James Averdieck: A Piece of Cake
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James Averdieck built his luxury dessert brand Gü into a high-profile company turning over £50 million. Having sold the business, he tells GrowthBusiness about how he is carefully considering his next move.
James Averdieck built his luxury dessert brand Gü into a high-profile company turning over £50 million. Having sold the business, he is now carefully considering his next move.
James Averdieck is ready to start again. His luxury dessert brand Gü was sold last year for around £35 million and, following the sale of a stake he had retained, he is now a free agent, plotting a new venture. He remains pretty relaxed about the challenge ahead, however.
He is certainly giving it another go at an interesting time. In the face of massive government pressure on business innovators to do their bit for the much-heralded private sector growth, how does Averdieck feel about Britain’s entrepreneurial spirit at this point in time?
‘The status of entrepreneurship is pretty good in the UK,’ he says. ‘I come across a lot of people doing their own thing or planning to do their own thing. As a country we’re quite an innovative lot. But many talented people still expect the government to do more to help businesses, while the government is in somewhat of a financial straightjacket.’
Averdieck was at the Downing Street launch in March of StartUp Britain, a government-supported website initiative designed to provide start-up resources for new enterprises, but which has been much criticised for its approach of merely linking to other content rather than offering original and topical material itself. How does he feel the government is approaching the process of nurturing business values?
‘Let’s be clear that the government is not really able to help with your business but rather provide an environment conducive to business. The best way they can do that is to reduce taxation and red tape, and I think that’s what they’re doing.’
He doesn’t see much difference in government attitudes towards enterprise since 2003, when he founded Gü. ‘The last government came unstuck by getting into massive debt. But I think they were pro-business and this government is pro-business too. There’s now more of a focus on entrepreneurs as the creators of new businesses perhaps.’
He doesn’t believe there has been a major shift in thinking since the change of administration, however. Averdieck came up with the idea for Gü while working for butter and spread maker St Ivel in Belgium. Regularly enjoying the chocolate desserts in patisserie shops, he started thinking about how he could capture the idea in a brand and market it in Britain.
‘There wasn’t really a ‘dinner party solution’ on the market in the UK at the time for high-end desserts, and that’s what I became focused on creating,’ he says.
The Right Branding Ingredients
He approached a marketing agency to look after his branding. The result was an enticing, dark box evoking a decadent, indulgent treat.
Named Gü, it meant nothing in any known language but hinted at continental sophistication. Averdieck sneaked some cardboard mock-ups of the branded packaging into an outlet of Waitrose to gauge consumer reaction. It wasn’t long before shoppers registered interest in the boxes, prompting Averdieck to take the plunge.
Starting up with £100,000 in seed capital, Averdieck teamed up with a supplier of delicacies to airline catering for product manufacturing, and it grew rapidly from there. Since its birth eight years ago, the business has grown to have a turnover of £50 million, with a presence in five countries. In the meantime, there has been a recession to navigate.
However, Averdieck argues that the nature of the food industry is such that global economic hardship often doesn’t bite deep.
‘As recessions go, we had a pretty good one,’ says Averdieck. ‘One thing with the food industry is that you don’t get the highs or the lows. Because we’re a real comfort food and because people were eating in more, we had a better time of it than most, but we still had to compete pretty hard.’
Proof of the pudding
The sale of the company in 2010 coincided with the controversial sale of Cadbury to Kraft.
‘We didn’t get as much for it [as Cadbury],’ Averdieck chuckles. 'But when we put the business on the market there was a lot of noise. About 80 companies registered an interest, and that was whittled down to four parties: two trade companies and two private equity. It was a pretty intense process. Throughout it all you’ve still got to run the business and keep on performing, and in our case it was all quite public so everyone knew what was going on.’
As part of the sale, Averdieck retained a stake in the company. He became responsible for developing the international side of the business, opening up outlets in Australia, New Zealand and Germany. The company is successful in France, a creditable achievement in a country with such a formidable gastronomic heritage of its own.
‘They like a dessert in France; they eat a lot of them,’ says Averdieck. ‘There, Gü is not so much about a one-off dinner party dessert, as it is in the UK. Instead, it’s much more about everyday quality. The French spend more on food than Brits, and in that respect it’s seen as an everyday product.’
After the lengthy process of cutting the cord following the sale of Gü, Averdieck started a new chapter. He is yet to discover a spark of an idea on which to formulate his next business, but seems not to be too worried. He leans back in his chair, arms folded behind his head: ‘I’m in no hurry now. The key thing is to sit back and reflect and wait for the right opportunity to come up.’
Waiting for the wave
At present, he has the relaxed air of a man turning the page on a lucrative entrepreneurial genesis – but what will be the challenges of starting again in 2011 compared with 2003?
‘It’ll be interesting to see how things are different this time. I’m better known and I’ve established a name for myself, but at the same time it’s hard to come up with a really innovative idea that’s “right place right time”,’ he says.
‘Finding that wave is tough; there are a lot of good surfers out there, a lot of smart people looking to start their own businesses, and timing is everything. In surfing, the right wave can make a fairly average person look fantastic. I would put myself in the category of slightly better than average –no freestyle champion but good at finding that wave.’
He’ll be looking to talk with as many people as possible to get the ball rolling. ‘It’s important to stay in the game and keep meeting people. All of the most important things I’ve done have come out of meetings with people. That’s the way ideas happen,’ he says. He is also at pains to point out how he will be ‘reducing the pitfalls’.
‘The biggest pitfall is to ignore the competition. Competition is incredibly powerful; you’ve got the competition you can see and the competition you can’t – which is what they’re going to do next, how they’ll respond.’ Personnel will be of paramount importance in his new company, as with his previous venture.
‘I can’t emphasise enough that getting the right mix of people is the key thing. I was lucky as I had a great team of people who made up the rules themselves. I believe in finding good people and giving them freedom.’
There is a sense that he looks forward to such a feeling of freedom in his new pursuits. ‘I’m not too overly obsessed with how big the new business is; for me it’s just about working with the right people who I enjoy spending time with and enjoying life.'