It's smell to sell for the guru of Gu
James Averdieck took a simple idea and made it big. Anna Healy Fenton catches up with the king of pudding
A true entrepreneur, James Averdieck fulfilled the old adage of selling snowballs to the Eskimos by supplying souffles to the French and chocolate to the Belgians - and that's in spite of the fact that Britons are traditionally better at eating great-tasting food than producing it.
Averdieck, who previously worked in sales for British dairy firm St Ivel, started chocolate dessert company Gu Puds 10 years ago from scratch with US$100,000 of capital, built it up and then sold it after seven years for US$50 million to British rivals Noble Desserts. He stepped down as managing director of Gu Puds in April last year.
Averdieck, 46, who was recently on a British Chamber of Commerce organised speaking tour of China lecturing would-be entrepreneurs in cities including Beijing, Xian, Shenzhen and Hong Kong, says there's no mystery. 'What I did well was to find a little parking space, a niche in the market, for dinner party desserts.'
No one had really done it before. 'I found a way of doing it in a really nice chic way.' He started with souffles. 'Crispy on top, then you dig down to hot chocolate lava underneath. Plays havoc with your taste buds.'
Almost every kind of wicked chocolate and fruit pudding followed. Now someone, somewhere, in Europe is reportedly scoffing a Gu dessert every two seconds.
So why chocolate desserts? One of the many things he learnt, and part of his success strategy, was to remember that chocolate is very aromatic. The sense of smell is stronger than taste and it lingers in the memory. 'The trouble is we are all trained to eat like wolves and think about what we'll do tomorrow or yesterday. We don't really think about our food, he says. 'But good chocolate is packed with chemicals and hydrocarbons.
'Chocolate is very complicated from a molecular point of view, with lots of good flavours and aromas. With a good bar of chocolate, the first thing you pick up is the acidity, then, if you give it a bit of time, the fruitiness and right at the end, the nuttiness.'
This is because the various chemicals are released at different times, he says. Chocolate is interesting, because it has so much going on with it, like good wine or cheese.
The partners in the success story were brand and product. By his own admission, Averdieck developed 'a very nice product and then I had a very nice brand to go with it'. The way he sees it, 'with a brand you make a promise, with a product you keep that promise'.
People often ask him what's more important, the brand or the product? That's like asking which is more important - someone's appearance or personality. 'Everything goes together and I got the look and the personality just right.' As for the name, the French word go?t, meaning taste, was rejected because it was too close to the nasty disease gout, in English. Gu was considered more evocative of gooey desserts. To test the water with his chocolate puddings he smuggled Gu samples onto supermarket shelves and watched shoppers snap them up. They quickly went on sale and now feature on Virgin Atlantic flights out of London's Heathrow Airport.
'What's interesting from a financial point of view is that we only had US$100,000 going in, but US$50 million coming out, in seven years. It's got to be one of the most phenomenal investments of all time.'
The original idea was hatched while living in Brussels, which he describes as the European capital of good food. The chocolate there is quite good, he allows, though not the best in the world. 'The idea came from my local patisserie, which had a product called the Bombe au Chocolat.
'That symbolised everything I wanted to do, so I needed to find a way of wrapping that in a brand.' He sat on it for two years, boring his friends and doing nothing. Then, on a ski chairlift, someone asked him what he did for a living. 'Without thinking, I replied that I ran a chocolate dessert business - but I didn't - not yet, anyway.'
He realised it had obviously become so important to him that he had to do it. Soon after he met business partner Motty Wosner, who came up with 70 per cent capital, with Averdieck providing 30 per cent.
So what does he advise would-be entrepreneurs in his lectures? 'My message to entrepreneurs is to open up. The secret is to make connections between things, so I linked good chocolate patisserie with a range of branded chocolate puds I could sell in the supermarkets.' While not an obvious connection, it seemed logical. When looking for brand ideas he doesn't scour supermarkets, he goes round boutique shops. If he's looking at packaging, he examines how perfume and high quality personal care products are presented.
'When we're looking at branding, we're all looking for something that slightly stands out, and makes us feel good. If you can improve someone's day a tiny bit, they will ritualise your product.' He uses a product called Molton Brown Black Pepper in his morning shower. 'It's very nice, it sets me up for the day. It's the smell. But I've made it a ritual, so I don't mind spending HK$200 on this, because I know its going to improve my day. It's an emotion thing.'
Playing on smell and emotion, he did something similar with Gu, and later Fru, a range of fruit desserts. Since smell is much stronger than taste, a good chocolate smell lingers. 'You think, 'Oh God yeah, I remember that', and it reminds you of that really sensory chocolate experience.'
So the secret is using smell to sell? He nods. 'But key for any brand is to become a ritual in some way.' Newspapers do it well. 'Likewise, I'll sit down with a cigarette or coffee or gin and tonic or whatever.' All good brands get under your skin and become a ritual, and then a habit, he says, but it's increasingly difficult, because life's so competitive. That said, no one else was doing what he was doing and he thinks he improved on what had been done before. 'It doesn't have to be a whole lot better, just better.'
New brands come and go and repeat business is crucial. 'You have got to get that repurchase urge and new brands must do that or be forgotten.'
Even an apparently saturated market like perfume can be entered successfully by an exceptional product. Jo Malone is a good example, he says. It was a case of a very good product, the best bath oil and fragrance you could get and very distinctive packaging. 'And it improved your day. Her branding was very good and simple, but it's interesting that good core products underpin all brands that hang around. Otherwise they won't last. I'm a great believer that you must have everything right, all ducks in a row.'
So where to from Gu, another food venture? He says he is probably looking at food - anything 'brandable'.
Hong Kong caught his eye because of its proximity to the mainland. 'China is somewhere everyone goes, finds it very impressive, and then thinks how can I sell there? There's a huge potential for making money, but how do you tap into that?'
After his first visit to the mainland 'Bling,' he says. 'My first impression was that they are very into bling.'