Shaper: Frazer Thompson

Show aired on 16th May 2015

Transcript

Elliot Moss
A punchy way to start Jazz Shapers here in Jazz FM. That was Bang Bang from Dizzy Gillespie. Hello, its me, Elliot Moss, thank you very much for joining me here on a nice Saturday morning. Jazz Shapers the place where you can hear the very best of the people who are shaping the world of jazz, blues and soul alongside their equivalents in the world of business, a Business Shaper. My Business Shaper today I am pleased to say is Frazer Thompson; he is the CEO of Chapel Down and Chapel Down Group of course make gorgeous wines, bubbly and not bubbly, they make beers and they also make ciders. Proper cider with proper fruit in it I am sure you will be hearing very shortly. In addition to hearing from Frazer you will be hearing from our programme partners at Mischon De Reya some words of advice for your business and as well as all of that of course, a tasty mix of music from the shapers of jazz, blues and soul, including Nancy Wilson, Jason Moran and this, its new from Benny Sharoni.

That was The Bodega from Benny Sharoni, I hope you liked it, it’s new as I said here on Jazz FM. Frazer Thompson is my Business Shaper today and he is the CEO of the Chapel Down Group and they make amazing British, yes you heard it here first, British wine, sparkling, not sparkling, they make beer and Dominic the producer of Jazz Shapers promises me it is a fine brew and they also make lovely cider. It’s a real pleasure to have you Frazer, thank you very much for joining me.

Frazer Thompson
Great to be here Elliot.

Elliott Moss
Now you took over the business as managing director back in 2001 and your background was from a big company, Whitbread and you are a Geordie even though you haven’t had a few and you will be sounding like a southerner – he’s gonna now start sounding like a Geordie. What made you join Chapel Down? What was it that convinced you that British wine had a future?

Frazer Thompson
Well firstly it is English wine ‘cos actually according to the EU actually England is just a region and so we are allowed to call it English wine.

Elliot Moss
Okay.

Frazer Thompson
But I work for big companies and I think one of my kind of mantras is to try and go to bed just a little less stupid than I was when I woke up and I had worked a long time in beer and a long time for Whitbread, great company. I had been given this fantastic opportunity to go round the world selling beer with Heineken – it doesn’t get much better than that as a Geordie I can tell you. So I have been travelling around the world but strangely enough I kind of, I’d stopped learning and I was getting I think a little bit bored and I had also, my kids had got to 13, 11 and 11 and that seemed like a pretty good time that if I was ever going to have a go and get involved and do something pretty much for myself, then that was the time to do it. I wanted to learn something, I wanted to go into something that was fairly familiar so booze, a Geordie, its kind of quite a good mix really and moved back to England to encourage the kids to get back into the education system over here.

Elliot Moss
Now how big or small was the business at that point? This is now fourteen years ago?

Frazer Thompson
It was pretty small. In fact it was a pretty dingy place at Tenterden, it had a garden centre outside. I did sort of wonder what an earth I was doing but I do know that it made great products and that actually if I prided myself on anything it was that as a marketer and so what it seemed to lack was an ability to market itself. I tasted it, it was great. It was one of the reasons I joined this company.

Elliot Moss
But no one had heard of English wine and the like at that point or people may have been very scornful and disdainful and said, ‘excuse me, I don’t think so’.

Frazer Thompson
I think you are being very polite actually.

Elliot Moss
I am.

Frazer Thompson
But they were…

Elliot Moss
But I can’t swear you see.

Frazer Thompson
…they were very very disdainful but in fact the reason I took the job and this is why I ever got involved in the first place I guess – I had a dinner with an old friend from an advertising agency who put three glasses of fizz in front of me and he said ‘can you name where they are from?’ and I said, ‘I know a bit about wine, of course I can’ and of course I got it painfully wrong and we ended up with just one left and he bet me another tenner that I could have ten guesses and I wouldn’t guess where that wine was from and he took another tenner off me and I ended up drinking Chapel Down and wrongly naming it as from New Zealand, from Chile, from everywhere but England and it was about three weeks later that I saw, I saw the opportunity at Chapel Down so it just seemed slightly serendipitous really.

Elliot Moss
Well there you go, that’s how Frazer Thompson found himself in the little old Chapel Down which isn’t so little anymore. Time for some music, this is Aretha Franklin with (You Make Me Feel Like) A Natural Woman.

I can bet you a glass of Chapel Down’s finest white wine that you were singing along to that – Aretha Franklin with the iconic (You Make Me Feel Like) A Natural Woman. Frazer Thompson is my Business Shaper today, he took the strange choice to become the managing director of Chapel Down people would have said back in 2001 and has transformed it into a very very successful business. They make gorgeous wine and in a blind test according to Frazer Thompson he didn’t know that he was drinking English wine, not British wine, English wine way back in the day. Now when you took it over and you said you worked in big companies, you had globetrotted with Heineken, you have done some really really big brand jobs – what were the first three things you had to fix as the new business leader and how did you go about doing it when you took on Chapel Down?

Frazer Thompson
Well the first is to get over the initial shock actually. I was about three days into the job and somebody came to repossess the photocopier. Now that didn’t happen at Heineken and it never happened at Whitbread either and so the first thing really was to try and make sure that the place was running efficiently and by that I mean it had cash in the bank and it had some means of paying its bills so…

Elliot Moss
What was turnover then just to give me a sense?

Frazer Thompson
Turnover of the company was about 1.1 million a year.

Elliot Moss
So it is a really small business?

Frazer Thompson
Really a micro-business.

Elliot Moss
Yes.

Frazer Thompson
And it was also… so the job number one was try and put the financing on a decent footing and that meant having a plan and going out and raising a bit more money. Job number two was we had a mountain of stock in the business so it was having a look and saying ‘well how am I going to get from where I am now to where this business needs to be’ and so at the time we had a mountain of stock of grapes that you had never heard of. So I can mention grapes like Savior Blancher and Burg Reichenstein and Mulatergo, probably never heard of them, probably less likely to drink them. But actually we saw that as something of a virtue at the time. I had to turn that mountain of wine into cash in order to replant with wine varieties you have heard of, so Chardonnay, Pinot Noir, Pinot Meunier, those sorts of things and so in order to do that we really had to sell and so having an organisation that could sell was job number two.

Elliot Moss
Where was distribution at that point just to give me an idea?

Frazer Thompson
Well at the biggest single customer we had so this is one of the lessons I learnt, the biggest single customer we had at the time was British Airways and British Airways stocked our wine and gave it to customers in little bottles called Horizon.

Elliot Moss
Yeah.

Frazer Thompson
And that was actually about forty percent of all the wine we were selling and we got good results from that but we weren’t allowed to call Horizon to anybody else so it was just for British Airways and it kept the clock ticking over. So job number two was to try and turn this mountain of money into cash and job number three was ‘did we have the people to make this happen?’ So how am I going to ever persuade really good people to come along and do this. Now we were lucky at the time actually we did have some really really good people who just needed a bit of a motivation, who needed a purpose, who needed a vision and needed some direction and actually that is pretty easy to give if you can get the first two in shape. So if you saw results coming through we started to get a bit of momentum going and so from there it became a bit easier. So the first three things were pretty simple.

Elliot Moss
Now you are super clear about what those issues were. At the time how long did it take to ascertain that those were the issues? Was it pretty quick as well?

Frazer Thompson
Well before I joined the business it was pretty clear that there was a lot of stock that wasn’t moving so we had to find a way of making that stock moving. It was pretty clear there was one customer who was dominant and we needed to change that. I hadn’t met the people and I didn’t know really how bad the cash situation was so some of those were pretty emergency things that I had kind of taken for granted but actually they weren’t, it wasn’t that great shape.

Elliot Moss
Stay with me to find out how Frazer Thompson has taken that business and well, taken it through the roof actually I think almost five or six times the size of revenue now for that business and more importantly, you’ve heard of them, yes you have. That’s Chapel Down just in case you didn’t catch it earlier. Latest travel in a couple of minutes but before that some words of wisdom from our program partners at Mishcon De Reya.

You are listening to Jazz Shapers with me, Elliot Moss every Saturday morning I get to meet a shaper from the world of business, someone who is leading a business, someone who has created a business, someone who is fundamentally transforming the business in the category that they are in. If you have missed any of the previous guests then you can go into iTunes, ‘Jazz Shapers’ are the two words you need to unlock a hundred and sixty brilliant guests and all the insight that comes with them. CityAM.com if you need another place where you might want to go or even British Airways Highlife if you happen to be flying in the near future. Frazer Thompson is my Business Shaper today and he is the Chief Exec of Chapel Down Plc. They make lovely English wine, sparkling and non-sparkling and they make beer and they also make cider and Frazer and I were just talking before about identifying the problems that were there in the business when he took it over back in 2001. Now you talked about cash and you talked about distribution sales and you talked about harnessing the team. Saying those are the problems and then making it happen and fixing them are two completely different things. How did you then switch into fixing mode?

Frazer Thompson
Well you have really got to have… what you expect is that business is going to be a pretty straight line and I can go about fixing those problems but in fact it didn’t quite prove to be that way. Nothing is ever as easy as you think it is going to be on paper and the first thing that happened was the Gulf War. So the Gulf War in 2003 basically put British Airways into something of a tailspin and they immediately delisted our wine. So forty percent of our sales disappeared overnight because British Airways had decided not to stock wines on flights internally. Now we may or may not have had a legally binding contract at that stage but even if it was particularly legally binding we couldn’t have afforded to chase it because had no money in the bank so we had to sit on it and we had to do something about it. So we started, we created a brand called Curious Grape. We made a virtue of these grapes that we had and we started selling them to supermarkets. That was great. The downside was supermarkets aren’t brilliant at paying very quickly and after a hundred and ten days with one well known supermarket, we had a salesman parked outside in the car and we were threatening all sorts of stuff that unless we got a cheque there was dyer things were going to happen to this supermarket and eventually the cheque arrived with the sales director. But meantime I had had to pay out of my own pocket the salaries of some of the staff for a month. It was classic small business stuff where cash flow was in a bit of a mess and you had to get all these things straight before you could move forward. So raising funds to me was the big issue and getting a business fit to raise funds is quite hard, you know, you’ve got to get customers in place who are going to impress potential investors, you’ve got to have a plan, you’ve got to have a vision and so putting that together took us about three or four months with the Board at the time and we managed to persuade a very famous investor called Nigel Wray on board at that stage and he put a substantial amount of money in and Nigel backed the product and the people and if there is one thing that I have always learnt from that moment was that people and product, that’s what great investors are going to back and once they look at the whites of your eyes and they say ‘look this is a guy I can trust, this is a guy who is going to do what he says he is going to do and deliver it, then I will back him’ and you know that was eleven years ago – over eleven years ago and you know, Nigel Wray has been a fantastic backer of the business all that time and he is still my largest shareholder and so to some extent it is the faith that Nigel has shown in me and the management that we put in at that time that’s been the driving force of the organisation since then.

Elliot Moss
And that’s the importance of investment. Without that investment you probably wouldn’t be here having a conversation with me today I imagine.

Frazer Thompson
No.

Elliot Moss
Time for some more music and I think quite aptly it is The Best Is Yet To Come from Nancy Wilson.

That was Nancy Wilson with The Best Is Yet To Come and I have a feeling it is. Frazer Thompson has been my Business Shaper up until now and will be until 10.00 o’clock, he is staying with me, he’s promised. He is the CEO of Chapel Down Plc and we were listening to you talking about fixing and investment and the importance of investment. Now all that is well and good and if you have got cash in the business that’s fantastic but that wouldn’t have been enough and I imagine then or even in parallel you were thinking products, you were thinking being the best. How did you then start to move the business into a state of really delivering excellence on a daily basis and making sure the business worked?

Frazer Thompson
Well we had taken the stage, having taken Nigel’s money, it was vitally important that we started to deliver on the plan and part of that plan was that we could actually mirror champagne. Part of the story is of course English sparkling wine in particular made on the same chalk soils it just happens to face South, it’s only eighty, ninety miles away from the champagne region of France, why can’t we make world class wine. We have the evidence in front of us. So the challenge really was to really up our game in terms of the quality of the products that we were making and the best evidence that you can get for that is to win gold medals and not long after Nigel invested, so in 2004, two things happened. One, awful and one very good. And the awful thing actually turned out to be quite good. So the awful thing that happened is that we had a fire and we had a fire at the Tenterden vineyard and that is something I wouldn’t wish on my worst enemy. It was an awful day. It started at 5.30 at night and it destroyed about half the stock that we had and some of that was really good stuff that we will never get back. And so that was, it was potentially a disaster and had we not had the money already in the bank we wouldn’t have been able to negotiate the best deal we possibly could from the insurers. We would have gone. But as it was it enabled us to take a pause and take a step because actually we did get the insurance money and it did enable us to move forward so that was kind of quite, you know, quite an important moment. The second which was almost happened the same week is we won our first gold medal at the International Wine Challenge. Now to put that into perspective you know, to win a gold medal from England was almost unheard of. To win any medal was pretty much unheard of and it started really a ball rolling of people starting to go, ‘well actually I had better start taking this seriously’. That year we attended Taste London for the first time and I remember we were pulling people on to the stand to get people to try and taste the wines and one or two had heard of this gold medal and I can tell you now that you know, nine years later, we still support Taste London and it is packed. We have to push people away. We certainly don’t give any free wine away from the stand. It is a complete transformation of the business and it just shows you just how far you can go if you have a very clear idea that what you want to do with the products and how you are going to market them and you absolutely stick to that plan that you have got to make great products, you’ve got to make a product that you feel passionate about. More importantly than that for us was what we set the whole company up to do was it’s all very well trying to be the best but actually you’ve got to do something that nobody else can do and that continual search for that extra layer of complexity, that extra layer of something that nobody else can do is the thing that still drives us to this day. It is still the thing that shapes us and all of that started in this very intense period around 2004/2005. These great things started to happen and once that, you know, once that snowball starts to roll it felt you know, three, four years of really pushing a snowball up a hill and it just felt that it wasn’t quite, didn’t need pushing quite so hard at that point and it felt like we had come to the top of the hill and really it wasn’t until about 2009/2010 that we really felt the snowball was now starting to gain some momentum. But yeah, 2004 was a particular pivot year for us.

Elliot Moss
Final chat will be coming up with Frazer my Business Shaper today plus we will be playing you a track from Jason Moran’s tribute to the Fats Waller, that’s after the latest traffic and travel here on Jazz FM.

That was Jason Moran mixing it up with Ain’t Misbehavin’. Frazer Thompson is my Business Shaper just for a few more precious minutes. Frazer you obviously came from a marketing background and you have that clarity of knowing, sensing apart from you know, there’s marketing and business actually but really knowing what’s going to work. It’s one thing saying you are going to create the best products in the world, it’s another thing doing them but you did it. It’s one thing saying you can turn around a business and there’s another thing then actually going to do it. Where have you, is there an inner confidence? Is there a sense of your own experience? Have you observed other people? Where does this clarity come from, this belief do you think, for you?

Frazer Thompson
Well I think initially it’s borne out of arrogance actually. It’s born out of a belief that you can do these things because I had done them at Heineken, I had done them at Whitbread. I was the guy who put the widget in a can of Bedlington’s, I’d…

Elliot Moss
That was you?

Frazer Thompson
Yeah that was me I am afraid.

Elliot Moss
I like that widget.

Frazer Thompson
Well you know and the advertising and all that so there is things where you get an amazing sense of self-confidence and what… the journey from Chapel Down really what it’s really taught me is humility actually. You have got to stay humble and grounded so you can say you can do these things but actually there’s only one way you are going to make those things happen and that’s actually to surround yourself with the best people that you possibly can and realise you can’t do it all yourself and you have got to have great people to do those things with you and if they believe in you and you can lead them, then actually almost anything is possible. And so yes of course we make mistakes and of course I am not going to talk about all the mistakes we’ve made but you know, you have got to make mistakes in order to learn and I do think that that thought that you do try, you must try every day just go to be a little less stupid than you were when you woke up. It is a driver and actually you won’t learn if you just keep you know, doing cookie cutting stuff.

Elliot Moss
But that story is a really good story now to be able to look back fourteen years and say ‘here’s what we did, here’s what I had to fix’. That’s a fantastic one. I imagine there have been mistakes and I imagine there have been significant problems. You mentioned the fire, where do you go, where have you gone historically when there have been those problems, whether that’s literally to a person or in your head. How do you cope with that?

Frazer Thompson
Well family, family, family, family – it’s the people you trust the most and the people who give you the strength to carry on. So you know, I’ve been married now to Susan for thirty three years – I’d better get that right, thirty three years and she is not only, she is more than a wife, she a muse to me and if I just want to rant and moan she is very good, she is a very good ear to that and she picks out the bits that are really important in that and so having a partner who can help me is a huge, is just a huge boon so when all else starts to fail you turn to the people who can do nothing but trust you, who have absolute faith in you and as the business has grown actually that circle of people actually is slightly larger but you know, it starts first and foremost I wouldn’t do anything significant without consulting Sue first.

Elliot Moss
And I am pleased, I hope we got those numbers right, I hope it was thirty three years or you will be in trouble. Just before I ask you your song choice it occurred to me obviously you have skin in the game, you invested in this business. You were in big businesses before. What is the fundamental difference in feeling that you have now as the person responsible for the business who is also invested in it versus the person who was responsible for the business, who did fantastic things in big companies… what does that mean for you?

Frazer Thompson
Well look the biggest difference is humility actually. The biggest difference is to be able to stand in front of an audience of people, when we did the crowd funding last year, you know…

Elliot Moss
Yeah three million quid or something, three and a half million.

Frazer Thompson
…nearly four million pounds in twenty one days but you have got to stand in front of people in an audience and tell them what you are going to do, tell them you’ve got a great business and they have got to believe you and the best way that they can believe you is to say ‘look if it hurts, it’s gonna hurt him too’ and actually having skin in the game it enables you to say you are watching out for them because you are one of them and particularly when you come and do crowd funding which is becoming very popular at the moment, you need to have real empathy with the people who own the business like you do and if you can stand there with hand on heart and eye contact and say ‘well I am doing this because its right and its right for me because its right for you’. That’s a very powerful thing to get across and I think therefore businesses that have managers who have got serious skin in the game, not short term bonuses, I don’t get a bonus quite interestingly I don’t, I have never been paid a bonus in this company because if you do you make bad long-term decisions about the future of the wine industry which is a long-term industry. So I have always not had a bonus but I have always had skin in the game.

Elliot Moss
If you want to change that I can talk to the CEO and maybe we will have a conversation with him. Unfortunately it is Frazer Thompson and he is not going to give himself a bonus – amazing, it’s nice to hear things like that. Fantastic to interview you, what is your song choice today and why have you chosen it?

Frazer Thompson
Well I remember hearing a Levi’s commercial with a song by Screamin Jay Hawkins on it called Sunset and Vine and it made me smile and I thought ‘this guy has got the most incredible voice’ and so I did a bit of looking around and I listened to a bit of Screamin Jay Hawkins and the song that makes me smile the most but it fills me with a sense of… it just makes me feel great but it’s also a bit of a piene to Sue as well, it’s called I Put A Spell On You and its the funniest singer I have ever heard singing a song that he is singing it from his heart and he is putting a message across that he just is so bloody lucky and that he’s put a spell on this woman that he wants to be with. I feel a bit the same as that without sounding overly schmaltzy but the best bit is actually right at the end where he suddenly goes bonkers and that always makes me smile no matter how many times I listen to it. So I just think if you have never listened to Screamin Jay Hawkins, he’s a nutter, get into him.

Elliot Moss
Here he is. Thank you very much.

That was the quote, unquote Bonkers sound of Screamin Jay Hawkins and I Have Put A Spell On You – the song choice of my Business Shaper today, Frazer Thompson. A really good example of someone who was totally clear in their thinking. He saw what needed to be fixed and he went and fixed it. He focussed on quality products and the role that they played in making sure the business was going to be a success. And above all else, he understood the importance of humility and developing a sense of that. Fantastic stuff. Do join me again, same time, same place, that’s 9.00am here on Jazz FM for another edition of Jazz Shapers. In the meantime though stay with us because coming up next it’s Nigel Williams.

After graduating in 1981, Frazer, as a Geordie, was drawn to beer. By the age of 29, he was made a director of Whitbread plc. having led the team behind the success of Boddingtons in the early 90s with its famous advertising and draughtflow widget. He was poached by Heineken NV in 1995 to become Global Brand Director for the Heineken trademark, the first non-Dutchman to take the role. He travelled the world marketing beer.

Frazer became Managing Director of Chapel Down in November 2001. Since then he has helped to raise the profile of English wine to such an extent that demand now vastly exceeds supply (a complete reversal of fortune). He has made the largest English wine company profitable, developed a well-respected and valuable premium brand and successfully secured five rounds of fund-raising, whilst creating a Board and building a team. In September 2014 he raised a further £3.9m in what was the world’s biggest equity crowd funding, in record time and a first for a listed company.

Chapel Down wines has won many international awards, including three Gold Medals (of 229 awarded globally) at the Decanter World Wine Awards 2013. In 2011 Frazer launched a beer using winemaking techniques – Curious Brew – which promptly won a Gold Medal at the International Brewing Awards and Trophy for Best lager beer under 5% abv in 2012.

Follow Frazer on Twitter @englishwines

Listen live at 9am Saturday.

“…one of my mantras is to try and go to bed just a little less stupid than I was when I woke up.”

“I had been given this fantastic opportunity to go around the world selling beer with Heineken – it doesn’t get much better than that as a Geordie, I can tell you.”

“Nothing is ever as easy as you think it is going to be on paper, and the first thing that happened was the Gulf War. Forty percent of our sales disappeared overnight because British Airways had decided not to stock wines on flights internally.”

“…about three days into the job, somebody came to repossess the photocopier. Now that didn’t happen at Heineken and it never happened at Whitbread either…”

“You absolutely stick to that plan, that you have got to make great products, you’ve got to make a product that you feel passionate about.”

“People and product, that’s what great investors are going to back.”

“In 2004, two things happened. One awful and one very good. And the awful thing actually turned out to be quite good…”

“…particularly when you do crowdfunding, which is becoming very popular at the moment, you need to have real empathy with the people who own the business.”

“That continual search for that extra layer of complexity, that extra layer of something that nobody else can do, is the thing that still drives us to this day.”

“I was the guy who put the widget in a can of Boddingtons…”