Gusto Telecom managing director Joe Bennett on inauspicious beginnings and bright futures
Gusto Telecom managing director Joe Bennett (pictured) is in high spirits as we sit down in his office to discuss the company’s first five years of trading.
He’s quick to reveal the latest sales figures for mobile accessory products from June and several months before that. They make extremely encouraging reading.
In June, Gusto led the mobile charging market, accounting for 9.2 per cent of all products sold through UK retail – double from a year ago and up from 6.4 per cent in May.
Its sales share in the power bank market also doubled from the previous month to 13.1 per cent, with its sales value share up from 6.7 per cent to 12.9 per cent.
As the company’s Juice brand is regarded as a gifting choice and usually stronger around Christmas, these are supposed to be the company’s “quiet months”, so the uplift would normally raise an eyebrow or two.
However, Gusto has signed a number of retail deals Tesco, Asda, Sainsbury’s, Argos and Halfords, which has helped drive a 30 per cent year-on-year sales increase – the biggest the company has ever experienced.
Bennett is also confident it can continue its momentum that it will almost quadruple its share in the mobile charging market to 35 per cent by the end of next year. This will be achieved by adding to the retail partners across the range of sectors it serves and increasing the 16,500 individual stores it sells through, improving its product offering and widening this across different categories.
“If you consider some of the companies we are competing against, most of which have a massive global presence and have been household names for a while, the numbers we are doing are quite incredible, he beams. “We have won a massive amount of business recently, which is really driving our sales.
“We sold around 40,000 Juice units through retail in June and if we could continue over a 12-month period, it would hit close to half-a-million over the course of a year.
“If we can continue this momentum by increasing our mobile phone charging range and adding more retail partners, I don’t see why we can’t account for 30 per cent of all sales in this sector by the end of next year.”
However, it’s not all been a bed of roses for Bennett and the business he established in August 2012, and difficulties in getting it off the ground left him fearing that he had made the biggest mistake of his life.
He reveals he was “let go” from his previous two roles, firstly as sales director of Brightstar Europe and latterly as managing director of Shebang Logistics Solutions.
He admits he wasn’t great at listening to his bosses and was convinced that he had better ideas to help drive the respective businesses forward, which convinced him to change tact and start his own business.
“I wasn’t very good at taking instructions and always thought I had better opinions,” he says. “Even though I was working for amazingly talented businessmen, I was frustrated that they were making decisions and that I wasn’t.
“I had always wanted to have my own business and always had that burning desire. I always found it frustrating making money for other people and I didn’t want to do that.
“I was 36 years old, so it was now or never. I believed in what I wanted to go and try to do.”
This didn’t come without its early problems though. Bennett was attempting to start a company from scratch as the financial crisis still lingered over the UK economy, but he needed significant capital to get it off the ground.
He approached HSBC, Royal Bank of Scotland and Barclays, which all turned him away, before approaching Lloyds in a last-ditch attempt. They reluctantly agreed to put their weight behind a “high-risk” start-up.
However, it said he would have to put his house up against it and as he wasn’t married and owned the property with his then partner, she would also have to make the same step.
Bennett saw an opportunity in the mobile accessories market and in particular the mobile power segment, claiming it was “bland, boring and exactly the same as everything else”, adding he didn’t think his competitors “were doing a good enough job”.
The idea behind Juice reared its head as he was having his breakfast at home one morning, looking at a carton of juice and making the links to mobile power.
Juice let loose
Mobile News was one of the first to see the Juice carton for its first charging product days after the business was founded, and we were impressed, but not everyone shared the same enthusiasm.
“The people that I worked for wouldn’t listen to me,” says Bennett. “I mentioned the Juice carton to my most recent boss at Shebang, Iain Humphrey, and he said it would never work. I also showed it to another industry contact and he said retailers would never take that as they were the wrong shape for their shelves.
“I backed myself and signed into the personal guarantee to put my house on the line. You have to back yourself or you’re cooked.”
Despite this positivity in the face of adversity, more stumbling blocks lay ahead for Bennett and Gusto, to the point that everything nearly crumbled around him just months after launch.
He was desperate for a retail deal to get the company off the ground and had contacted everyone he could think of, but without success.
These were dark days for the company. Bennett had borrowed £100,000 from Lloyds, lost £40,000 of it just a few months in and was left with a small office, a few staff and an inactive warehouse.
One day in particular sticks in Bennett’s mind that left him wondering if he had made the worst mistake of his life and was going to lose everything that was important to him.
“Forming, running and growing this business is the hardest thing I have ever done in my career. I’m only now taking a breath and realising what has happened.
“There was a point leading up to Christmas in 2012 where I was commuting each day from Oxford to Coventry. I had just had my first daughter. I was having a terrible day and it looked like the business would go under if something didn’t change.
“I drove back home with tears streaming down my face, wondering what I had actually done. I thought I was going to lose it all. I was down but still felt there was light at the end of the tunnel. I thought I might go bust but never thought about giving up.”
Finally, after numerous voicemails to John Lewis, he was about to get the change he had been hoping for, and a matter of weeks later, was invited to their offices in Victoria, London in November 2012 to pitch his product to buyers in a Dragons Den-style format.
However, in a scene more reminiscent of Mr Bean, Bennett got off the train at Paddington to be told that the London Underground line he needed had been suspended, leaving him in a race against time to make his 15-minute slot.
He had three miles to travel in 30 minutes. Getting a taxi was an option, but the queue was far too long, so he decided to run there in the rain and used Google Maps for directions. This wasn’t optimised, and took him in the wrong direction for a mile-and-a-half.
He arrived 20 minutes late, with his cardboard Juice cartons soaked, to be told he had missed his slot and would have to wait 12 months for another opportunity.
“I knew full well that in 12 months time I wasn’t going to have a business as I was already losing significant money each month because I had started with a big overhead.
“I actually needed to do something, and quickly. The junior buyer saw my face drop, took sympathy on me and and a couple of hours later said they could squeeze me in for 10 minutes.”
John Lewis effect
On November 7, 2012, he received the call he had been waiting for, with John Lewis willing to launch the Juice brand in their 41 department stores and online, taking 5,000 units with exclusivity for the Christmas trading period.
The chargers flew off the shelves, with the retail giant selling out of the product, which went onto appear in the Observer and Sunday Times newspapers in the lead up to Christmas.
“At that point, I knew I was onto something and I should spend more time looking at this brand to grow it. I was hounding every retailer imaginable and it became easier once we got into John Lewis. They called me back – they were actually interested.”
It was certainly the catalyst for Gusto, with retailers far and wide recognising the potential the chargers and the Juice brand could provide.
Gusto struck its second major retail deal in December 2012 with Dixons Store Group (DSG) which agreed to range the product across 298 Currys PC World stores. The following weeks saw agreements struck with O2 and Three.
Gusto continued its relationship with John Lewis after signing a deal to exclusively sell its new Juice Cube power bank and Bluetooth Sound Square speaker products in April.
Bennett had doubts at the time as to whether the Juice carton concept would really take off.
“I genuinely didn’t know. It was a gamble but you never know if something is going to sell to consumers until you have the product in stores and it’s merchandised. I liked it and was trying to be different.”
However, after a year in business, despite more retailers taking notice of the company, Bennett regards the period “utterly miserable and really hard”.
Gusto made a profit of just £40,000 in that 12-month period in what he describes as “the hardest £40,000 I have ever earned in my life”.
That didn’t stop the business though, and in February 2014 Gusto announced it planned to treble staff numbers from 16 to 50 before the end of that year and relocate to a new 20,000 square foot office and warehouse in Banbury – double the size of its previous premises in Coventry.
At that point, the retail deals were continuing to roll in, with Juice products on sale in more than 2,000 individual outlets as agreements with Staples and Sainsbury’s were confirmed.
The move and expansion in staff geared the company up for expansion across multiple channels over the coming months.
Fast forward to April 2016 and Gusto picked up arguably one of its biggest deals to date – this time with EE – which would see it range products across its then 550 high street stores and online.
It would sell Gusto’s power banks under the Juice brand ultra-fast charging products under its Super Juice brand. It would also range a number of wireless chargers compatible with the then recently released Samsung Galaxy S7 and S7 edge flagship smartphones.
Two months later, it was announced the two companies were teaming up again, this time for the Glastonbury Festival, which EE sponsors.
Gusto manufactured the Juice Tube Power Bank, which was available to buy in advance of the event via EE’s website for £20. The price included access to a daily swap service on-site, meaning they could exchange their product once it ran out for a fully charged one each day at one of the ‘Exchange’ cabins.
This partnership continued at this year’s showpiece – more than 40,000 Juice Tube Power Banks were swapped by revellers requiring power for their mobile device.
Bennett, who labels the partnership with EE as “hugely important”, says: “We work incredibly well with the EE creative and marketing team. We deal with Paul Thomas, who totally gets the brand and what Gusto is about. Having that working relationship allows us to get the best out of both businesses.
“Many large organisations are often scared of taking a risk but the fact that we did an exclusive power bank with EE that was the only one ever launched in the UK, that had fully biodegradable packaging with poppy seeds included in the packaging, proves they are willing to try different things and are brave.”
However, Bennett is well aware that Gusto cannot solely rely on the Juice brand to continue to drive the company’s growth, and has begun expanding into other areas.
Over recent weeks it has signed ‘own-brand’ deals with Sainsbury’s, Argos, Halfords and clothing retailer Urban Outfitters, stretching across more than 1,000 UK stores. He is also looking to strike agreement with the likes of Top Shop and other outdoor pursuit companies.
These deals see Gusto supply products to these retailer partners, provide them with bespoke packaging and allow them to plaster their own brand on it.
Bennett defends not being able to put Gusto’s own brands on these products as he feels retailers’ own brands can work in synergy with a leading consumer choice brand.
“This year we have seen a really big growth in own-brand products. Due to the design skills and creative talent in the business, we’re going to retailers and saying: “We have this amazing supply chain, buy millions of units for the Juice brand and Gusto is really good at supplying the products out to market. Retailer, why don’t we work with you on your own brand proposition?
“Gusto is set up to buy mobile phone accessories amazingly well from great factories in the Far East that we audit, check regularly and supply into UK retail. We do that for the Juice brand so there is no reason why we can’t do that for other people’s brands as well.
Those retailers will be ranging Juice as well so we think they should have a strategy of having an own brand proposition because their brands are stronger than most out there in the mobile market, as well as a consumer choice brand which is Juice, the market leader.
Gusto is readying a power bank that can charge an Apple MacBook and is in the process of establishing charging brands for vaping – research from consumer analyst Mintel in March revealed that among people that have quit smoking, 62 per cent are using e-cigarettes.
It will also launch its screen protector brand, Dragon Glass, early next year, with more of these typed of products and smartphone cases to be rolled out in the first quarter.
However, much of Gusto’s focus in the lead up to Christmas will be on headphones.
It has just launched entry-level product Bubble Buds into Halfords, as well as the female-focused Harmony brand into Boots, with more products and retail partners expected to be added in due course.
Bennett is convinced this is a fast growing area of the UK mobile market, and industry statistics appear to back up his theory.
In June, consumers spent more than £34 million on mobile phone accessories, with almost a third (31.6 per cent) of that spent on mobile phone headsets with Bluetooth. That has been fairly level for the first six months of 2017.
“Headphones is our main focus for the remainder of the year and is an area we are pushing heavily into,” he says.
“Almost a third of the total spend on mobile phone accessories was made up of headsets with Bluetooth, so we are working hard to get them into as many retailers as possible by Christmas.”
In line with the company’s continued growth, Bennett is also looking to almost double headcount from 30 to 55 by the end of next year, with the company also looking for plots of land in surrounding areas to build their own purpose-built facility.
He is aiming for Gusto’s sales to grow by half next year, by 30 per cent in 2019, through international expansion (see box out) and introducing more brands in different sectors.
Speaking to Mobile News shortly after the business was established in August 2012, Bennett said he wanted to grow the business as much as he could before he steps away from it, either from the daily management role or altogether.
Despite admitting to receiving “offers” for Gusto, he is having far too much fun and with the boom period it is experiencing, he isn’t ready to take that step just yet but admits that it gets to a point where it got to a size of employing around 100 staff, this may change.
“Grow the business and market it for sale so I could go and do something else. It is still my plan at some point to bring in a third party to the business and drive it forward.
“We have had some offers but we have a brilliant balance sheet, so it would have to be a really compelling offer. The business is in its infancy and we have so much growth to achieve.
“If we employed 100 people, I’m not sure I would enjoy running it so I would either appoint an MD that would be better skilled to run a business like that or sell up.”
Bennett is sticking to the claim he made two years into the business, that he wanted Gusto to become the largest seller of phone accessories in the world.
Recent figures for the UK from June, outline its dominance in the mobile phone charging market, and suggest it is cracking its home country, although Bennett knows there is still much work to do overseas.
However, he feels the target is still achievable, and feels Gusto has an advantage over most companies in the market because it has the ability to perform multiple operations.
When asked how they class themselves, Bennett labels Gusto as a “super distributor”, adding “we are a manufacturer and distributor all in one. We go well beyond what a traditional distributor does because we have manufacturing and brand capabilities.
“There are some really good logistics houses but they are just moving stuff around and solving problems that retailers have.
“While we can do logistics, we are also a brand and design house, marketing agency, point of sale designers, distributors, manufacturers so we have all of these different things that form the business. That gives us the edge which is why we are knocking everyone else out of the way.
“If we can be the largest seller of mobile phone accessories in the UK, then I see no reason we can’t do that in every country we enter into. We are going up against globally recognised companies that make billions of pounds, so why can’t we beat them? Who can stop us?
“We plan to go into every possible market and take share from our competitors because we are fresher, younger, more ambitious and more consumer focused.”