Rationalising Your Product Range
In episode #012 of The Artisan Food & Drink Business Show I talk to Mike Hardingham, co-owner and founder with his wife Barbara, of Ludlow Vineyard and Distillery, an award-winning drinks’ company based in Clee St. Margaret, Shropshire, UK.
The theme that permeates this episode of the show is product range. It will be especially interesting if you have any of the following questions: how many products should I have? How many is too many? And how will I know I’ve got too many? If I need to drop products, which should I drop?
Mike, a qualified mathematician, describes how his venture evolved from a gainful early retirement pursuit to a fully-fledged drinks’ business whose range includes wine, grape brandy, cider, apple juice, eau de vie, fruit liqueurs, and, maturing in barrels for 2017, Shropshire whisky.
Mike talks about how his product range grew and crucially, why he is rationalising it to a smaller set of core products. He discusses the craft of artisan apple juice production and the equipment he invested in for his various products. He also observes that there is a natural local limitation to the appeal of certain artisan products and points out that it’s not always possible to bring a good artisan product to market economically.
This is the first of a two-part series with Ludlow Vineyard and Distillery. You can listen to part two in the next episode of the show.
Listen Now to the Episode with Ludlow Vineyard and Distillery
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If audio isn’t your thing, you can download a transcript of the show here: Ep #012: Ludlow Vineyard and Distillery (1): How Many Products Should You Have in Your Range? You can also find the full transcript of the show at the end of this post.
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Key Points from the Show
- Deciding on your product range can be a tricky task. There’s the lure of making something you fancy yourself. There’s the lure of making something just because you can. You can quickly end up with too many products that distract you from your core business. Many of the producers I have interviewed so far (a tiny sample, admittedly) have said they make too many products and feel they should perform a product cull.
- As Mike observes on the show, there is only so much quality the majority of consumers can pay for, especially in tough economic times.
- On the other hand, there is a market for super-luxury products (also referred to ‘premiumisation’), but you will need to know where to find and then target the super rich consumers of these high-end products. The Independent’s ‘Thirst for luxury: who would pay £250 for a bottle of spirits?‘ is an interesting read on premiumisation.
- Sometimes, because of the cost of your ingredients or that cost combined with the cost of distribution, it’s simply not possible to take a product to the general market economically.
Very Sounds Bites from Mike Hardingham
Check out the infographic below for some direct quotes from Mike during the show.
Thanks to Mike for being so generous with his time in order to do this interview with me. To find out where you can buy his products check out the Links and Resources section next.
Links/Resources Mentioned in the Show and Other Useful Links
- Ludlow Vineyard and Distillery website
- A short piece by CiderBods on Ludlow Vineyard and Distillery’s ‘Clee Orchard Famhouse Cider’.
- Salop Pickle Works’ Natural Choice Pickled Walnuts.
- Business Insider explains why, from the consumer’s point of view, having too many choices is a bad thing. It also urges businesses to identify their best sellers, keep those and then get rid of the lowest-selling products.
- A short, waffle-free article Want More Customers? Reduce Your Services or Products from Marketing For Business Success makes the point that you should offer products (or services) that customers require, not what you can do.
Thanks for Listening
Thanks for listening to the show. If you are a food or drink producer, or industry professional who would like to appear on the show (it’s free!), don’t hesitate to get in touch with me by using the Contact Form on this website or by tweeting me @FoodDrinkShow. To hear when each new episode of the show is released simply sign up for my newslsetter.
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Transcript of the Show
Catherine: Hello, and welcome to episode #012 of The Artisan Food & Drink Business Show, the show where artisan producers tell their brand story and share the secrets of their success. I’m your host, Catherine Moran.
Before I introduce you to today’s guest I’d like to thank a listener of the show, Ross Mitchell who is starting out on his own artisan business journey with London Smoke and Cure. That’s an attractive company name you’ve chosen, Ross. Ross said:
‘Just a quick note to say I’ve recently come across your site and podcasts and they’re flippin’ brilliant. I’m at the start of a journey as I try to set up a micro-smokery and craft cure house and the tips provided and questions you pose have given me some of the best understanding of the road ahead – so thank you very much for that!’
Ross says he’d be interested in hearing more about the following topics:
- finding an affordable workspace, and issues related to use class
- understanding and overcoming the bureaucracy of regulation
- confidence in shelf-life label statements
- deciding to take the leap, and information to help make the decision
- making accurate sales forecasts to support a business plan from start-up
- coping in the first 3 months of start-up
- finding the right finance
These are all fundamental issues that artisan food and drink companies have to grapple with. So, thank you, Ross, for getting in touch and I promise to address as many of these topics as possible in future episodes of the show. And best of luck with London Smoke and Cure.
Let’s now meet today’s guest on the show, Mike Hardingham, from Ludlow Vineyard and Distillery.
The main theme of this episode is product range. Mike talks about his product range, which evolved into quite a wide range of products over the twenty or so years that he has been running his business. In the show I mention to Mike that his range of products is impressive but Mike points out that having a big range of products isn’t necessarily a good thing because it can dilute your attention and increase the production work required while not necessarily increasing your profitability. Many of the artisan food and drink producers who have been on the show so far have said they think they are making too many products and that they really need to drop some — they want to rationalise their range. I had exactly the same issue when I was in food production: I was making too many products but I found it difficult to cull products. It’s a question of being disciplined, taking a step back, looking critically at your products and deciding which are your core products, products that contribute most to your business, and then focusing on them. It’s difficult to do but you’ll be a happier producer if you do it. There are more resources about product range in the show notes for this episode, which you can find at myartisanbusiness.com.
This is the first of a two-part episode with Mike. You can listen to the second part in the next episode of the show.
Here, now, is my conversation with Mike Hardingham, founder of Ludlow Vineyard and Distillery.
Catherine: In this episode we’re visiting Ludlow Vineyard and Distillery, which is a based near Ludlow in Shropshire, England. And I’m sitting next to Mike Hardingham, the founder and owner of this award-winning drinks’ business. Welcome to The Artisan Food and Drink Business Show, Mike.
Mike: Thank you very much. Nice to see you this morning, Catherine.
Catherine: Yes I emerged from the mists, as I mentioned, just when I arrived. Mike, before we talk about your drinks’ business, could you give me a little background on what you did before setting up Ludlow Vineyard and Distillery?
Mike: Yes, certainly. I started out life as a mathematician, moved into accounting software and then eventually found myself working in London in the banking industry as an IT specialist — a business analyst. And I spent most of my working life at a computer screen at a desk, indoors and that was something I didn’t want to do forever.
Catherine: Right. So the great outdoors and the land obviously appealed to you?
Mike: Absolutely. I’ve lived most of my life in the country and I really fancied getting away from the indoors, spending more time outside. I felt that was going to be healthier and more fun and so I think… I decided that I would retire, or do an early retirement, move into an outdoor-based pursuit.
Catherine: Right, and were you based in London?
Mike: No, I’ve never actually lived in London. I lived in Oxfordshire and I worked in Oxfordshire for quite a long time and then in London for a while, commuting.
Catherine: Right, and then you end up in rural… in very rural Shropshire?
Mike: Yes, yes, my wife was born about three or four miles down the road from here at Hayton’s Bent, and it’s a lovely part of the world and suited what we wanted to do in early retirement.
Catherine: And obviously you can grow decent grapes here?
Mike: Well… We can grow decent grapes in a good year. There’s no particular problem with the part of the country that we’re in. It’s just that where we are here at Clee St. Margaret we are two hundred meters above sea level, and in this country that’s a little bit marginal for grapes. I wouldn’t necessarily recommend it to anybody, you know, wanting to make a fortune out of making wine.
Catherine: Before we talk about your products, you mentioned that you’re a mathematician by training. Do you think your background — your qualifications — enabled you to do anything special in terms of business planning, forecasting, all the sort of facts and figures side of setting up and running your own business?
Mike: I suppose it helps to be numerate if you are planning a business but to be fair, my wife has more acumen on the accounting side and the planning and, you know, keeping the numbers in balance.
Catherine: Right, and balancing the books?
Mike: Balancing the books is really rather important.
Catherine: Yes, yes. So let’s talk about your products now, and you have quite an impressive range.
Mike: Well, I don’t know about impressive. I think the word might be ‘foolish’. The size of the range is not necessarily a good thing. I think it stems from where we started out and so I’ll take you through a quick history of that.
We started off by planting a vineyard. Now that came from ideas that were planted in my mind when, much earlier in life, we used to live next door to a vineyard in Oxfordshire. And I thought that this was a jolly nice way to spend your time.
And so we started off, back in 1995, while we were both still working full time. We planted the vineyard, or at least started planting it, and then we added to that as we went along. We then planted some walnut trees because that felt like a good idea and we had our first wine vintage, a fairly small vintage, I think, in 2003.
And by the time we had established how well the vineyard was doing, and so on, we were ready to take that early retirement step and… but at the same time we felt that the wine wasn’t a reliable enough source of income because of various dodgy summers we’ve had and we thought we would move into other things as well.
So this is where the cider came in because we had access to a lot of local apples. We didn’t have any apple trees of our own at that point but there are plenty of apple trees in the area, both cider apples and dessert apples of various kinds. So, we thought we would move into cider because there was also another long-held desire that I had to perhaps try and get a license to have a distillery and make apple brandy. I’ve always been very fond of Calvados, so that was a sort of long-term plan as well.
So we ended up with vines, with walnut trees, with apple trees although we still acquire most of our apples from other local sources rather than using our own, and then we ended up with a distillery but that’s a very long story as to how we got permission for that.
Catherine: It sounds like it was a very long-winded perhaps convoluted process?
Mike: Well, I suppose we have been at this process for twenty years now and during at least the first half of that period I was pretty much working full time, so it was a weekend and holiday hobby to start with. It was then… it then turned into a second career.
I have to say that our business is perhaps a little bit unconventional… perhaps becoming less unconventional, but unconventional in the sense that this is very much a retirement business run by people who have made most of their money earlier in life, doing the more unpleasant work of this life, rather than the very pleasant artisan production work that we do at the moment.
So we have the luxury of not needing to make enough money to pay the mortgage —that’s already been done by hard work behind a desk and a computer screen. So, in that sense we’re not necessarily typical. Although I think, when I look at many people that I meet at farmers’ markets and food fairs and so on, there are many people who are going into artisan food production as a second career later in life.
Catherine: So not as a primary career but as an add-on?
Mike: I think there are a lot of artisan food producers out there who are being a little bit experimental. And being a little experimental means that you need to have funds and time to invest in developing something. And that’s not always easy for a young person who needs to make a living. You know, who wants to… Who has, let’s say, a more immediate pressure to look for things to make money from day one.
Catherine: It is tough making a living from artisan food or drink.
Mike: Yes I would say, yes, it is. I don’t know anybody, and obviously we meet a lot of people, and I meet people like you, Catherine, at food fairs, and I talk to a lot of other producers, people who’ve been involved in artisan food and drink for a long time, and I don’t see anybody turning up in a Rolls Royce that they didn’t already have before they started their food or drink business.
Catherine: Yeah, that’s quite a striking thing isn’t it? Do you think… what is the secret of success, then, for making either a decent living or quite a bit of cash?
Mike: Yeah, it does depend on your definition of success. There are a lot of us who are in it for the lifestyle. And let’s say for the satisfaction… food lovers — foodies — who actually want to make something that other people appreciate and are happy about and are polite about. There are people out there who are doing it big time and who are making money and not only making money, but making fantastic products as well. But I mean, you know, there’s a small number of those people.
Catherine: Do you think, with your mathematician’s hat on, that it’s a matter of scale, of scaling up?
Mike: I think there are many artisan products which will always only be local products simply because, obviously, there is a local market for local products. People are keen on the idea of fewer food miles. They are interested in the idea of regionality for products; you know, the right product in the right region. And they are prepared to pay a premium for a local product. Also, of course, in your local area it is very much cheaper to get a product out into the retail arena.
Catherine: In terms of distribution and all of that?
Mike: Distribution costs and so on. And I meet many artisan food and drink producers who really simply never get beyond the first stage, which is simply to sell at their own farm gate or to go to a local farmers’ market. And that’s great. There’s a place for plenty of those people because it’s not always the case that you simply can make a good product economically, you know, that can compete with mass produced things.
We simply couldn’t survive in this world without the large-scale producers and the Tesco’s and Aldi’s and Lidl’s and Sainsbury’s of this world who have made just ordinary food much more affordable for everybody and have raised our standards of living.
But, people do have a little bit of space in their wallets, hopefully, for buying the specialist food, the locally produced food, the food that’s a bit different.
Catherine: Yes, yes. Well, we went off on an absolutely fascinating tangent there.
Mike: Yes. [laughs] Sorry!
Catherine: No, absolutely tremendous. Very interesting, and I did want to ask you… I know that you’ve got, I think, ten acres of land put down to vines.
Catherine: How much land have you got for apples and walnuts?
Mike: We’ve got about two acres of walnuts.
Mike: Yes, and about, yeah, getting on for two acres of apples. I have to say the apples are not a success here. They’re growing very slowly. When we first started this whole thing, when we first bought the land here and then we subsequently bought a house and did it up. But when we first bought the land, it was the back in the nineties when climate change equalled global warming.
Now I think nobody these days will deny that there is climate change and there is a small amount of warming but I think perhaps we foolishly assumed back in the nineties that that it was going to be like the South of France here within a few decades and I don’t think that that’s the kind of weather we’re going to be getting. No doubt about it, things have been warmer but have they been actually better for, you know, producing the sort of fruit here at two hundred metres up in the Shropshire mountains that you can produce in the great areas in Sussex and Kent? I don’t think so, and I think it may never happen. So the apples don’t do very well. Walnuts are fine. They produce crop and that’s great.
Catherine: Yes. I have one walnut tree and it’s maybe seven or eight years old and I think I’ve got two or three walnuts, so I’m very impressed with your two acres of walnuts.
Mike: Well, you do usually need more than one walnut tree for pollination purposes.
Catherine: OK, so this is where I’m going wrong…
Mike: You need different varieties. Yes. Perhaps I can continue on the tangent?
Catherine: Yes, certainly.
Mike: Because I think there’s a development for artisan producers. There are some who are perfectly content, particularly those who are doing it as a second career where they’ve already, you know, perhaps the children have left home, they’ve already paid off their mortgage, they don’t require income, they want lifestyle. And they’re very happy just to stop at the point of selling at their own farm gate or farmers’ markets, supplying a few local shops.
And I think we all know that that’s a very efficient low cost distribution method, but very limited. If you want to go further than that, and take the vineyard, which is one of our products: that’s a typical case in point. In the Ludlow area, a bottle which says ‘Ludlow Vineyard’ on is going to sell more readily than a bottle which says, let’s say ‘Leominster Vineyard’. There is no ‘Leominster Vineyard’, as far as I know, but if you’re in Leominster, then ‘Leominster Vineyard’ will sell better than Ludlow. So, for some products, there is a natural local limitation to the appeal of your product, unless it has some particular cachet of being very good, or whatever.
So for some artisan products like local wine, your wine has to be different, or very good or exceptional in some way to actually travel much further than, you know, half way between here and the next vineyard, and there are plenty of neighbouring vineyards round here. And they will all rightly do better in their local backyards than our wine will do. So, we’re content with the volumes we have of wine: we’ll sell in the local area. We have other products and that’s leading actually on to that. We have… we are doing pickled walnuts, or we were doing pickled walnuts, because, and this will be news to you because I don’t think I’ve told you yet, but this is the last year we will actually pickle our own walnuts.
Mike: We have got other local, a local pickler in particular, Salop Pickle Works, who is taking on the walnut pickling baton from us because we’re doing too much, too many things, I think I said. So I wasn’t particularly wanting to shout about a whole wide range of products: we have too many. We can’t focus on what we want to do sufficiently because we’ve got too many products. We found what we want to do, we’re now focusing in on the things that we really want to do. Walnuts was the most logical thing to go because that’s a non-drink item.
Mike: So, having a food item in with our drink items was a bit of an anomaly — not efficient for us at all. So, the walnuts… we are continuing to grow walnuts and to supply lots of people. As it happens, if you want to pickle walnuts and you’re anywhere in the U.K. and you Google ‘green walnuts for pickling’ you only get us because we’re on the Internet, because we appear to be the only people who are sending out green walnuts by mail order.
I’m sure there are plenty of other people doing it but they’re not making enough noise on the Internet about it and so we get quite a few orders when the time is ripe for the pickling walnuts. We are also, and I’m perhaps going off at a tangent here, but stop me if you want to-
Catherine: Not at all.
Mike: But you mentioned the apples… going back to what I said originally… When we decided that the wine wasn’t going to make enough to cover the overheads of having a business we went into cider. This involved buying various equipment for cider production like apple presses, tanks, a bottling machine, a carbonating machine, because we wanted to do carbonated cider, because it suited the style of cider that we wanted to produce.
We bought a pasteuriser because it makes it much simpler to produce good cider if you have a carbonator and a pasteurizer. Whereas you can make a small amount of cider with practically zero budget, when you get to a pasteuriser, which costs four thousand pounds, a carbonator, which costs two thousand pounds, a bottling machine that cost two thousand pounds, that investment sort of adds up, but it very much produces a much better product, which you can sell… then sell in volume.
With cider… the break point between, you know, between a small producer and a large producer is at the 7,000 litre a year point because under 7,000 litres a year there is no duty to pay and we just stay below that limit. Cider is not our main thing. It’s something that we enjoy making; we enjoy doing. I like a bit of cider of myself.
There’s a big local demand, but we specifically don’t push it out particularly far because we do about 12- 13,000 half-litre bottles a year. And that’s enough for us. If we had to produce more than that, first of all, we’d have to pay duty on it. Secondly, the labour component, because we bottle it all ourselves, we would either have to spend many more days bottling it or we would have to buy equipment with a much greater throughput. Or we’d have to go to contract bottling, which a lot of producers do.
So, the cider is something which we… has been particularly successful in terms of the investment, because we invested, I don’t know, perhaps £12,000- £15,000 in equipment, and that paid for itself very quickly. And at the same time, because we had… that because we were buying that equipment, that was also the same equipment that you require for apple juice. And so we decided to do a bit of apple juice. Funnily enough, to start with, just simply prompted by the fact that we went to farmers’ markets and food shows… a lot of people with children, we thought ‘we’ve got nothing for children’, ours is exclusively adult beverages.
And obviously, well I mean, you know, there are people who for various… for health reasons, for religious reasons, whatever, they don’t drink alcohol. It’s nice to have something non-alcoholic. Again, that’s a bit of an indulgence. It’s not a terribly efficient… we only make a few thousand bottles of apple juice every year. It isn’t our main… It isn’t our main thing but we enjoy doing it.
Catherine: Like cider, which is really going through the roof in the U.K. and also perry.
Catherine: Apple juice is a very popular product and it does seem reasonably difficult to get hold of a proper, real… sort of real McCoy apple juice.
Mike: Yeah. I think this is one of the things where the more individual care you produce on the product, the more you can preserve the flavour. It is key for apple juice, for really good apple juice, to get the apples picked at the right moment, to press them very quickly, at least this is our belief. Press them quickly, bottle them quickly, pasteurise them.
And then, you know… apple juice is relatively bomb-proof after you’ve pasteurised it but the problem is that once you get into large volumes, it gets very hard to get the picking point right, to get it all pressed and bottled quickly enough. Almost universal in apple juice production is that you add some vitamin C to stop it browning.
With a big process it’s hard to get dosage absolutely completely right or to be optimal to produce something that isn’t too acid but which doesn’t brown and the pasteurisation process and so on, you can end up with something that really just tastes of apple pudding. If you don’t have enough care with the apples on the way into the process you can get sort of slightly dirty tastes in there. So there is apple juice about, perhaps not so much in this region because this isn’t so much an apple-growing region.
Catherine: Yeah, perhaps you need to move down to Herefordshire a little bit more.
Mike: Yeah. Well on the southeast of England I think because there’s loads of apples there. But, Hereford yes, and Worcestershire, yes.
Catherine: Yes. Speed is of the essence for crushing, bottling the juice. Is that to capture the essence of the apple?
Mike: The freshness, yes, yes.
Catherine: And I’ve always wanted to ask this: what’s the difference between a clear apple juice and a cloudy apple juice.
Mike: Right. Well we produce both. Naturally, apple juice will be cloudy. It can turn rather clear if you put too much vitamin C in — too much anti-browning agent, and if the apple juice is quite acidic. But to deliberately make clear apple juice, you need to separate out the haze and for that, we put in a bit of pectolytic enzyme. We also add calcium bentonite, which is effectively chalk, which we stir in and then the bentonite attracts the particles and they all sink to the bottom and then we put it through a fine filter.
The technology involved in producing clear apple juice is more complicated. It’s a level up from cloudy apple juice. Cloudy apple juice really just requires a press and a bottling machine of some sort and, you know, well a bottling machine in… for some very small producers that you might see at farmers’ markets might typically just consist of a jug and, you know, pouring into the bottle. Nothing wrong with that.
Catherine: Yeah. Do you think there’s any difference, nutritionally, between a clear and a cloudy apple juice?
Mike: I’m not sure. There may be more… Yeah, I’m sure there must be more fibre in cloudy juice. There is a perception that it’s a healthier thing. We produce more cloudy than clear. At our farmers’ markets and other markets and shows we actually sell just the cloudy. We do sell the clear to restaurants in particular because I think if you’re serving it in a wine glass or whatever in a restaurant, clear is a bit more… it looks a bit tidier. And some people prefer it. I think it is much more difficult to produce a nice, fresh-tasting, clear apple juice. Those who, you know, drink a lot of apple juice, and I don’t myself, will tell you that the clear doesn’t taste as fresh as the cloudy.
Catherine: Right. And you mentioned a few minutes ago how the bigger manufacturers… perhaps, because of the volumes that they’re dealing with, aren’t able to give as much attention to detail to-
Mike: Well, that’s my assumption. I don’t have any knowledge of that so I may be doing them down unnecessarily, but when did you last taste an apple juice from… we make no secret of the fact, you go to one of your local big supermarkets, you will be able to buy apple juice probably half the price, maybe even a third of the price, that we can produce it. And, you know, we’re not making a fortune. None of us artisan apple juice producers are making a fortune out of selling apple juice.
So it’s not because we’re making too much money. It simply is that the cost of doing it not using mass production techniques is just so much higher. And I’m assuming that it’s the attention to detail. I don’t know of any other reason that it could be. But, I don’t know if you’ve ever visited places which press apples in large quantity… but the large quantities, the large hoppers, the way that the fruit is handled and so on, it’s necessarily less attention to detail, yeah.
Catherine: And therefore the price… the different price points, really… surely you could argue are a reflection of quality?
Mike: Yes they are. But, with my other hat on as a consumer rather than a producer, you always have to say, well, paying for quality is fine but there’s only so much quality you can afford to pay for. And many people in the current economic climate, you know, are having to cut back on those organic vegetables that are more expensive than the non-organic ones. They’re having to cut back on individually artisan-produced products, which are much more expensive than mass produced things. And so our profitability, or let’s say our turnover is certainly under attack at the moment because people just generally have less money to spend on quality products.
Thank you, Mike, for sharing your experience and artisan business insights with us. I am looking forward to tasting your Shropshire whisky in a couple of years’ time. To find out about Ludlow Vineyard and Distillery’s selection of drinks, and to see where you can buy them online, check out their website, which is www.ludlowvineyard.co.uk.
If you would like a transcript of my conversation with Mike visit myartisanbusiness.com, where you can download it for free. And you can also get the show notes for this episode with Mike, which have some more useful resources on how to decide on your product range. If you’d like to connect with me online you can find me on Twitter as @FoodDrinkShow.
Until next week, I’m your host, Catherine Moran. Happy cooking, happy brewing, happy fermenting and thank you for listening.
You can listen to the podcast episode with Mike at myartisanbusiness.com/podcast.