Turned down by banks, hounded by hoax callers and left to fight for the brand name she’d created, Sally Preston has not had it easy. She opens up about adversity and growth

  When you’re counting on multiple retailers to change the way they do business, you’re in for a challenge. But founder of frozen baby food brand Babylicious Sally Preston is unfazed, because she’s developed a bit of a knack for overcoming obstacles. Preston is an entrepreneur who has persevered through more than a fair share of setbacks. After stumbling upon a gaping hole in the market she’s had to absorb some heavy hits from those who didn’t want her to succeed. But her range of healthy, frozen meals for babies has flourished nonetheless.

Not that she’s coasting. Quite the opposite. Most significantly, perhaps, she’s on a mission to convince the supermarkets that, although frozen, her range of baby food should be displayed where mothers expect to find it – in the baby aisles.

Triumph over adversity 

In 1999 Preston left an 11-year career as a food technologist at M&S to set up a food consultancy, with the aim of spending more time with her two children, Hannah and Jack then aged three and one. Two years later, after coming to terms with a serious illness and a marriage break-up, she decided to turn her idea into a reality. The problems she encountered only spurred her on. “If I had still been at M&S, with 2.4 children, a dog and two skiing holidays a year, I wouldn’t have made such a risky decision. But because I’d gone through a divorce and I’d been diagnosed with skin cancer, I found myself in a place where it didn’t seem, relative to anything else, risky.”

But she also had passionate belief in her idea. “When Jack came along I didn’t have time to cook and puree food,” she says, “and I thought, why does nobody make a convenient product that I don’t feel guilty about?” Conversations with friends revealed she wasn’t the only one, and they concluded that there was no good reason why no-one was offering such products.

Unfortunately for Preston, the high street banks didn’t agree, turning her down (or offering extremely unattractive terms) for a loan because they felt the idea was too obvious, meaning there must be a reason why no-one else had done it. She decided to remortgage her house and borrowed £25,000 from her parents to fund the venture. But with one hurdle cleared, another promptly took its place.

After choosing the name Babylicious, she was faced with a lengthy trademark battle, when, in the three-week period between incorporating the company and registering the trademark, someone else took the name. “It turned out they did file it in bad faith,” says Preston.

“I don’t know who it was so I’ll never know what their motives were.” Although she eventually won it back at the end of 2002, with damages of £500, the legal fight forced her to re-launch as Tastylicious. “I had to go from Babylicious to Tastylicious to Babylicious, which cost me £34,000.” A move she admits was a huge mistake. “That was a terrible name! A trademark lawyer said to me ‘how brave do you feel?’ and I remember vividly thinking ‘I don’t feel very brave at all! This feels like I’m being attacked by an unknown person’. In a knee-jerk reaction I renamed everything Tastylicious.”

Since trademark laws operate on a first come, first served basis (and it was alleged the other company was registered first) she felt she had to re-brand, but in hindsight she wishes she had taken more time and sought more counsel.

Once this issue had been resolved Preston then had to contend with a hoax caller pretending to work for the Advertising Standards Authority, who spread a malicious rumour among her contacts that M&S had lodged an official complaint about Babylicious. Being a false allegation, she was able to clear her name, but not before meetings and business were cancelled. She had to dig deep to get through it. “It’s very personal when someone is attacking you, but they haven’t got the bravery to show their face. You do genuinely think, I can’t do this.”

Securing distribution

But while she faced more than her fair share of misfortune, she had a clear advantage – and realised its true value when she secured her first trial with Waitrose in 2002. “The buyer had been approached by lots of people to do frozen baby food, but they didn’t understand the technical requirements for making it safe,” she says. But food science graduate Preston could, and what’s more she promised the same technical standards as M&S, with the use of premium natural ingredients and the avoidance of chemicals.

The Babylicious range now has a mainstream presence to be proud of, with products in Sainsbury’s, Asda, Tesco Ireland and Budgens, among others. She hasn’t had too many problems negotiating with buyers either. “It all comes down to preparation, and if you present to retailers in a professional way, about the category of food and not just your brand, and think about it as if you were the buyer, you’re far more likely to be successful.”

Production has always been outsourced to a factory that complies with the retailers’ requirements. What has proved problematic, however, is production planning, and she admits that it often comes down to taking your best guess. “You don’t know what you’re going to need to supply, so what we’ve ended up doing hundreds of times is making too much; you end up tying up cash, so you try to run it down, and then you get a big order and you’re wiped out. It’s a perpetual juggle.”

Ra i s in g b r a n d awa rene ss

Preston admits that raising awareness of the brand has also brought many unforeseen challenges. Whereas Babylicious is currently the only frozen baby food provider in supermarkets that doesn’t mean there’s no competition.

“Our competition is really any business in our area that has loads of cash to throw at brand awareness,” she says. “It’s staggering how much money is needed to support brands in food retailing. We’re talking hundreds of thousands, for trade marketing, promotional activity, buying a space in the magazine, working with the buyer to produce a plan, consumer marketing such as couponing and leafleting, radio or TV.”

A lack of marketing money is compounded by the fact that in the baby food market consumers churn all the time. Babies grow, and after about 12 months they are out of the market, so Babylicious’ challenge is to constantly find ways to talk to the consumers. “We have to keep marketing because it’s like a conveyor belt. When I first started it never occurred to me that this was essential.”

However, one promotional activity that has proved invaluable is word of mouth recommendations. “If you can persuade a handful of mothers to take a risk on your product, they will hopefully recommend it. You can do that through things like leafleting – we’ve found local press very successful – incentivise people to try it with money off.”

Preston also believes that merchandising has a major impact on the growth of the brand. Having the product where mothers expect to find it is paramount. “My passion is to get freezers into the baby aisles of all of the retailers because that’s how we grow it, because we’ve got the product where the mothers are.” So far only Asda is playing ball, but she says this is a step in the right direction.

She has also recently taken the difficult decision to outsource sales and marketing, reducing the number of staff on the books from 15 to nine. And while she admits this was a tough decision, she’s confident it was the right one. “They have the skills, the experiences and the contacts and they’re very good at it.”

She adds that sales and marketing should have been more of a focus from day one, in terms of both funding and personnel. “It’s extraordinarily tough to launch brands. In hindsight I’d say you need at least half a million to start.”

Ext en d in g th e brand

Although she feels her start-up fund was nowhere near enough, she has since made amends, securing investment to the tune of several million. The decision to “professionalise” the business – hiring staff and securing premises – followed on from awards success. “This was a monumentally fantastic achievement, because it had no boundaries, we were just deemed to be the best business in the country.” A barrage of positive feedback from mums also helped to attract investors, as did the rising profile of childhood obesity.

Preston has continued to plough revenues back into the business, so although Babylicious is not profitable this is intentionally so. This strategy has enabled the launch of two new lines: Kiddylicious, a frozen meal range for toddlers launched in 2005, and Snackylicious, a range of kids’ snacks (apple rings dipped in fruit juices and dried) was launched in Boots in August.

And she’s not stopping there. Product development is what Preston does best and she plans to take the brand, which she says will be worth about £3.5m this year, much further. “The brand will stretch using ‘licious’, which feels quite comfortable to me because it’s endless, you can play with that for hours.” She has also set her sights set on taking it overseas, and has trademarked globally in anticipation for this.

Preston insists she wouldn’t take the plunge if she had her time again – but her passion makes you wonder if this is true. As she says: “Every business has its really dark days, when you think, I can’t do this. And then you get an email saying ‘thank you, you’ve changed my life because you’ve given me back time’, and you think, that’s why I do this.”

Sally Preston has recently completed a two-year term on the Small Business Council, advising the government about the impact of legislation on small companies. She will be one of 20 leadership experts speaking at the Leaders in London International Leadership Summit 2007 on November 27–29 at Central Hall Westminster. For more information or to register for the event online please visit www.leadersinlondon.com