Annabel Palmer talks luck, liquor and a lightbulb moment with Charles Rolls, co-founder of drinks label Fever-Tree
WHILE gin may not be the most popular global spirit (that prestigious title goes to Korean rice wine brand Jinro), the world consumes 440m litres of it each year.
But back in 2000, Charles Rolls, co-founder of the mixer company Fever-Tree, was puzzled to discover that, despite there being over 150 brands of gin, there was no premium mixer to match. Fever-Tree’s products include tonic water, ginger beer and lemonade, and this year the company will grow by 60 per cent. Over 40m Fever-Tree bottles are now sold in 40 countries and in seven of the top 10 restaurants around the world.
Rolls, like many entrepreneurs before him, had always wanted to create his own company. But unlike many of his entrepreneurial peer group, it wasn’t until he reached 40 that he settled on an idea. His early career included a stint at the mining firm Goldfields in South Africa (“it was horrific – dark and dangerous”) before he left to complete an MBA at Insead, which led to a job at management consultancy Bain. “However, I still loved the idea of building something from nothing,” he says.
So when he was invited to join the startup Rockabike (an exercise bike), he leapt at the opportunity. Unfortunately, the company had a “spectacular” crash after four years because its shareholder body “was unable to get along”. But Rolls describes Rockabike as a “fantastic experience. It felt like being in a rally car, trying to drive and read the map at the same time. But it taught me a lot about running my own business.”
It wasn’t long until the startup bug struck again. A former colleague at Bain invited Rolls to join Plymouth Gin – an old brand that had long been neglected. He bought into it as a managing director and shareholder, and spent four years turning the business around from 4,500 cases sold each year, to 80,000. He then sold the company for a “substantial sum,” and knew precisely what to do next.
THE GIN AND TONIC
Like many startups, the idea for Fever-Tree came from spotting a consumer product that had yet to be successfully premiumised. At Plymouth, Rolls had been baffled by the lack of a “good tonic water” on the market, with existing offerings “just masking the gin flavours”. At a tonic tasting in 2000 to find the best in the US market, Rolls had his lightbulb moment. “I simply could not see the point in getting consumers to buy a premium gin if they can’t taste it.”
It was around that time that Tim Warrillow, who’s background was in advertising, approached Rolls to get his advice on bringing out a new range of gin. “But I told Tim it wasn’t the gin industry that needed a new entrant, it was mixers.” Warrillow had been researching the East India Company (whose army in India in the 1700s first introduced the G&T) and was familiar with Fever-Tree’s now-key ingredient: quinine.
As you might expect, friends thought Rolls was crazy, with Schwepps seemingly untouchable and Britvic dominating the on-trade market. But in 2003, the duo began what would become an 18-month process sourcing ingredients. They went to Rwanda for orange oil, to Ecuador for green ginger, and to the Democratic Republic of the Congo (DRC) for quinine. The latter comes from the Cinchona tree (colloquially termed “Fever Tree”) – which inspired the company’s name. In May 2005, their tonic was launched.
DARK AND STORMY
Most entrepreneurs look back on their startup journey through rose-tinted glasses, reluctant to dwell on the hard times. Rolls is no exception (indeed, “fantastic” is the adjective used most frequently during our exchange). But he does seem to have encountered fewer setbacks than most. Whereas many struggle to get their product onto the supermarket shelves, Waitrose approached Fever-Tree just one month after its launch, as its buyer had seen a column on the tonics in a Saturday newspaper.
El Bulli, widely regarded as the world’s best restaurant, got in touch a year later. Indeed, the only stumbling block has been with Knightsbridge restaurant Zuma. “It took over 20 meetings and seven years to sell to them. I still don’t know what the hold up was,” Rolls chuckles.
But surely importing from the DRC must have brought certain challenges? “We have over two years’ worth of the amount of quinine we need stock-wrapped in black plastic sacks,” he says. “As an entrepreneur, you have to be alive to the challenges ahead and plan accordingly.” When his Ecuadorian green ginger suppliers stopped producing due to low volume demand, Rolls bought enough to last six months, and found a company in the Ivory Coast to provide the product instead.
As for investment, the business was initially bootstrapped using personal funding (Rolls invested £100,000 in the company) and angel investment. The Waitrose contract meant they didn’t have to worry too much about keeping overheads low. And after a year, they raised £1m to grow the business, attracting external financiers with little difficulty. “It’s easier to find funding if you’ve got a track record, and I had done something very similar with Plymouth.” In 2005, the company was losing money, with a turnover of £250,000. By 2007, it was profitable.
THE LAST WORD
Its continued growth since then has enabled Fever-Tree to expand globally, focusing primarily on the UK, US and Spain. (Interestingly, the Philippines is the world’s biggest consumer of gin, followed by the US and Spain, where the market is booming.) As for the competition, Rolls thinks Schwepps should count itself lucky that Fever-Tree came along and stimulated the market. “They’ve thrown everything they can at us in Spain, launching a premium and heritage label. But like many of our competitors, they are resorting to strong mixers, not realising our success lies in the subtlety of our flavours.”
Earlier this year, LDC – the private equity arm of Lloyds Banking Group – backed a £48m capital replacement of Fever-Tree, leaving Rolls and Warrillow still holding a small majority stake. But this doesn’t seem to have curbed Rolls’s ambitions for the company. So, I ask in jest, is Coca-Cola next? Rolls roars with laughter. “Funny you should ask. Cola is a big mixer, and while we have resisted the call to bring out our own version for some time, we are launching a product with Diageo in Spain as we speak.”
Rolls thinks budding entrepreneurs should “get on and do it. It’s the implementation of ideas that is important. You may hit roadblocks, but if you’re a good entrepreneur, you’ll go round them.”
CV CHARLES ROLLS
Number of staff: 28
Company name: Fever-Tree
Company turnover: 2013 will be £24m (that’s our turnover, the value at retail is over £100m)
Job title: Co-founder and chief executive
Studied: Engineering at Imperial College London. MBA at Insead
Drinking: Apart from gin and tonic? Negroni Cocktail
Eating: Authentic Spanish tapas and hot, spicy curries
Reading: Pillars of the Earth, by Ken Follett – in Spanish. Sounds crazy, but it helps to keep me current in the language when I’m not travelling
Favourite business book: Competitive Strategy, by Michael Porters
Talents: Isn’t that for others to say?
Heroes: Wilbur Wright
Motto: “Can’t relax”
First ambition: To run my own business
Awards: Queen’s Award for Enterprise in International Trade 2013, Grocer Gold Exporter of the Year 2013, Millennium Business Award 2000, Regional winner EY Entrepreneur of the Year 2013