The Perfect Pairing: Julian Metcalfe and Robert Jakobi Big Interview

Passion is powerful. And Julian Metcalfe is certainly passionate about food. He co-founded Pret a Manger in 1986, launched Asian restaurant chain Itsu in 1997, and started Metcalfe’s Food Company in 2008. Initially set up to supply bagged popcorn to Pret and Itsu, Metcalfe’s soon launched a range of corn-based snacks into the supermarkets, including popcorn, as well as a range of Itsu-branded products like instant noodles and miso soup.

All three ventures can be considered highly successful. Indeed, Metcalfe found himself at number 61 in The Grocer’s first Rich List published in June, his fortune estimated at £140m. So if he chose to, Metcalfe, who remains a “significant shareholder” at Pret, could indulge his passion for food by munching his way through the Michelin Guide. 

“You know you’ve cracked the recipe when you approach madness -that’s when it’s as good as it’s going to be”

Instead, last night, and every night “for the last five months”, he’s been hunched over a blender in his kitchen, trying to create the perfect smoothie for a new range of Itsu vegetable juices called Purify. 

“You know you’ve cracked the recipe when you approach madness,” he laughs with the zeal of the obsessed. “And that’s probably when it’s as good as it can be.” 

Listen to him rhapsodise about differing combinations of apple, kale, cayenne pepper and tarragon, though, and it’s clear that he’s affected with the very best kind of food madness - a twisted genius born to dream up what the rest of us want to eat next. And crucially, when it comes to turning creativity into cash, that wild imagination is balanced out by Metcalfe’s MD, former hedge fund manager Robert Jakobi, who is equally passionate about the food business, but in a steely, simmering way. 

When opposites attract, there is always a story behind it. Jakobi teamed up with Metcalfe in November 2010 after bombarding him with weekly emails for two months straight, seeking a meeting to persuade Metcalfe to stock Jakobi’s pet project, a cutely packaged box of chocolate-covered edamame beans called Podbites he felt would be a perfect fit for Itsu. 

When Metcalfe finally acquiesced to a meeting he was so impressed by Jakobi he ended up offering him the job of Metcalfe’s MD instead (plus the listing he originally came in for). Since then, Metcalfe and Jakobi have built up a team of 24 people operating out of a modern office in Westminster. Next year they expect that number to hit 40. And experience of the food and drink industry is not required. 

“If you want real innovation you need people with an open mind on packaging, size and taste,” believes Metcalfe. “That’s what makes this company completely unique.”

 

A run through the numbers suggests the combination of Metcalfe, Jakobi and a growing team of left-field thinkers is working a treat. 

“Our year end is 31 May and our EBITDA was just over 7%,” fires Jakobi. “Sales were £9.2m. Pre-tax profit was £510k, and we were very happy with that. Last year in the Sunday Times Fast Track 100 we were listed as one to watch, because you have to be trading five years to make the list and we had been trading for four. This year I think we have a good chance of being included in the main table because we have gone from £300,000 to £1.5m to £3.2m to £9.2m in the space of four years.”

They aren’t yet listed on The Grocer Fast 50 either, as they haven’t exceeded sales of £5m for the past two years, but it looks only a matter of time. And while Jakobi keeps his eyes on those rapidly advancing numbers, creative director Metcalfe is free to immerse himself in innovation, tinkering with everything from the balance of flavours and the “grammage” of the exclusively imported crystal noodles in the new Itsu noodle pots, to the shape of the ‘spork’ (a cross between a spoon and a fork) that comes packaged inside. 

“We made eight moulds, costing £1,000 a time, to get that spoon right,” says Metcalfe lovingly. He recalls long team meetings where he pushed hard to keep improving the spork while the majority of the team pushed right back. He eventually won the day. And it is a very nice spork indeed: bright pink, translucent, aesthetically pleasing yet very functional (“with earlier designs you couldn’t get quite enough liquid…”) 

Even if it is a very expensive spork it doesn’t matter, he insists, thanks to his firm belief that consumers will pay a few pence more for genuine quality. 

“The cost of innovation is mind-boggling, yet you can make a real difference if you’ve got the guts and the tenacity,” he argues. “We’d rather do it beautifully because there are enough people who want to eat beautifully. Robert allows us to spend thousands on developing innovative products without a single customer or a listing, because he trusts me. If I consistently failed I think he would get upset, but so far we haven’t.”

Metcalfe also knows he can push the boundaries because whatever he dreams up, Jakobi will keep the business rooted in reality. 

“All the creativity is completely useless unless it’s governed properly,” he says, pointing at his young MD, who nods back. “I oversee everything,” says Jakobi. “I have the final say. If it doesn’t work commercially, or the sales team don’t like it, then we don’t launch it.”

While there are inevitable failures - an early incarnation of the Itsu pots that used “difficult to eat” udon noodles, for example - what they do launch usually works. The new Itsu pots went into 1,230 stores in September, including Sainsbury’s, Tesco and Waitrose, and sold 25,000 inside three weeks. According to Sainsbury’s, sales are growing at 72% week on week. And it’s not just the noodles flying off the shelves. Waitrose says sales of Metcalfe’s seaweed thins are up 95% year on year, Tesco says Metcalfe’s Miso soup sales are up 70% year on year and Nielsen says Metcalfe’s Skinny popcorn is the fastest-growing popcorn brand in the UK with 7.1% of market share, ahead of Tyrrells and Propercorn. 

Hurtful and distressing

Both believe a key reason for their successful rate of innovation is that being a small agile operation allows for speedier turnaround times when ideas get the green light. “We can launch a product in three to six months,” says Jakobi. “Big companies take three years.”

Or they can take a short cut by copying them. “On the one hand, it’s flattering,” says Metcalfe. “But sometimes it can be hurtful. And it can be distressing when you build a good relationship for three years with a big retail partner, then someone else comes along, copies your product, then sells it for 2p less. Because that 2p is so important. It is everything. So when we lose half a million of business to someone that has taken the 2p off, it rips the heart out of our innovation, which is what makes us unique. It happens all the time. But I wish it happened less.”

Fortunately, he says, the market is changing. Supermarket buyers are becoming more excited about innovation. “We can’t compete with Walkers and big companies like that when it comes to listing fees,” says Jakobi. “They can pay to get on the supermarket shelf. We can’t do that, but we can add value by innovation.”

“In the past buyers haven’t really been interested, they were not willing to take risks,” adds Metcalfe. “But in the last couple of years, buyers are changing. Waitrose, for instance, they want NPD, they want innovation.”

So, it seems, does the rest of Europe and, potentially, further afield. Metcalfe’s Skinny launched into France, Belgium and Spain in June and the next destination is New York in 2015, the first port of call in an attempt to spread Metcalfe’s Itsu grocery range across the US. 

“Pret started in New York and went from there,” says Jakobi. “It took them a long time but now they have cracked it.” 

You wouldn’t bet against Metcalfe’s doing the same. But you might bet on them doing it faster.