Company:Gnaw Chocolate – Investing in new ideasNew Machinery and created 2 new jobs Initial Small Grant Scheme and then Growing Business Fund
Matt Legon set up Gnaw Chocolate in Norwich in 2010 with the ambition to develop a chocolate brand that would put a smile on the faces of customers. Gnaw’s chocolate is carefully hand-crafted in its own kitchens, using natural flavours and locally sourced ingredients from Norfolk. The workforce has grown to around 25 and 80% of Gnaw’s production is now exported with France a particularly popular market. Matt was presented with a huge opportunity when Gnaw’s French distributors asked for a range of mini bars for the ‘impulse buy’ market aimed at consumers looking for a healthier chocolate bar option. To meet this new demand, Matt needed to invest in a new wrapping machine. It was at this point that Matt got in touch with New Anglia Growth Hub to explore funding opportunities. Watch the video to find out how one of New Anglia Growth Hub’s advisers helped Matt to get the capital he needed to take advantage of this great growth opportunity.
If your business has ambitious growth plans and needs help with funding the vital components that would deliver them, we’d love to hear from you. Pick up the phone and call us on 0300 333 6356 and we will put you in touch with one of expert advisers who’ll arrange to come and meet you to discuss your plans.
For the full story of Gnaw and how we worked with them, you can read more below:
The story behind Gnaw
After graduating from the University of East Anglia in Norwich in 2005, Matt Legon initially pursued a career in investment banking in London. But five years later, in 2010, he returned to Norwich to set up his own business driven by a combination of his love for chocolate and his identification of a gap in the market.
Matt had seen that the traditional manufacturers in the chocolate market were not really delivering what he believed should be at the heart of chocolate – and that’s fun! When Green & Blacks entered the market and made an immediate impact, Matt felt that the time was right for him to take the plunge and offer something a bit different. So, he built a factory in premises in Norwich without any customers, convinced that there was a market out there for an innovative, thought-provoking and fun range of chocolate bars where even the packaging should put a smile on a customer’s face!
Creating the Gnaw brand created a lot of initial interest and the early years of trading were good. Producing large premium quality bars using a fresh combination of tastes and ingredients, Gnaw’s chocolate is carefully hand-crafted in its own kitchens, using natural flavours and locally sourced ingredients from Norfolk.
Matt grew the workforce to around 25 as his operation flourished both nationally and internationally. In fact, 80% of Gnaw’s production is now exported mainly to France and Russia.
Very recently, a huge opportunity for growth has been presented to Gnaw. Its French distributors asked it to develop a range of mini bars for the ‘impulse buy’ market aimed at consumers looking for a healthier chocolate bar option. Gnaw produced three new bars for testing and they have been hugely successful, so much so that to be able to pack the volume of new bars being ordered, Matt is going to have to invest in a new wrapping machine.
With a turnover of £1.3m in 2017 and ambitions to grow that to £3.5m in 2018 it would appear on the surface to be a perfect situation. But Gnaw had become a victim of its own success. To achieve this significant step-change in production Matt recognised that he would have to finance the new equipment to cope with the projected demand.
Gnaw’s relationship with the Growth Hub
Matt had known about the work the Growth Hub does from his networking so got in touch once he realised the size of the financial commitment needed for the new equipment.
Growth Hub help
Business adviser David Sparkes met with Matt to find out what his issues and challenges were. It was very clear from the outset that grant funding would help Matt to fast-track production and distribution of the new mini bar range so David suggested that Matt apply for 20% part funding from the Small Grants Scheme.
Matt had run Gnaw from the outset on a self-funded basis, achieving excellent profitability whilst not taking on any debt, so being able to access grant funding rather than taking a loan was music to his ears.
It was ultimately to help bring the anticipated success, with their latest impact on the French market making them winners at the regional British Chamber of Commerce awards. See the details in the article in the EDP by clicking here.
Working with the Growth Hub
Matt is very clear on the benefits he has realised from engaging with the Growth Hub, “In a nutshell, I have been able to scale-up my production line quickly, and it has freed up my resource to focus on developing our international strategy and negotiating with our international customers rather than having to search around for finance. Undoubtedly, this has enabled us to act nimbly and take advantage of this great opportunity to enter a new sector of the market. Speedy new product development is a critical success factor in our industry and the Growth Hub’s support has certainly enabled us to proceed quickly with our plans.
He continues, “My investment banking background enables me to read numbers very clearly so I can make decisions on whether or not opportunities are worth going for. I would encourage any business owner planning for significant growth and possible funding to make sure they, or one of their team, has an intimate knowledge of their finances, sale volumes and profitability projections. That will help you to identify where the investment needs to be made and you will avoid wasting your time and money.”
The adviser’s view
David Sparkes said, “Gnaw is a great success story for Norfolk and Matt’s situation is one that is fascinating in that his challenges were all about managing super-fast growth effectively so that he didn’t overstretch the business’s resources – human, financial and mechanical – but knew he had to act quickly to make sure he didn’t miss out on the great opportunity that presented itself.
“After our initial conversation we put the wheels in motion to submit an application for grant funding from the Small Grants Fund. For a successful application, a business needs to present a detailed business case to demonstrate how it complies with the criteria, be prepared to answer a number of follow-up questions and host visits from the representatives of the fund scheme. My role was to support Matt in his submission, help him to understand the requirements and to be the main interface with the scheme. I am delighted that we have been able to help one of Norfolk’s star companies to grow and prosper. It’s exactly the type of situation that the Growth Hub was set up to support.”