Repost: Bellamy’s Organic’s winning formula impresses on ASX debut

“But the most important thing we’ve done is develop a brand.” – Laura McBain, CEO

See original article HERE www.smartcompany.com.au Wednesday, 06 August 2014 1:42

by ELOISE KEATING

Investors have welcomed Tasmanian baby food producer Bellamy’s Organic onto the Australian Stock Exchange with open arms.

Shares in the formerly family-owned company were initially offered at $1 but trading in the stocks opened at $1.31 at 11am on Tuesday before quickly rising to $1.34.

At the time of publication, the stocks were trading at $1.38.

The strong debut has given the business a market capitalisation of more than $120 million, significantly higher than the $95 million indicated by the initial public offering.

One of the shareholders keen to secure a piece of Bellamy’s was BRW Rich Lister Bruce Neill, whose company Quality Life has snapped up a 8.62% share in the organic food producer, according to Fairfax.

Twenty-five million shares were offered in the initial public offering, with the total number of shares in the company now totalling 2.2 billion.

As previously reported by SmartCompany, the IPO also allowed Kathmandu founder and former BRW Rich Lister Jan Cameron to sell down her stake in the business.

Bellamy’s Organic managing director Laura McBain described the debut as “outstanding”, telling SmartCompany this morning the strong result “shows the confidence investors have in the Australian food industry, not just within Australia but in other countries too.”

McBain says the good news for the company was also boosted yesterday with one of Bellamy’s long-term partners, dairy producer Tatura Milk Industries, receiving official accreditation as a supplier of certified organic baby formula in China.

“This is something we had expected to occur, it’s great for us,” says McBain. “It’s a great time for us to be able to let everyone know our growth strategy is on track.”

Bellamy’s Organic was founded as a family business in Launceston in 2004, before being purchased by investor group Tasmania Pure Foods in 2007. The company produces around 30 products which are 100% Australian-made and certified organic.

McBain describes Bellamy’s journey from a “mum and dad business in Tassie” to an ASX-listed company as “an amazing story”.

“It’s a little bit of creating your own timing,” says McBain. “And you’ve got to be ready to take the opportunities as they arrive.”

McBain says Bellamy’s “started out with just a few people doing lots of things”, but over time the company has built the infrastructure and processes it needed.

“But the most important thing we’ve done is develop a brand.”

“Bellamy’s is a trusted brand and mums really engage with it,” says McBain.

“And we’ve made sure the brand is not just for Australian mums but resonates with every mum around the globe.”

Partnerships with other suppliers, such as Tatura Milk, have been essential to Bellamy’s success, says McBain.

“Partnerships are really important. We’re really good at what we do and [our partners] are great at doing what they do. It’s a great model to integrate our experience and knowledge and work collaboratively,” she says.

Janine Cox, senior analyst at Wealth Within, told SmartCompany Bellamy’s strong debut is a “great result for the people who have invested in the stock and the company”.

But Cox says it’s important to “factor in we’re in a bull market” and that can influence whether or not a stock exceeds expectation.

Cox says Bellamy’s debut also highlights the importance of timing for companies preparing to float, and believes the company gained popularity because it “offers something a bit different”.

Cox says the real test for Bellamy’s will be the in the three to 12 months after listing, as more information becomes publicly available about the company.

FMCG Motivating Consumer Choice – A case study in Authenticity

Becoming a significant premium consumer brand in FMCG when you are a start up is a lot like Australia winning Gold at the winter Olympics. Differentiating your brand and motivating consumer choice in the FMCG space is the big challenge, especially when you’re building that loyalty in the broader mass market from a niche like organic. It’s a whole new level of hard when you don’t have the budget to support mainstream media to drive brand awareness. Social media may be free to an extent (Facebook’s new obstacles to achieving reach notwithstanding) but requires a more significant investment in people costs than many people realise. In the end, it means the whole lot rides on the effectiveness of product packaging to make the clearest possible statement about your brand’s authenticity.

Originally founded as a producer of organic fruit snacks and cereals, Bellamy’s Organic needed a rebrand to allow it to succeed in its strategic intent. No one had established one consistent master brand to cover infant formula through baby food to preteen in Australian FMCG. The product packaging needed a complete makeover to present a cohesive brand presence across the range. The essential challenge to communicate authenticity was particularly important in a sector that was under growing consumer scrutiny in Asian markets, and the very meaning of organic itself was subject to increasing rigour in established markets.

The key elements to success in the packaging redesign included a number of outwardly small but critical changes that had a dramatic impact on consumer perception. The results for the Bellamy’s brand have been beyond question. On their own, 12% market share in Australia would be a great achievement (ref). When that growth has been achieved at the top of the market it provides Bellamy’s with so many more options for continuing growth.

In order to communicate authenticity around ‘best for baby’, certified organic and Australian made, a design language was developed that could be applied across the entire range, but not constrained to just baby. These changes strengthened the associations with realness, nature and purity.

A particular tone of sky blue that draws the eye in the heavily artificial environment of the supermarket was chosen to replace the original copper sulphate blue brand banner. Combined with green foliage and white, it serves as an emotionally relevant natural backdrop for the continued hero and focus – children.

Something that many Australians only realise when they re-enter the country is how much space we have. That expansive clear blue sky is the brand banner covering the top of the packaging. So we broke the rules with the use of blue that is deeply symbolic of an Australian source. Contrary to the general direction in the category the template deliberately used real imagery over animations. The realness of photographic images signals real ingredients, real food, in the real lives of consumers.

A new Bellamy’s seal was stamped on the front of each product as an affirmation of what Bellamy’s stand for. This was supported by independent certification relevant to particular markets on the back of the pack. A deliberate decision was made to make product information always as legible as space allowed. Bellamy’s are proud of their product and literally have nothing to hide. There is no fine print.

Special effort was put into communication of how the products should be prepared, as well as offering extra health information about ingredients to highlight the brand’s focus on providing nutritious food for babies and children.

A critical objective was to eliminate any sense of dissonance. Consumer choice is always and everywhere preceded by the avoidance of risk. This is more certain for parents choosing food for their children than in any other category. Therefore establishing Bellamy’s as an authentic brand demanded that we unify all these signals to leave a parent in no doubt about the credibility of Bellamy’s as a safe and healthy choice. Today, Bellamy’s stands out, as an authentic brand parents across Asia Pacific know they can personally invest in.

 

Repost: Tasmanian accountant Laura McBain took Bellamy’s Organics to a Chinese export bonanza

First published June 3rd, 2014 in Public Accountant

See original article HERE

When she looked at her revenue breakdown, Laura McBain made the decision that turned Bellamy’s Organic into a major Chinese food brand. – By Claire Heaney

Photo: source supplied

A surprise pregnancy saw young accountant Laura McBain trade the hustle and bustle of Sydney for the more sedate pace of Tasmania, in a bid to balance her fledgling career and family.

But instead of embracing the quiet life, she has ended up heading a dynamic organic baby food company that is turning heads on the international stage.

“I started my accounting career straight out of high school, and I did a cadetship with Crowe Horwath [formerly WHK] while I was at university,” says McBain.

That’s when the career plan hit “a spanner in the works” – the arrival of a baby for McBain and her husband.

Despite returning to work after the birth, the grind of the Sydney commute proved too much and the couple decide to move closer to her parents-in-law, in Tasmania. Ironically, the in-laws soon returned to New Zealand, but she has never regretted the shift.

“It is a fabulous place to raise a family and you are two minutes from the office,” she says.

Even back then, McBain says she knew she wanted to run her own business. “That was the driver,” she says.

McBain was a senior accountant at Launceston firm Ruddicks when she first encountered start-up Bellamy’s Organic.

A family business launched in Launceston in 2004, Bellamy’s was undercapitalised and its financial controller had left. McBain was seconded to the company to take over the controller’s job – and found herself unexpectedly exhilarated.

“All of a sudden, I found myself doing everything that I had ever wanted to do,” she says.

“Bellamy’s was a private company but owned by a group of shareholders … it was a bit of a pressure cooker. It was a crazy time.”

McBain says that under the secondment arrangement, she was supposed to be working four days a week at Bellamy’s and one day in the Ruddicks office. But she soon found herself working at Bellamy’s on weekends because of the workload. “It was a massive commitment,” she says. “You got caught up in the passion and you could see what it was capable of doing. It was a great brand and a great product.”

When the secondment ended, she went back to her normal accountancy job, but Bellamy’s came knocking, appointing her general manager in the first few weeks of 2007.

“I remember standing in the kitchen with my husband and saying: ‘This is such a massive, massive risk’,” she recalls.

But husband Roger McBain, also an accountant and a partner with Deloitte in Launceston, urged her to run with it, telling her she would never get an opportunity like it again.

“I managed the whole thing, answering the phones, talking to mums about their babies’ health requirements, answering questions about poo,” she says.

“Then, the next minute I would be talking to Coles and Woolworths or to the banks.”

Bellamy’s was taken over by a Tasmanian group of investors under the Tasmanian Pure Foods Ltd banner. McBain began using Tasmanian Pure Foods chairman and current Bellamy’s director Rob Woolley as both mentor and sounding board. Together they sat down and crunched the numbers. “I got to know Laura and we had the view that there was an ability to develop the business,” he says.

Bellamy’s sold off its orchard and factory to concentrate on the brand and logistics. It fine-tuned its marketing message to tell mums why they should prefer Bellamy’s to conventional products.

But the firm had bigger issues. McBain was also slowly realising that Coles’ and Woolworths’ purchases – at that time accounting for 90 per cent of Bellamy’s business – were a point of vulnerability. The supermarket giants were supportive. But if they walked away, Bellamy’s would fold.

McBain doesn’t remember any one particular “light bulb moment”, but she does recall that “there were times when products were deleted from trade – which reminded us that we were small and vulnerable and needed something big to happen to change that”.

Knowing the limits of the Australian market, they looked abroad. “The company had changed hands on the basis that we could grow this thing, so we had to look outside of Australia,” says McBain.

China was the obvious launching place. “We have 200,000 babies born in Australia every year; they have 20 million in China and the same again in Southeast Asia,” she says. “There was a huge opportunity to go offshore.”

McBain had some friends in Shanghai, so she decided to try her luck there.

“Rob Woolley and I pretty much got on a plane and met some Australians and had a look around,” she says.

“We started building a network in China with lawyers, other accountants, PR companies, and a lot of them were ex-pats,” she adds.

The organic product struck a chord with Chinese mothers looking to protect their babies, usually their only child. “We fit into the super-premium infant formula category. We are highly regarded. The mums buying it are looking for safe, 100 per cent certified organic product,” she says.

McBain, who became chief executive officer in 2011, says her work in the accounting firm, dealing with a range of micro, small and big businesses, was a big help.

“You get to see all of those ways of operation and see how these companies harness all those experiences in order to set your own goals,” she says.

A national finalist in last year’s Telstra Business Woman of the Year Awards, winner of the national private and corporate sector category and Telstra Tasmanian Business Woman of the Year, McBain says Bellamy’s is now balancing its books, with 12 per cent of the Australian market.

The company employs 30 people directly and up to 300 indirectly – “we’re a significant employer in Tasmania” – and is on target to reach $50 million in revenue this current financial year, up from $3 million in 2007.

“Half our market is in Australia and the other half is in export,” she says. “We are looking to continue to grow both streams. There is a lot of pessimism around the Tasmanian economy and future industry, and what we can do here is great, setting an example of what is possible.”

And, she adds, the best is yet to come. “We are really a baby still in terms of the food industry. This company could be a real player, a real pioneer. I would like to see Bellamy’s achieve world domination, and then I will worry about what happens next.”

– By Claire Heaney