News Industry Profile Group55



Industry Profile: Group55
30th December 2014

By Sandra Pearce

The domino effect

Fairly new to the pet market, Animology has quickly made a name for itself and is growing its export markets on a seemingly day-by-day basis. Sandra Pearce visits the Preston-based manufacturer to learn more

Never in his wildest dreams did Stephen Turner think he would one day have to experiment with fox poo. Yet he did, and the result – after 18 long months to get the formulation right – is Animology’s Fox Poo Shampoo. 

Now fox poo shampoo may not be the most interesting of topics, but it serves as an effective snapshot of the philosophy that underpins the motivation at Group55: identify gaps in the market, employ local skills and talent for a solution, then make that product in the UK. So much so that 80% of Group55’s products are made in the north-west, most within a 30-mile radius of the company’s Preston base. And rest assured, the other 20% is made within the British Isles.

Stephen is passionate about British companies supporting the British economy, but he is even more passionate that companies should hit the export highway. “The key to growth and recovery is for all small companies to get stronger and export,” he says.

Right from the start, the Animology range of shampoos and conditioners was geared for the export market, and its 2010 launch was planned strategically for Germany’s Interzoo. Fifty-three enquiries were whittled down to 15-20, and today, the brand is sold in 43 countries.

Since its launch, year-on-year growth has been in enviable high double digits, and Stephen says the next 18-24 months are going to be even more ‘interesting’ as the company is about to launch into North America, and is making inroads into Asia. It recently launched into South-East Asia through Pet Lovers Centre, a pet chain in Singapore, Malaysia and Thailand, and is in final stages to launch into South Korea, a wealthy country, he says, but one in which legislation required the registration of every single ingredient in every product.

“Our business model [domestic and export] is geared around shifting boxes and pallets rather than small orders. We look to work with people who employ the reps, so we support wholesalers and distributors or larger retailers,” he says.

Lining up the tiles
When you see Group55’s premises on a 120-acre farm, nestling on the edge of the Ribble Valley, it’s hard to visualise that at the very beginning, Stephen operated from a unit that cost him £150 in rent each month. The catch? There was no toilet – strategic breaks had to be planned during the day’s diary to the Morrison’s supermarket, about a mile away.

With a knack for doing things differently, Stephen steered away from the much-touted University route and landed his first job selling lubricating solutions for a subsidiary of British Nuclear Fuels Plc, before moving over to selling CCTV into the likes of football stadiums and town centres, which taught him a lot about sales, marketing and negotiating. His life was to take a new direction when he next became a pest control surveyor for Rentokil; but he was not to know this then. At 25, he had one of those epiphany moments when he realised he was ‘being penalised for being a target hitter’: “Every year I hit my target, and then they just raised it again!”

When he read a newspaper article about the Internet and the growing shoots of e-commerce, and how this was going to revolutionise the world, he thought, “I can do that.”

So with no experience and no idea how it all worked, he jacked in his job and used the £700 he had to set up a business selling pest control products on the Internet. What followed was four years of hard slog, from 7am to 10pm, seven days a week, including Christmas, although he does concede that by year four, the business was hugely successful. By then it had an office in Orlando, Florida, and strong export sales into Europe.

One of the company’s earliest breaks came when British Gas got in touch and asked if it could distribute a lot of carbon monoxide units. British Gas was gearing up to deliver 14 million leaflets, could they cope? To which Stephen replied: “Of course!” He remembers how at the time: “There was just one employee (me) and one phone line.”

Things snowballed from there and Group55 was soon selling kitchen appliances, boys’ toys on radio and even perfumed soaps through shopping channel QVC and kitchenware shop Lakeland. But this portfolio proved too diverse and in 2007, it was crunch time as Group55 decided to streamline its product offering. So it launched its own brand of pest control Strikeback – clothed in outrageously different black-and-yellow, jump-from-the-shelf packaging – which ended up being sold in more than 2,500 stores across the UK with 30 different skus.

“We had remarkable success,” he says of their attempt to rival the big boys of pest control. But in this case, Goliath did not stay down. “We took a bloody nose,” he recalls. “We were given a text-book example of how big businesses defend their market share and business. It’s very clear there are some fights worth fighting and others that are not.”

However, during this short period, Strikeback’s flea killer had engaged with pet customers, which caused Group55 to take a closer look at the pet industry. “We knew we had to adapt to survive,” he says. Pet buyers tend to be a passionate bunch, and with his experience in chemical formulation, he saw an opening within the sector.

He explains: “We believe pet owners see pets as family members. But the products being sold were clearly ‘For Pets’. There was no obvious synapse connecting pets to family members. I identified an opportunity within the animal grooming market, in particular shampoos and sprays, as this industry was hugely under-developed. And we came up with Animology to look more like a human product.”
Even better, while one could not export insecticides due to legislation, there are no such restrictions when it comes to shampoo. The name ‘Animology’ was specifically chosen as it would ‘make sense around the world’. “Everything was geared to exports sales.”

It’s all about creativity
You can’t keep looking within industry for inspiration, says Stephen. If you do, you end up with yet another me-too product. “Our whole method is to do things differently.”

In 2010, the distinct-looking Animology range was launched to a world-wide audience and was an immediate success, he says, which has since gone on to sell more than one million bottles around the world. In its first year, it was awarded Best Pet Product in the UK. It went on to win Best Pet Product again in 2013, Best Grooming Product in 2012, and this year nabbed the Exporter of the Year title in the PetQuip Awards, as well as taking silver in Product Innovation of the Year for its Clean Sheets.

But Stephen is most proud of the 2014 FSB WorldPay North West Business of the Year Award, beating off stiff competition to be recognised as overall best small business in the North West. He explained: “As a company we are tiny, and a micro business is often seen as insignificant. But the head count of a company does not make it a good company. The smaller the head count pro rata to results is much more impressive.

“To win this award was hugely gratifying. It gave us all a great big boost. Then to win the Export Award by PetQuip, and to be told we had done the textbook case for exports, it was fantastic.”
Winning such awards also gives customers the confidence that you are moving in the right direction, he said. “Good awards are invaluable and meaningful, and the users of your products, they want to use award-winning products in terms of value to brand.”

To cap off what has been a bit of a rollercoaster ride, Stephen was also approached by HSBC to film a short video as a case study to inspire potential entrepreneurs and showcase the benefits of becoming an HSBC business customer. “They contacted us and said look, we have chosen you as one of three small companies, to show what can be achieved.”

That result is now both on the HSBC and Group55 websites. He has also been called on to give seminars on all aspects of SME business including start-up strategy, brand strategy, marketing, business survival and effective global expansion planning, speaking before audiences of UK Trade & Investment, the Chamber of Commerce and the University of Central Lancashire.

It’s not stopped there. A number of new products will be added to the Animology range over the next year, including into equine, as well as new brands. “The challenge has been to focus all our energy on pet products… I have a book full of ideas,” he reveals, there just isn’t enough time for all of them!
Such innovation cuts across the company, to how it presents and markets itself. For example, social media marketing is a well-oiled machine with close to 11,000 Facebook likes, 2,100 Twitter followers, and the highly popular International Groomer of the Month and Pet of the Month Facebook competitions. Both have resulted in brand exposure, free advertising for groomers, and so far, over 30 international animal charities have received close to £11,000 in total as part of the winner’s prize package. “For a small company it’s not a small amount,” he says. “It’s something we are very proud of.” And as a result of the groomer competition, there is now a huge library of over 5,000 ‘before and after’ shots of dogs that groomers have at their disposal.

Ultimately, at the heart of every business is trust. “Once that trust is broken you will never get it back. Retailers need support and need to be available to trust the people they are supporting.”

This trust is a two-way street, and he notes that far fewer column inches in the press are given to stories about the independent pet trade supporting the independent manufacturer. And when you throw in the Made-in-Britain factor, you stumble upon his one big bugbear: that of retailers choosing to support manufacturers that manufacture outside of the UK.

You’d think Stephen lives, eats, drinks and sleeps Group55, but you couldn’t be further from the truth. His first passion is, in fact, youth football, and he is not only an FA-qualified coach to his sons’ two junior football teams, he also has another business that is looking to revolutionise the training of young players of high potential. And like all of Stephen’s visions, this, too, is structured for worldwide implementation.

Perhaps not so much the ‘Domino Effect’ but more ‘The World is Not Enough’?