Chief Executive Officer

Case studies

When John Noel Nichols set up his family business in Manchester to sell Vimto fruit cordial in 1908, he could not have imagined that, 100 years later, the company would be a multi-million pound international business, specialising in soft drinks and drink dispensing systems.

Yet AIM-listed Nichols plc has not lost the family touch. Executive Chairman John Nichols is the founder’s grandson, and John’s own two sons are learning the ropes in the company’s UK and international operations.

“Our family still holds about 30 per cent of the company’s shares, and the heritage of being a family-oriented business, but with a very professional approach, has created a very special culture at Nichols plc”, explained John.

“We have a very open, friendly approach and encourage any member of staff to talk to the management team about their ideas for the business. Innovation has been key to our success in developing the iconic Vimto brand and identifying new brands, products and market opportunities.”

International growth

Vimto has come a long way since its origins as ‘Vim Tonic’ health drink, made from grape, raspberry and blackcurrant juices flavoured with herbs and spices. The recipe is virtually the same, but the Nichols plc business now has three divisions: Vimto Soft Drinks, Vimto International and Cabana drink dispensing. In the financial year to 31 December 2014, it made a pre-tax profit of £25.7 million on revenues of £109.2 million.

“The biggest factor in our growth is the strength of the Vimto brand. Market research by ACNielsen indicates the brand is now worth £55.6 million in the UK alone and is significantly outperforming the soft drinks market, growing at a rate of 6.2%”, said John. “We are supporting this growth with a 25 per cent increase in marketing spend, and we recently saw the launch of the £5 million ‘Seriously Mixed Up Fruit’ campaign across TV, radio, press and online media. In my view, the last thing companies should do in a recession is cut back on brand promotion. It’s important to retain market share and to be in a strong position for when the economy picks up. The food and drink sector is holding up reasonably well, since it is a necessity rather than a luxury purchase.”

Nichols plc also has the advantage of a presence in 65 countries worldwide. It has just launched Vimto in South Africa, initially through Quality Beverages in Cape Town and plans to eventually promote the range across the whole country. After 18 months of hard work and planning, Vimto has also made its debut in China, in original, cherry and orange flavours.

“Our strategy focuses on stretching the brand, in terms of product variations and geography. In addition to existing drink and confectionery lines, the product development team is researching other areas such as energy drinks. There are also further opportunities to build on the success of Vimto in the Middle East, where it is particularly popular in the holy month of Ramadan.”

Focus on people

For any family business to survive and thrive, it needs a clear vision and strong leadership. Bringing in outside expertise can sometimes be a challenge, but John Nichols is confident that the Executive Team appointed over the past seven years is an exact fit for the business.

“We worked very closely with Sue Tyrer at Warren Partners over a decade and successfully recruited the last 2 CEOs – Brendan Hynes and Marnie Millard who is one of the successful women CEOs in the FMCG sector.”

Involved in Non-Executive search for the business the brief was to find someone with the right skill set to complement the Board, and to add value in functional areas. Sue focused on candidates from a non-financial background with a broad FMCG, retail and commercial marketing pedigree and international experience.

The successful candidate was John Longworth, who had previously served on the Boards of both Asda and Tesco and is currently Director General of The British Chambers of Commerce. He was a member of the Competition Commission Panel. “John has outstanding knowledge of the UK retail sector, excellent connections and also a clear affinity with family-run businesses” said Sue. “His commitment to mutuality and sustainability were also attributes the Board warmed to immediately.”

Added John Nichols: “The key is finding the right type of person to suit the Nichols culture. Making the transition from running a FTSE 250 company, or the UK operations of a global plc, to being at the sharp end of running an entire business requires quite a shift in approach. Sue understands this very well, and her shortlists always take into account our unique culture.”

Looking after the 160+ employees of Nichols plc is another firmly established tradition. “We have all the benefits of being a public company in terms of access to finance and the ability to make acquisitions, but are still small enough to treat our people as part of a family. Everyone has objectives to meet in order to develop their career, but we reward people in other ways, too. There is a bonus scheme, and staff have the opportunity to use the company holiday home in Spain. Our annual business update conference is linked to a summer fun day, and we also have a Christmas event.”

With an ambitious growth strategy, strong management team and committed workforce, Nichols plc is clearly set to carry on enjoying the fruits of success.

Our team operates across a broad range of sectors, with a depth of market expertise in the major sectors listed below: