Founded in 2011 by Scott Davies at the age of 22, Welsh FMCG brand Hilltop Honey has grown to become the 26th fastest growing brand in the UK – and is set to have revenues of more than £16m this year. Business Leader investigates their impressive growth and future plans.
Based in Powys in mid-Wales, Davies has been the driving force behind the company’s success – however, with limited business acumen and a difficult first few years, Business Leader explored the journey the company has experienced since its origins, and how he turned it around.
From bricklayer to bees
After finishing school, Davies entered the world of construction and became a bricklayer. He also spent time in the local coal yards. However, after suffering a slipped disk in his spine, he was advised to no longer continue in manual labour.
He said: “At the age of 21, it turned my life upside down. I was lying on my parents living room floor and at times, I couldn’t get up. I lost my way, as I couldn’t do what I had always known. I had no money, but I then started to read about bees – and then my parents bought me a beehive, as they could see how interested in them I had become.”
From this initial interest sprouted a passion to start his own business: “I also always had a desire to start my own business – but I had no idea what it was going to be or when I would have to opportunity to do it. However, with everything that had happened to me – the opportunity presented itself early on in my career. I had no other option, and there was no risk. I loved beekeeping and I saw an opportunity in the market to create a company around it. No one had really captured what bees were doing for the world. I felt I could create something special.”
His entrepreneurial spirit and desire to create his own business meant a total career change and some help from his parents.
Davies continued: “In my naivety, I said to my parents that I wanted to start my own business – it was either going to be kennelling, selling stuff on eBay/Amazon or start a honey business. I told them that I would need to have three years living at home to do this – so I treated it like university. They agreed, and I did a few half day courses with the Welsh government to learn about marketing and accounting – and from there I created a really bad business plan.
“The guy who taught me on those half days helped me create a business plan and got me in contact with the local bank for a meeting. After presenting to them, they gave me £5,000 and told me I’d never sell that much honey – and that is how it all began.
“From humble beginnings, through all the challenges and hardships of creating a FMCG brand, to growing a company to have 85% of the market and owned by a billion-dollar investment firm, we have created something special. Luckily, when I started I really had no idea what I was doing! I didn’t know the hardship that lay ahead, I just made it very simple – make honey, put it in a jar and sell it. It can’t be that hard!”
For the first three years in business, the company made no money – and with that initial £5,000, Davies had to create everything from scratch, including branding, website and manufacturing the products. He did this all while keeping bees.
He comments: “It was painful. I had no business acumen at all and just went for it. I immediately learned about the struggles of cashflow and how cash moves within the business. Also, when I was investing in expanding the bees, the struggle was that it would take up to two years for them to earn back the money I spent on them. By year three, we got to £200,000 turnover and profits of just £3,000 – I was wondering where all the money was going! At the time I didn’t want to give away any of my equity within the business, so when I was trying to grow the brand and make it profitable, it was incredibly challenging. We have now seen such a rapid growth of up to 300% year-on-year – but at the time, cashflow was a struggle.”
Davies continued: “At the end of year three, I told my parents that I needed one more year as I felt we were so close to a turning point – this would be my ‘masters in business’. It was at this point that it really took off. We got stocked in Holland and Barrett, then Tesco followed soon after – then the whole world opened up.”
It was around this time that Davies turned the business onto the path of exponential growth – and it all came about from a chance meeting at a trade show.
He comments: “There was a specific day when it all changed. I had £400 in the bank and the Welsh Government said they were taking part in a food festival in London over three days. However, I could only afford one day.
“I took everything on my back, got on the train, set it up and then three girls came up to the stand hiding their lanyards. I thought they were students getting some freebies. Then after speaking to them, one of them said ‘this will really work for us’. I thought they owned a small shop, but she ended up being the Brand Manager for Holland & Barrett.
“Ten months later, we had a listing that was worth the last three years turnover. Things grew from there – that was the company’s biggest turning point.”
And when it came to Tesco, Davies changed the way they saw British honey: “Following the Holland & Barrett listing, I sent two jars of our honey to Tesco and asked them why, as the UK’s biggest supermarket, they didn’t stock British honey. It made no sense!
“They agreed and asked me to come and speak to them. They asked if I could stock in 550 stores. At the time, we were still operating out of a small factory and hand labelling our products, but I said yes.
“However, it wasn’t a domino effect from there, as each place where we are now stocked came with its own challenges. You need to find the best way to pitch your products to a specific company, and we have done that.”
Hilltop is now also stocked in Sainsbury’s, Ocado, Amazon, Morrisons, Planet Organic, Whole Foods and Selfridges.
Brexit and COVID-19
Despite the company’s rapid growth, stemming from that initial encounter with Holland & Barrett, there was no stopping the impact of the disruption UK businesses have experienced in the last two years.
Davies explains: “The pandemic, along with Brexit, were a nightmare. I honestly don’t know how we coped at times. Prior to last year, we had been doubling in turnover year-on-year for four years – we were flying. We were stocked and supplying in stores, hotel chains and lots of other places, but then the pandemic caused all of that to stop.
“However, we still managed to grow! We had a strong supply chain before the outbreak, so we could cope with the changes. I have always worked in organised chaos – which prepared me for this. Our marketing strategy had to adapt, and we ended up continuing our growth as a result of this.”
But, how were the levels of impressive growth maintained? He continued: “Through our retail listings, our USP, our reputation as a supplier – but also through growing our B2B offering as well as the traditional B2C model. Our offer is better than the competition – where it is our price, quality of product, or whether it is our supply chain – we have set ourselves apart from others in the market and it shows in our growth.
“As a business owner, you need to take every challenge, every knock back as a force for good and a learning opportunity – turn negatives into positives.”
This optimistic outlook for a post-pandemic economy will continue to position Hilltop as a market leader – however, with the ever-changing behaviours of consumers and their own focus on sustainability, what are the upcoming market developments that Davies will be looking to capitalise on, and what are the company’s future plans?
He said: “In 2022/23, we will be looking at developing more value-added products from honey and grow to become an exporter. The plan is to become a national and international brand – and we are ready for the trials and tribulations to come.
“We want to move away from just the commodity of honey and expand into new areas. For example, we have just launched a lip balm into Tesco stores because of the wax angle. We are looking at creating mead and loads of other ways we can utilise honey in new areas. Recently, we launched a spicy honey, which is new to the market in the UK.”
The team at Hilltop have their eyes set on becoming carbon neutral by the end of 2021, and moving towards being carbon negative after that. In order to achieve this they will be scaling up to a new factory in October 2021, setting themselves up for the next phase of growth.
Davies concluded: “Doing business sustainably provides ways for small food companies to innovate along their supply chain, to save money and gain competitive advantage. It opens doors to new markets because larger buyers are actively seeking out suppliers that can help them meet their corporate social responsibility targets and legal obligations.
“As a friend to the bees Hilltop runs their own ‘Adopt a Bee’ campaign in which consumers can learn further about the importance that bees have on the environment. The business donates 25% of the profits from this to the very deserving Honeypot Children’s charity.”