Priyanka Jethwa chats to Innovative Bites CEO Vishal Madhu about the company’s purchase of Hancocks and his ambition to become a £500m business.
Vishal Madhu’s success as the CEO of the largest sweet and confectionery wholesaler in the UK has been eye-catching to say the least. He only joined Innovative Bites full-time in 2010, but since then, the company has executed two ambitious acquisitions, first with Bonds of London on 12 April last year, then with Hancocks Holdings a year to the day later.
The rapidly expanding wholesale business now boasts a turnover greater than £200m, a goal that Innovative Bites originally aimed to have achieved by 2020. It’s now on track to smash the £500m mark “in the next three to four years”.
Madhu believes that remaining true to the company’s name is key to its operations: “It’s all about supplying original and inventive products,” he says.
Built on a workforce of more than 700 from across the UK, Innovative Bites has established itself as an American confectionery importer and distributor, supplying independent retailers with popular, quintessentially American brands, such as Aunt Jemima, Warheads and Hostess, some of which it has exclusive distribution agreements with.
The company’s long-term strategy is to diversify its offerings. This began with the Bonds acquisition, which followed four years of double-digit growth.
Madhu says: “Innovative Bites had the platform, in terms of trading with the major retailers and discounters, but Bonds was doing everything other than what Innovative Bites did.
“For example, Bonds had a different set of customers and products, being a traditional British sweet confectionery brand, so the acquisition was a step in the right direction to further what Innovative Bites could offer its customers.”
Bonds has its own line of confectionery, valued at around £10m, and it serves as one of the biggest tertiary brands that sells sweets to the retail trade.
But experimenting in the British market came with its own challenges.
“We had a lot to learn about the consumer base and what they wanted,” Madhu admits. “Luckily, we had people – including 30 field representatives – who came with Bonds, so they could guide us in the right direction.”
When first acquired, Bonds had a turnover of £42m; now, it stands at around £50m.
At the end of September, Madhu wanted to expand the business still further. He knew that if he wanted to see Innovative Bites grow more, he had to make a bigger jump and acquire another wholesaler to complete his holistic vision for the business, enabling it to become a one-stop shop.
He says: “We acquired Hancocks in just under 12 months. There were other smaller opportunities available as well that we could have looked into, but we wanted to go bigger, and Hancocks represented the perfect opportunity.”
The purchase of Hancocks created a triangle of networks over which Innovative Bites now has influence, with Innovative Bites supplying Hancocks with American confectionery and Hancocks selling British confectionery to Bonds.
This synergy between businesses allows Innovative Bites to service its customers in a unique way – instead of having multiple representatives from different companies, it can now send out one person to fulfil any customer’s confectionery needs in a single visit, improving efficiency and productivity.
Madhu says: “Buying Hancocks has given us a multi-channel platform of distribution within the confectionery market – there is no one who is now as big as us in the UK. If new confectionery brands want to get their product out on the market, they have to go through Innovative Bites, Hancocks or Bonds – they simply can’t avoid us.”
Before Innovative Bites acquired Hancocks, Hancocks had acquired two other wholesale sweet businesses: World of Sweets and Bobby’s. Bobby’s boasts a fleet of 100 vans and on average, sells its products to 23,000 customers every three weeks.
Altogether, Innovative Bites now has a grand total of more than 50,000 independent customers and nearly 800 products in its range. As it now has nearly 40 sites across the UK, including all Hancocks’ cash & carry sites, Innovative Bites can cover any part of the country in less than two hours, servicing the complete breadth of customers in the independent retail and wholesale trade, including the likes of Booker and Bestway.
Future steps will involve expansion into Europe, as Madhu says he sees potential growth in that market. He even plans to try his luck in the Americas one day. But for the time being, Innovative Bites is concentrating on developing its click & collect and click & deliver services.
As most wholesalers lean towards delivered operations, Madhu says that this is something Innovative Bites is working on as well.
“In effect, the operation will be similar to Tesco’s model where you can order online and collect from store,” he notes. “Our customers will be able to collect from their local regional distribution centre, but if they don’t have the time, we can deliver to them – and that’s how we plan to transform the business.”
Looking to future plans and potential acquisitions, Madhu explains that the business is always on the lookout with its “eyes open”. However, to grab his attention, the company needs to fit in with Innovative Bites’ vision.
“We’re not interested in any business that wants to sell out,” Madhu says. “We’re all about expanding our facilities, providing excellent customer service, decreasing risk and maintaining sustainability – the company we acquire needs to fit in with this model and better us somehow.”
In terms of venturing beyond the world of confectionery, Madhu hints that this is on the horizon. Market research, he reveals, has already been bought.
“Such a move would be in the next couple of years. However, at the moment we’re concentrating on revolutionising the confectionery category – we’re excited to be working on something which hasn’t been seen before.”
This involves working with healthier products and the latest food trends, such as products made using sugar alternatives and natural ingredients, in line with next April’s incoming sugar levy and other health concerns.
However, the biggest innovation Innovative Bites plans is aimed at “bringing the fun back into food”, an area of the market that Madhu believes has stagnated: “Everything is the same at the moment – there is absolutely no innovation by the big manufacturers – and we plan to shake things up by bringing back the novelty, excitement and originality,” he says.
He promises: “We’re going completely beyond the scale of what is out there by working with exclusive, big brands that are not currently available in the UK. I can’t say much more about it yet, but it will be a gamechanger.”
Given the company’s track record since April last year, you’ll believe us when we say ‘watch this space’, as Madhu continues to take Innovative Bites to ever-greater heights.