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From the family kitchen

Updated Wednesday, 19th June 2013

Perween Warsi, CEO of S&A Foods, discusses the challenges she faced when she started her business.

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Talking to Dr Richard Blundel, founder and chief executive of S&A foods, Perween Warsi discusses the challenges she faced in establishing and growing her business:

  • You started your business the 1980s, working from your own family kitchen. Looking back to those days, can you recall your original vision for the business?
  • Small food manufacturers are often wary of 'getting into bed' with the big supermarkets. How did you approach this major step change?
  • Could you talk us through your decision to use venture capital to finance the growth of the business in the 1990s, and your subsequent decision buy back those shares?
  • Innovation has been one of your key values—what new food trends can we expect to see over the next few years?
  • What advice would you give to the next generation of food industry entrepreneurs?
  • How might governments and other agencies support new venture creation?

Video

Perween Warsi and Dr Richard Blundel were talking after a recording of The Bottom Line.

Text

Richard Blundel

Hello Perween.  Thank you very much for talking to us today.

Perween Warsi

Pleasure!

Richard Blundel

These are really challenging times for people setting up new businesses of any kind.  I wonder if we could just talk through some of your experiences in setting up your venture over the years and how you’ve learned from those.  If we could start back in the 1980s when you, as I understand it, sort of were working in your own kitchen, you know, developing new recipes and thinking about setting up a business, what was your original vision for the venture back in those days?

Perween Warsi

If I think back a little bit and just look back my journey, I came from India, and I came with a few things with me.  My one year old child, cooking secrets and a gift from my mum and grandma that was love for cooking and passion for quality food, and they have changed my life really.  So in the ‘70s there were hardly any ingredients available, but in the ‘80s I started seeing some Anglicised so called Indian food, and I was so disappointed, it was nothing like it should be.  It wasn’t authentic and it wasn’t tasty.  So I set myself a challenge to put that right.

So my purpose of getting into this business was to improve the quality of Indian food.  So I believe that in any business that you’re setting up you have to be very clear what your real purpose is: is it the purpose is to put something right, the purpose is to make money, so that will help you to follow the right path.  And you’re right, when I started the business the times were not as challenging as today, so I started literally from my own kitchen, I tested it out, because my instinct said that I must listen to customers.  I may be very passionate about my food but will the customers find it enjoyable and tasty?

So I tested that out by selling to a local takeaway, and then it just spread from that to deli shops and the wholesalers.  But I was determined to see my products being sold nationally, and the route I saw was through the supermarket chain.  So then I started making hundreds of calls, and my determination paid off and I got a call from Asda and we got the listing, and then we set up a very small factory; absolutely tiny, slightly bigger than perhaps this room.  It used to be a car valeting garage.  Turn that into a factory and started producing snacks from there, so all handmade food as it’s supposed to be.  So it started very gradually, and then we became the victim of our own success.

Richard Blundel

Because a lot of small food manufacturers are quite wary of making that step to supplying a large supermarket, and as you said you actively kind of courted that, but didn’t you have any sort of trepidation, any worries about making that move?

Perween Warsi

Do you know there are two sides to it; one you could say ignorance is bliss, if that’s the right word, and then the other side is making sure that if you don’t know something you learn.  So I didn’t know anything about running a business, but what I did have the instinct for is making sure the food quality was right every time and the food was safe to a standard at that time.  Obviously standards have enormously changed; nothing like it used to be.  So for example I had a wooden table in my factory, which is absolutely unthinkable and imaginable now.  So I had tiles in my kitchen.  It’s absolutely and, you know, so.

Richard Blundel

Stainless steel.

Perween Warsi

So standards have changed enormously.  So the cost of entry was small, that’s what I’m trying to say.  But what we did was just didn’t sit back, so I invited a director from our local lab to come and just have a look and tell us what a food factory should look like.  So he gave his opinion and we made all the changes according to what he said the food factory should like.  So I have always been one to learn.  So you learn and you change and you adapt and you adopt depending what your business required.

Richard Blundel

Sure.  I mean just on another tack, one of the other big challenges in growing a business obviously is the finance side, and I know you went through a phase of working with a venture capital company 3i and subsequently bought back your shares and the company’s now in family ownership.  I wonder if you can just kind of talk us through just briefly that sort of process of deciding to go with venture capitalists and then decided to buy back.

Perween Warsi

We became the victim of our own success and we had phenomenal growth over the years, and with growth needed the cash, and we were running out of cash, and do you know I’m so glad that the mobile phone was not as widely available, because I still hide from suppliers, I just didn’t have enough money to pay them.  So we realised that something needed to be done.  Obviously the banks were not interested because they wanted to see four, five years track record while we were literally four, five months old in our business.  So the only way I could continue with the growth of the business was to get an equity partner.

So we sold quite a large number of shares to a plc, and they invested and we built a purpose built factory, and the relationship was very good until they went into receivership.  And it was at that time with the help of 3i that I bought the shares back from the plc, and then later in 2004 I managed to buy all my shares back.

Richard Blundel

Another of the kind of strands I think through the years of developing your company’s innovation, and you’ve made lots of changes I know over that time, I wonder looking forward are there any sort of food trends that you see developing that could be important for these future entrepreneurs in the industry?

Perween Warsi

Innovation is absolutely the lifeblood of any organisation; doesn’t matter if you’re a start-up business or you have been in business for years.  And you’re right, we have brought in lots and lots of innovation, that’s how we have grown our business, and we are monitoring trends very closely.  I mean health for one example will continue to grow.  So people are always looking of healthy food of one kind of the other.  Some are looking for lower calories; some are looking for just protein.  So there’s quite a number of themes running within the health that one should look at.  The taste bud is changing, so there’s lots of emerging cuisine, so Caribbean and Mexicans have been quite fashionable and growing.

Richard Blundel

Yes, because that’s one feature of your business is that you diversified out of Indian ethnic foods to a variety of other types.

Perween Warsi

We have, yes.  So we do oriental foods, we do Mexican, we do Caribbean, and we see that the trend will continue because people are travelling, they’re listening to cookery programmes, you know, they’re reading in magazines and people have become far more adventurous than they were when I started the business.  So I think there is enormous scope.

Richard Blundel

Finally, could I just again thinking back to our new food entrepreneurs perhaps developing businesses at this stage, are there any kind of words of advice you’d have for people trying to establish a business at the moment?

Perween Warsi

One, make sure that the product or services that you want to go into there is a demand for it, so check it out with your consumers or your customers.  That’s very important.  Once you have done that then be very focused, because we entrepreneurs get very excited with lots of ideas, because that’s what we love, so the last thing you want is get distracted; focus on it, make it happen.  The other thing I would say is that bring in someone who could mentor you or support you, because in early days you need some coaching and mentoring or business advisers.  That would be very beneficial to make sure that you’re doing the right thing, because it’s not just about coming up with the idea, but it’s making that idea happen, so that’s one challenge, and then making that idea happen and making money, so all three are very important.

Richard Blundel

And I mean I know there’s been a lot of changes in the kind of business support networks that are available to entrepreneurs in the UK in the last few years, do you think there’s anything that could be changed at the policy level that would help people setting out at this time?

Perween Warsi

In what way?

Richard Blundel

I’m just thinking that I mean there are various forms of support for, you say mentoring would be the one type, do you think there are any other changes that governments, local agencies could make to help make the environment for people starting businesses?

Perween Warsi

I think networking is very good way if there’s anything the local agencies could do, or sometimes your bankers and your advisers can put you in touch with other organisations, so networking can be very, very useful and very beneficial.  Because it’s good to work with people through word of mouth rather than go and recruit one, I always believe in that.  Because the values have got to meet, because if the values are not the same between the two individuals then you can have a clash, and that’s the last thing you want in your business to succeed.

Richard Blundel

Okay.  Perween Warsi, thank you very much.

Perween Warsi

Pleasure!

 

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