Please can you describe what your business does?
SVC Labs Group is vertically integrated Hemp, Cannabidiol (CBD) and E-Liquid and manufacturer and distributor. See the box opposite for more on the brands.
Why did you start your business?
I wanted to get off cigarettes but I was addicted to nicotine. After years of trying everything under the sun to kick the habit and failing I was introduced to an E-Cigarette or Vape Pen back in 2013 and they just worked for me. Before I knew it I had accidentally given up smoking and now my passion is helping others to do the same.
Did you see a gap in the market or is it a product you have a passion for?
Both to be honest. I will always have a personal connection to the business as it changed my life for the better. At the time there was very little choice or quality UK products or manufactures on the market. I have always had a passion for British manufacturing and innovation so I approached my business partner, presenting my business plan and off we went into an unknown world of E-Liquids.
Coming from a fashion and design background, I knew very little about manufacturing so the learning curve was steep. However, three years in we moved to our 12,000 sq ft state of the art facility in Crawley, with a 54 strong team.
How has the vaping market changed since its inception?
It is an ever-changing landscape, so keeping abreast of the innovation, legislation and consumer demands is key.
When we started there was just over-priced American-made liquids or cheap, unregulated Chinese liquids on the market. We entered the market as a single branded company called Simple Vape Co (SVC) with only six flavours. It was soon evident we had to diversify and during our second trading year we launched two new brands and opened our White & Private Label arm, which saw us grow from £260k revenue in Year 1 to £1.7m pa in Year 2.
We have now opened up international distribution channels into the US, EU, Canada, Russia and Malaysia. We export over 40% of our products to the EU and 10% to the rest of the world.
What are your most popular products?
Our new Hemp and CBD based products are our leading product category (www.honesthemp.com). Our key products are CBD tinctures/oils, edibles, topicals & skincare and bulk raw materials. We have some new great products in development which will focus around hemp textiles.
Hemp & CBD is a product I passionately believe in and this plant has the power to change the world for the better.
How safe are e-cigarettes?
According to Public Health England, “E-cigarettes are 95% less harmful than smoking”
It is simply the best alternative choice and nicotine replacement therapy (NRT) on the market. We are seeing more and more positive studies and reports around the long term effects of vaping.
The Royal College of Physicians released a report in 2017 named ‘Nicotine without smoke: tobacco harm reduction’, which concluded that e-cigarettes are beneficial to UK public health. Smokers can be reassured and encouraged to use them as they are much safer than smoking.
How do you see the industry changing in the future?
From a consumer perspective the industry will continue to flourish. From the business side I see a lot of consolidation happening and this will continue. With Big Tobacco looking to reform its image, more acquisitions will happen and the entry to market for new companies will become and lot more difficult.
What are your ambitions?
My focus is on the UK Industrial Hemp side of the business. I believe we can complete our full UK supply chain by 2021, which means we would be perfectly positioned if legislation changes around medicinal marijuana, which I anticipate will happen in the near future.
With SVC Labs our goals are to focus on filling our capacity at the new factory, high margin sales, increase profitability and promote our own brands.
Looking at the company as a whole over the next 12 months we will be looking to find a strategic investment partner who align with our company goals of becoming the house hold name in medicinal cannabis FMCG’s and smoke free nicotine delivery products.
What was the most difficult obstacle you need to overcome?
I found people management the most challenging, and equally I have found learning to become a better manager incredibly rewarding. Our fast growth meant we grew from a start up to a full-scale operation within months and we spent 16 months building and implementing our new back end system. Getting staff on board during such drastic operational change was hard. We brought in a manufacturing consultancy for eight months and they helped us to refine who we are and how we operate.
In 2018, we produced 8 million units on single shifts on a five day per week rota, compared to 2017, when we made 3.4 million units on three shifts per day on a seven days a week rota. Efficiency is key.
What advice would you give to start-ups or budding entrepreneurs?
If you are ready to work hard, then don’t waste time thinking about it - just go for it. Test the concept, keep it lean, and surround yourself with passionate people who are more knowledgeable than yourself.
Why did you choose to set up in Crawley?
In 2016 we decided to move from Brighton to Gatwick - it was very difficult finding the right place as we only had one full year of filed accounts. However, David Bessant from Graves Jenkins and Michael Deacon-Jackson from FTDJOHNS believed in SVC and helped us find the perfect facility. We got the keys in June 2017 and within five months we had fully fitted the unit out with ISO Class 6 labs with state of the art automated machinery.
Manor Royal was our chosen destination as we have all our logistical partners arounds us, as well as great links to the city and airport.