As part of the GCI Summit, Hannah Skingle, director of South West Brands and Dominic Day of fourfive CBD held a discussion about navigating novel food regulations.
Hannah Southwest is the director of South West Brands. They are one of the first global, multi-brand consumer goods groups developed specifically for the CBD industry. They have a selection of brands such as Gen-Z focused skincare line, LoveMeMeMe and menstrual cycle brand, FEWE.
Dominic Day is the co-founder of a sports-focused brand, fourfive who specialise in supplements and CBD. A former rugby player for 14 years, he established fourfive with the athlete George Kruis. Fourfive have recently signed deals to partner with rugby clubs while offering supplements to a gym chain in the UK.
Navigating novel foods
The novel foods process has been a difficult time for brands. It meant an increase in testing and costs before making an application to be authorised. The idea was to make sure CBD products were fit for consumption and authorised by the Food Standards Agency (FSA) before being allowed to be sold.
The public list is not due to be released until next year which has left brands in limbo waiting to see what the industry will be like in 2022.
“We are pretty much where we were at the beginning of the year unfortunately as we are still awaiting this public list from the FSA to come out. It’s really important for UK companies because it will allow us to continue selling our products, Hannah said.
“The brands that are now validated can continue selling but the list still hasn’t come out in terms of Europe. What we are seeing is not only synthetic products being validated but we are now moving through the stages of suitability which is exciting as it’s been stagnant for four years. I’m hopeful that next year, that will move forward into authorisation.”
Diversifying brands
Dominic explained that fourfive took the risk out of their application by creating supplements alongside their CBD with the aim of creating products safe for athletes to use. This has given the brand a vital bit of ‘pivot’ if needed.
“A year ago, we decided to move into vitamins including non-CBD products. There’s a couple of reasons behind it as obviously, it kind of de-risked the novel foods scenario that everyone was worried about and it also really fit with our brand story. We looked at the vitamins we would take every day for full recovery or wellness purposes and we were shocked around the quality of the products. Although it fits our product range and story, it also gives us some pivot on novel foods if we need to.”
Hannah was in agreement about diversifying a range to be less dependent on consumable CBD products.
She said: “It’s pretty much the same for us. We are a consumer brands group where we are all about owning and creating brands. On the basis that there was regulatory uncertainty, we didn’t put all of our eggs into creating tinctures and ingestible CBD products. We diversified all of our brands.”
Southwest brands offer a range of skincare, topicals and food supplements that have no CBD in them. As their brand portfolio is mostly concentrated on the skincare market, they have managed to avoid any uncertainty with novel foods. Hannah explains that by being consumer-focused, they bypass the difficulty of the CBD market.
Hannah added: “With Southwest brands, we look at consumers first. We want to service a need for a consumer so we aren’t looking to service the generic CBD industry which is challenging. To do that, you need a lot of money and I don’t think it could be effective for a long period of time.
“With FEWE, we examined functional menstrual care like tampons or pads. We also looked at menopause which is where we found a huge gap in the middle. There was nothing that really honed in on the consumer need for cycled care. That is how we have approached it. We target specific groups of people where there is a need and they are not currently being serviced then we create a brand around that.”
When it comes to marketing, Dominic highlighted how difficult it can be to directly approach consumers. Earlier this year, fourfive CBD announced partnerships with different rugby clubs to promote their products. As Dominic and co-founder, George Kruis are rugby players themselves, it was a natural fit for the brand.
“Marketing continues to be extremely difficult in this space. With regulated products, you can’t do the traditional methods so one thing we are really excited about is our partnerships. We’ve released a few in the last month with Saracens rugby club and Leicester Tiger’s rugby club. It fits with our story but also, legitimises the products because we have worked really hard on them.”
He added: The way we got into those clubs was by talking to nutritionists, doctors, fitness coaches and selling them on it. It’s not a necessarily paid partnership where we are just chucking them money. It’s a very mutual thing where they are using our products and finding the benefits of them. This is something we want to scale up over the next 12 months.”
Drawing on your USP
When choosing retailers to approach, it’s more important than ever to select the right partnership and build on relationships.
Hannah said: “We believe in our brand and we believe they are different and super unique. The passion part really sells in retail. It’s been agonisingly painful during COVID but that’s starting to change now. Brands are starting to partner more strategically in retail whereas five years ago, it was you would have to go for whoever said yes.”
Dominic agreed on the importance of building relationships. He stated it took around nine months for fourfive to get a listing and into Boots stores. A huge part of their success is that they offer a unique, true story behind the brand.
“They love our story and that there is a face behind the brand. We put a lot of work into building relationships when everything shut down during COVID. They are starting to come to fruition now and we’ve recently launched in Sport’s Direct. For us, there is no point in going to a retailer that mainly serves 23-year-old women because they can’t relate to our brand.
We did fall into that trap at the start where it was about grabbing everything. We just want to grow but now we are looking at it with a more long term perspective. We are going to retailers that really fit with our brand that we can grow with which is key for the long term.”
Navigating novel foods….and COVID
It’s impossible to discuss the difficulties faced by brands within the past two years without mentioning COVID. Hannah and Dominic both touched on how it affected their business models.
“We built during COVID so we had a light headstart in knowing what was happening. The entire business model was built during COVID so we did have that advantage. It really reflected in our business model and how we operate. We understood that the last mile of the value chain was that brand to consumer piece. We work with other partners and it’s not really a buy, sell model. It’s working with people we trust in the industry which means having some understanding that we are all experiencing issues with COVID,” Hannah said.
Dominic said: “We had planned big growth before COVID in terms of retail. We were okay for stock because we had planned ahead and pulled it all in so we looked at our supply chain to make sure things were going to be seamless when everything opened up. It allowed us to get structured.”
