A Kirkcaldy business has seen its turnover increase by 24% to £4.3m after securing a deal to supply pre-filled popcorn tubs to 235 Asda stores.
Sephra Europe, which has been helped by Business Gateway Fife since 2014, sealed the deal with the supermarket following the success of its self-service popcorn machines which were installed in 57 stores two years ago.
The firm, which employs 13 people in its base at Mitchelston Industrial Estate, continues to supply packaging and popcorn to Asda for the machines alongside its new pre-filled cardboard tubs that went on sale last autumn.
David Archer, managing director, says the deal with Asda has not only helped increase his company’s turnover, it has provided him with an opportunity to expand into packaging.
He said: “Over one million tubs of popcorn have been sold through our self-service machines in Asda since they were installed in 2016. Increasingly, however, stores were having a member of staff pre-fill tubs for sale. That led to the idea of a pre-filled cinema style popcorn tub that shoppers could buy directly from the shelves and online. That business will now see us supply in excess of one million pre-filled tubs per year.
“To fulfil the new order, we’re purchasing regular container volumes of paper tubs from our partner factory in China. This has allowed us to also import ice cream cartons, other popcorn tubs and coffee cups which we will sell to the food services and catering industry. We have a good reputation in that sector, as we already sell in excess of 150 tonnes of our own crepe and waffle mix and in excess of 250 tonnes of chocolate to hotels, restaurants, and caterers each year, so it seemed the obvious next move and a great way to expand our offering.”
He added: “Right from the start Business Gateway Fife has connected me to people and funding streams that have helped me build the business into what it is today, in particular supporting my successful application for an East of Scotland Investment Fund (ESIF) loan provided me with working capital to buy out my business partner in 2014. Most recently my adviser helped Sephra become account managed by Scottish Enterprise. This is already opening doors, and with its support I believe we will be able to hit a projected £7.5m turnover by year-end 2019.”
Brian Blackburn, Adviser, Business Gateway Fife, said: “Over the past four years we have helped David grow his business through long term business relationship management. As well as helping him secure an ESIF loan, he has benefited from funding through the Fife Investment Fund and from being paired with specialists that have helped him shape his growth strategy. Advice has also helped the business reduce its own packaging, energy use and distribution costs, and signposting to Scottish Development International has proven helpful when entering new markets. Now, with specialist support from Scottish Enterprise the business will be able to grow even further.”
Having originally set up an entertainment agency serving the wedding market, David began renting and selling chocolate fountains in 2005. The former musician quickly realised the machine’s appeal and entered a partnership agreement with Sephra, the largest manufacturer and supplier of chocolate fondue fountains in the world, in 2008.
Armed with the perpetual license for its fountains in Europe, plus an agreement that allows him to market new products he develops under the Sephra name, David began securing distributors, initially in Europe then branched into the Middle East. The company now has over 30 distributors and exports 50% of its products, which are sold or leased to customers including the Armani and Jumeirah Hotels in Dubai and to over 100 Dip n Dip restaurants across the Middle East.
David said: “The business thrives because we continue to diversify our range of products, develop new concepts, then go out and actively look for customers to buy them. People’s sweet tooth is never going to disappear, and the majority of our products provide young and old with the chance to indulge and enjoy interactive food theatre, something that is loved the world over.”