Of all the places you’d choose to do some business brainstorming, a children’s playgroup probably wouldn’t be top of the list. But starting up a new firm wasn’t exactly top of Meriel Kehoe’s and Lucy Woodhouse’s priorities when the two women met. ‘We were both desperate to get out the house basically,’ Kehoe jokes. ‘We came across each other and started talking about getting good food into our children’s tummies – it’s an obsession many people with young children share.’
They didn’t expect their mutual interest in finding better food to lead to a business stocking ice lollies on the shelves at Sainsbury’s, Waitrose and Tesco’s with a predicted turnover of £1.25m for this year.
The idea first grew legs when Woodhouse shared her interest in creating a healthier ice lolly after perusing the supermarkets and coming up empty-handed. ‘We hit the kitchen straight away and started trying to develop a recipe for a better lolly and were guided by our children Claudia and Fin,’ says Kehoe.
The kids also have the honour of having the business named after them – Claudi & Fin – since they were their mothers’ key tasters. The children tried a range of combinations – some of which Kehoe admits were ‘quite horrifying’, including ‘a revolting rhubarb and custard one’. They settled on strawberry and mango, which are the two flavours you see in the shops.
Fin and Meriel Kehoe with Lucy and Claudia Woodhouse
Once the flavour ideas were sorted, the nutritional aspect came to the forefront. ‘We knew we wanted to make them lower in sugar than anything else on the market [6.4g per lolly], we knew we wanted to make them with 100% natural ingredients and put good quality ones in like Greek style yoghurt and loads of real fruit,’ Kehoe says. ‘We initially planned to sell our lollies at Farmers’ Markets and grow our business organically.’
While getting ready to launch, they came across a StartUp Britain competition with Sainsbury’s, and thought they’d enter. They were picked from 400 applicants to pitch to the supermarket and won the competition. ‘We were producing 40 lollies in our kitchen and the first order was for 16,000, so we had to go from being a very small artisanal project to something on a much grander scale overnight,’ Kehoe explains.
They just used their own savings up until launch as the initial stages were fairly inexpensive, predominantly spending on ingredients. Woodhouse and Kehoe spent around £7,000 of their own money each. They then got a £14,000 loan from StartUp Loans and now 10% of the firm is held by two private investors.
The big challenge was finding suppliers that could produce the ingredients used in the volume of lollies needed. ‘Six weeks before we were due to launch, we still didn’t have anyone to produce them, so I think I got more grey hairs as a result of that than for any other reason!’ Kehoe says. Their lollies are now produced in the north of Holland by a family-run factory and are sold at £2.50 for a box of four.
After the exclusive contract with Sainsbury’s to stock lollies in 250 stores, other supermarket listings came easily. ‘I think the buyers felt it was something missing from their lolly cabinets,’ says Kehoe. ‘That’s not to say we’ve heard yes from everybody – and we’re planning on going back and reminding them just how well we’re doing in the other supermarkets.’ Claudi & Fin is just coming up to its second birthday and has doubled distribution in Sainsbury’s, is stocked at 180 Waitrose stores and is available on Ocado as well as in 460 Tesco stores. They’re launching in Londis and two retailers in Ireland too.
‘There has been such emphasis placed by Public Health England on the sugar content in the food we eat, so I’m genuinely surprised there hasn’t been more of a reaction from the food industry on this issue,’ Kehoe says of the inertia among big players in the market. ‘But I think the ice-cream industry is very traditional – there are lots of products which have been stocked since the 70s and they sell very well. I can imagine a big cheese sat up in a boardroom somewhere saying, "Well if it isn’t broke, why fix it?"’. The response Claudi & Fin has had from consumers however, suggests there’s certainly an appetite for snacks which are low in sugar and manage not to taste like cardboard.
Next on the agenda is moving out of the frozen yoghurt sphere and hitting the kitchen to knock up products geared towards those suffering from lactose intolerance and other dietary issues. Kehoe says this is all ‘in quite an embryonic stage’, and more immediately, there’s also a summer plan for crowdfunding on Seedrs to help Claudi & Fin grow faster.
‘We’re not good at celebrating milestones,’ Kehoe says of the firm’s approaching birthday. ‘I had a conversation with Lucy this morning saying we need to do something with it, but we’re too busy! I’m sure it’s typical of entrepreneurs but we never sit back and go "Well done us"; it’s always thinking about what’s next and how we can keep growing.’