Building Benjys
Ian Rickwood, 37, cut his sales and marketing teeth working for Pepsi and Unilever before turning his arm to sandwiches. Having bought the master franchise rights for London from US chain Subway in 1996, he grew the estate to 13 stores before selling up in 2000 to buy the London-based sandwich shop chain Benjys for "around 20m", backed by venture capital and bank debt.
Back then, Benjys was a bit of a dog's dinner. Previous owners the Benjamin family had kept poor records of orders and employees, and although they had recently invested in a new-build factory facility in Bow, east London, Rickwood says it was poorly run and supplied just six of the 32 stores, with the rest using on-site production facilities. And although the Benjamins owned the core business, a large number of the stores were owned by subsidiaries and effectively run as separate companies. As a result, the look and feel of the stores, operational structure, and even the products, differed markedly.
"It was a wide and varied experience, and the overall quality was very variable," says Rickwood, who instituted a homogenisation process to bring the rogue outlets into line. Within six months all stores were being supplied by the centralised production facility and Rickwood had begun a technology investment programme to improve stock control and help manage the supply chain (see panel). The next focus was the stores.
Customers
"Back then, Benjys catered very much for builders, was very male-orientated, and appealed to new starters fresh from college, where money was a bit tight," says Rickwood. To broaden the appeal he changed the logos, imported brighter colour schemes, improved the cleanliness and added healthier options, such as salads, to the budget sarnies and toasties.
Women now account for 43% of turnover, up from 30% in 2000. And while value for money is still an important element of the product - even down to its Less Bread slogan - its customers are "more sophisticated". "Their demands are greater," says Rickwood. "But we still find that value is a constant requirement. They want more for less."
There is less demand for the "regular fodder" Benjys started out with, and the cheap, basic sandwiches are increasingly making way for wraps and paninis. The bulk of the offerings are now polarised around healthy options and an "indulgent" range, which uses better-quality ingredients and appeals to the less diet-conscious.
Rickwood admits the group's decision to stock Atkins diet-friendly products under the Low Carb, Low Cost banner was "opportunistic", but he says its move towards healthier products is genuine. Benjys customers are more nutritionally aware as a result of the Atkins experiment, which has led the company to introduce a more transparent labelling system, with the fat, carbohydrate and calorie content clearly flagged. The company even launched an online diet guide at the start of this year.
Plans for an organic range have yet to come to fruition, as the cost factor remains prohibitive for a company with Benjys' price points, but the idea of a Fairtrade coffee has been mooted to augment its improved coffee product, based around a 99p regular cappuccino and latte, launched last year.
Expansion Benjys' first move outside its London heartland came in 2003 with the opening of a Birmingham store, which was soon joined by two others. It now has 70 stores, with up to 15 more planned by the end of the year, including new markets such as Newcastle, Derby and York.
To support this growth, Rickwood aims to leverage the brand awareness generated by his fleet of delivery vans. Since launching in 2003 to break into what he saw as an untapped 400m market - delivering food and drink to industrial parks and remote offices - Rickwood has franchised 110 Benjys Delivered vans, and he "comfortably" sees scope to grow the fleet to 2,000.
"It's been a phenomenal success," he says. "We had demand from all over the country, and we went from new entrant to market leader overnight. We realised it would be daft not to open retail outlets in these new areas as well, but we didn't want a capital-intensive store-growth programme."
Back in September 2004 Benjys began selling regional master franchise rights under the development agents scheme. These DAs - "like regional sales managers and potential franchisees all rolled into one" - sell franchises to operators on Benjys' behalf and oversee their operation. To date, the company has signed nine such contracts. Plans to open a second production facility in the M62 corridor, near Leeds or Manchester, in about a year's time, will bring Scotland within range. "And then it will be back to infilling again, I suppose," says Rickwood.
Benjys is also taking on contract caterers like Sodexho and Compass by signing deals with vending machine firms such as Bunzl, Vendcare and Express Vending to put its products in their machines located in factories, offices and banks. The Benjys Delivered drivers then restock the machines in their "dead time". Rickwood says he's been "blown away" by the response so far, and by the end of July Benjys machines will be in more than 170 sites.
Another area of the business experiencing some "pretty decent growth" is its wholesale division, set up about 18 months ago. Although it continues to play second fiddle to the rest of the business, it has gained some notable wins, including contracts to supply National Union of Students facilities and hospitals such as St Thomas' and St Bartholomew's in London.
The future Turning Benjys into what he calls "a real hybrid company" with multiple revenue streams hasn't been easy. Just after Rickwood took over the business in 2000 "the market went soggy". The stock market crashed, and the construction industry, provider of some of Benjys' best customers, went flat. To make matters worse, major retailers such as Tesco and Marks & Spencer began muscling in on the market by rolling out smaller-format high-street stores. Rickwood responded by ramping up his change management programme, but he was effectively just running to stand still.
Five years on, and his venture capitalist backers are still around, and he expects them to stay until 2007-08 as Benjys continues to grow. By this time he expects to complete his three-year plan, containing targets like reaching 500 vans and 250 shops; and he and his partner, Emma, may also be ready to walk away and look for a fresh opportunity. "It'll be eight years for us by then," he says, apparently with one eye already on the next challenge.
Contact
