“A lot of the big players in the label industry are moving in one direction,” explains managing director Stuart Kellock. “They are pooling their manufacturing and sales and bringing it all under one roof, no doubt for productivity reasons. We are moving in the opposite direction. We always seem to be doing this – going against the flow – which is slightly weird but fun, exciting.”
And risky. Those who take Kellock’s path can – and sometimes do – overreach themselves. Business expansions of this nature can spread your print company’s resources and expertise too far, too thin. Label Apeel was without doubt going far. But was this one step too weird and one step too far?
The challenge
Kellock’s company took the high road to the Lowlands of Scotland about 12 months ago. Here, seven miles from Stirling, along the Whins Road in Alloa, is the new Scottish sales office of Label Apeel. But if this move was risky, it wasn’t rash. Kellock had been “very quietly, under the radar” checking out what was happening up in Scotland for several months.
Label Apeel has form north of the border. The company has had Scottish customers for years; its first big one being the Saltcoats-based travel agent AT Mays back in the 1990s. The reason his company got the order, he recalls, “was because we were the only people prepared to travel up to see them and work with them face-to-face to resolve their problems”.
This was an early lesson he was not to forget and it formed a guiding principle for doing business in Scotland and elsewhere.
“Scotland has become a significant market because we are prepared to serve it. We will travel up there to speak to customers. We do our groundwork. Over the years we gained other customers, but it was always on a bit of an ad hoc basis. We really wanted a more systematic approach to give more focus and intensity to the service we give. The move to Scotland also had something to do with the way the market was evolving and the sense of localism that is unique to the Scottish.”
10 years ago Label Apeel, already big in wine labels, entered the burgeoning market for craft beers. A few years later came the gin boom, which steered the company into the spirits market – short-run, high-quality labels for gins with zingy names and whisky sporting more rugged motifs. The company, says Kellock, decided to take a “closer look” at this colourful turn in the market.
“There’s a big Scottish gin culture and a lot of local foods that suit the kind of digital processes and finishing capabilities we offer. Our USP is in techniques such as foiling, embossing and screen printing. That is where we separate ourselves from the crowd. Around this time distillers were starting to approach us in search of very high-quality short-run labels.”
The method
This demand was, and still is, served from the Label Apeel base in Leicestershire from equipment including an HP Indigo digital label press. The new outpost is for sales only and is no more than about 30m² in the Alloa Business Centre, Clackmannanshire in the Central Lowlands.
From this office Label Apeel is working with several Scottish drink brands including Innis & Gunn, House of MacDuff, William Grant & Sons, Moray Distillery and Kilchoman. It is currently staffed by one person, business development executive Stephen Anderson, who joined the company in May 2017 and has a background in sales and marketing for high-street brands.
Kellock was keen to keep it low-key and personal to start with and refers to the expansion as a “testbed”. Staffing, equipment and investment levels were kept small for the time being. There was plenty of time, he reckoned, to expand this expansion as demand in Scotland took off, maybe even put a press on the floor of a bigger premises in due course.
“For us, what we are doing is testing a model. We want a small, localised business contributing to the economy here. When you deal with people you have to go that extra mile, put yourself out and talk about their issues and solve them. We see people wanting a more hands-on approach from a local player. By keeping it small, we keep it personal – and cover our bases.”
Scotland, he insists, is a fantastic place to be operating at the moment: “There’s a lot of innovation and business going on; they seem to have a really good steer on their heritage. They have been doing localism for 25 years and know how to work that. Using locality for branding is part of what they do very well. And we have a label to take them to the next level.”
So do others: “We know there are good label printers and we are going up against some of the big boys who are very keen on price. We don’t want to take work away from them or get into a price war. But we do want to add value to people who are looking for a product that we can supply.”
The result
One of those is the House of MacDuff, which bottles private casks under its own-label, Golden Cask, as well as its own-blend Burns Nectar. Anderson developed ideas alongside the client to maximise benefits for the brand.
Within three months of opening the Scottish office, Label Apeel had caught the eye of several big names in the drinks industry, impressed by existing work with Warner Edwards and South-Western Distillery. Anderson is working with Innis and Gunn on technology and branding, while William Grant & Son is developing a Glenfiddich label for export to Sweden.
In soft drinks, Label Apeel’s Scottish office is collaborating with NB Gin and Bon Accord on a tonic label. A rebrand with the Isle of Skye Candle Company will involve new processes and techniques for branding. Anderson is also working with design agencies, embedding himself in the creative process. The physical fruits are rolling off presses in Leicestershire, but for how long?
Kellock reckons within 18 months the Scottish branch could have a digital press, maybe another HP, a host of finishing kit “with all the whistles and bells” and two more staff. This would cost around £500,000 and involve financing deals – “a bridge we’ll cross when we come to it” – but is more than just a bagpipe dream.
“Based on current growth levels it is clear this market has accepted us. Our business is seeing significant growth and we are picking up customers every week – not just drinks but high-end food, because the desire for decoration in labels is strong. We are looking at £200,000 turnover this year; in two years we’d like around £500,000 before putting a press on the floor.”
He adds: “If this testbed works well in Scotland it could be rolled out in other areas such as Ireland, northern Europe, maybe even the US and Australia. In 18 months’ time I could be talking to you from Walloon.”
Vital statistics Label Apeel
Location Thurmaston, Leicester, and the Alloa Business Centre, near Stirling
Inspection host Managing director Stuart Kellock
Size Turnover: £5m; Staff: 56
Established 1994
Products Short-run, high-quality labels with hot and cold foiling, varnish and metallic finishes and scratch-off panels for spirits, craft beers, organic food and cosmetic brands. Clients include Chase Distillery, Broadland Wineries, Dynamite Baits, Bomb Cosmetics, Aldi, Budgens, Mezan and Harrods
Kit HP Indigo WS6800 digital narrow-web label and packaging press, two MPS Systems flexo presses and a host of AB Graphic finishing kit
Inspection focus Setting up a regional outpost
TOP TIPS
Check your business can be duplicated by asking yourself ‘what are the keys to my current success and can these be transplanted to a new location?’
Size up the local competition to see if the existing print market is strong and well-established – you might end up triggering an unwanted price war, warns Kellock
Check staffing needs and make sure you have enough local talent to manage your new location and provide a big enough pool of qualified potential employees
Avoid duplication: being in two places at once can become bureaucratic so think about accounting and inventory systems, website platforms and HR practices
Plan for growth by making sure you have a clear strategy for business expansion and investment over a specific period of time
