether businesses will manage to get out of the Covid-19 crisis,” he explains.
Stapleton also argues that there is a big disconnect between the perspective of investors and entrepreneurs, the latter optimistic and the former conservative overestimating the risks. “Of course, neither is right or wrong, the balance is somewhere in the middle,” he says.
Take control of your business’ destiny
The circumstances, the fears and expectations are changing all the time, and these are setbacks that most entrepreneurs should know how to navigate, if not by nature, by creating resilience.
“We are looking to the government to solve the Covid-19 crisis,” says Stapleton. “We see it as a country-wide problem, a Europe-wide problem, and a global problem, so we need leadership from our governments,” he adds. Stapleton admits people argue whether the leadership has been good or bad, but there is leadership.
“My point is that business owners have to demonstrate leadership as well,” says Stapleton. “As entrepreneurs, we have to take control of our business’ destiny because nobody else is going to do it for us,” he adds. “To be responsible for our business implies to really knowing what’s happening to our consumers.”
For Stapleton, taking control of your business destiny means to re-engage with your consumer, opening your business with confidence, adapting to social distancing, and working from home, and be smart about your cash flow. “Investors have been watching the Covid-19 crisis, and I think they want to see entrepreneurs who get this dynamic,” says Stapleton.
Stapleton believes entrepreneurs are really good at turning uncertainty into a competitive advantage to grow their business, and that is the best asset they have to weather the Covid-19 turmoil. “You don’t have to be better at everything, just better than your competition,” he says.
John Stapleton: A food category-setter
When Stapleton launched New Covent Garden Soup in 1987, the brand entered the market without competition. Disruptive in its essence, Stapleton’s brand created a whole new food category: fresh soup manufactured with homemade-quality natural ingredients, free from additives, colourings or preservatives. Ten years later, the business was sold to The Daniels Group.
Stapleton moved to the US and with the experience under his belt, he launched Glencoe Foods, a brand that introduced the fresh-soup-in-a-carton concept to the US. Life took Stapleton back to the UK, and he saw the opportunity for yet another business. Little Dish entered the market in 2005 with a range of natural foods and snacks for kids.
With Little Dish, Stapleton created and pioneered the toddler chilled food category and led innovation in the kid’s snacking aisle. The brand had secured shelve space in all major UK retailers, and Stapleton exited the business in 2017.
Around the time he founded Little Dish, Stapleton had already started to invest in food and drink companies as an angel investor; several start-ups and early-stage companies have his backing.
To this day, Stapleton speaks about five businesses in the UK. All five have a unique twist to the offering that confirms Stapleton’s business acumen, and eye for disruptive propositions.
“I’m an investor in Nix & Kix,” he says. “It’s a natural, low-calorie, sugar-free vegan adult soft drink brand with a cayenne kick,” he explains, adding the brand has been gaining shelf space in retail, on-trade and foodservice.
Stapleton is also on board Spoon Cereals, a range of healthy, simple and tasty alternative breakfast options, and Capsicana, a brand specialising in Latin American street food sauces.
There are a few other businesses in which Stapleton has invested in. Primal Pantry, which was sold to Nurture Brands in April this year, and Whehey, a premium low-calorie ice cream, high in protein and fibre.
Passionate about seeing businesses grow, is only natural to hear Stapleton speak enthusiastically about Mission Ventures, the business accelerator he co-founded three years ago in the UK with serial entrepreneurs Paddy Willis, Nigel Parrot, and Louis Bedwell.
Stapleton is bullish about the outlook of the Good Food Fund, the initiative backing brands in the healthier snacking space for school kids, and Batch Ventures, the corporate venture accelerator (CVA) formed between Mission Ventures and Warburtons, the UK bakery giant.
“This CVA is focused on one category, baking products, and we’ll be applying the MissionMap to help a selected group of brands grow their business,” explains Stapleton. “Warburtons will invest cash, and Mission Ventures will invest that cash into a range of small businesses on behalf of our partner,” he says, adding that companies in the venture will be able to sell to Warburtons or to exit through someone else interested in the brands.
Mission Ventures might be just another organisation on Stapleton’s agenda, but it certainly embodies the principles, mindset and purpose he has devoted to for more than three decades.