From Acquisition to Reflection: 1 year+ Unfolding with Lean Caffeine

Time has flown by in a blink, and here we stand, a year after Octillion acquired Lean Caffeine – a bold move that set the stage for KC and I’s journey into new horizons. Lean Caffeine and its sister brand Clean & Pure were the first acquisition in a series of 20 CPG brands Octillion will be acquiring in the next 5-7 years.

This strategic acquisition was driven by its strong alignment with Octillion's overarching mission. The profound synergy between our passion and its potential, paved the way for harnessing exponential value within a five-year trajectory, harmonizing seamlessly with the prevailing macro-trends in the realm of superfood and beverages.

The Post-Acquisition Journey: What Unfolded Next

In the immediate aftermath of acquiring Lean Caffeine and navigating the integration phase, a challenge emerged within the supply chain of our flagship product – an ultra-clean bone broth powder. Internal supplier production issues cast uncertainty, jeopardizing our ability to offer this product to our loyal customers. Merely two months' worth of stock remained, marking a 20% decline in revenue.

This unexpected setback tested our aspirations, urging us to embrace, discipline, agility, and innovation. Through these trials, we forged a path to surmount the challenge, transforming what once hindered us into a cornerstone upon which our business values now firmly rest. Disciplined people, engaged in disciplined thought, taking disciplined action.

With a bootstrap mindset, our business has thrived despite minimal financial backing. Employing a prudent financial strategy, we've leveraged a robust financial framework, including strategic partnerships such as an invoice finance provider, and a conservative line of credit. These strategic measures, among other factors, have facilitated strong growth in our business.

From Feb 2023 to Dec 2023, we experienced an impressive average m-o-m growth rate of 10%. This growth underscores our unwavering commitment to our business's success, our dedication to providing exceptional products, optimizing profitability, and meeting our financial commitments.

Operating with excellence: Some things we’ve done since acquiring the business

Initially, the business functioned under an owner-operator model, bringing with it significant key man risk. To counter this challenge, we undertook the crucial task of transitioning the business from solely residing within the previous owner's perspective. Through meticulous effort, we mapped out every process and put in place a robust documentation process. This compilation now serves as a comprehensive knowledge repository, fostering clarity across different business divisions and facilitating smoother talent onboarding.

Moreover, our endeavor to codify these business processes has yielded substantial benefits. It has granted us a panoramic view spanning the entire product supply chain, logistics operations, and internal workflows. This newfound visibility has proven invaluable, as it has allowed us to discern bottlenecks and proactively implement enhancements throughout the brand's operations. Being an Amazon-first business, for now, our operations have revolved around the platform's ecosystem. However, this approach inherently places constraints on our access to valuable customer insights.


Due to the intermediary role, Amazon plays between us and our customers, we find ourselves somewhat distanced from direct interactions and comprehensive data. This limitation hinders our ability to deeply understand customer preferences, behaviors, and needs, which are essential for refining our products, enhancing user experiences, and establishing long-lasting customer relationships.

To gain a deeper insight into our dedicated customer base, we conducted an extensive customer survey. The results were truly captivating, providing us with invaluable insights. These revelations have not only guided the creation of our mini-brand, Brook, along with its associated guidelines, but they also form a solid cornerstone for our comprehensive rebranding endeavors.

After successfully expanding into Amazon markets in Germany, Spain, Italy, France, and the Netherlands, the trio of people, processes, and systems emerges as a pivotal force propelling transformative change. As evidenced by the impressive surge in Monthly Recurring Revenue, a critical contributor to this growth is the establishment of a resilient inventory and order management process.

Initially, the manual execution of orders, sporadic order placements, and uniform inventory levels across all products, including those with lower sales, marked the landscape. Moreover, inventory was distributed across two distinct locations: (1) Amazon UK fulfillment warehouse and (2) Supplier warehouse responsible for fulfilling website orders.

Centralizing the order management process emerged as a pivotal shift, realized through the integration of a system within the Linnworks platform. This implementation offers elevated visibility across all SKUs, facilitates purchase order placements, and furnishes various functionalities. Simultaneously, relocating over 50% of our stock to Amazon warehouses has proved advantageous, as Amazon efficiently fulfills both website and direct orders.

Notably, this adjustment has precipitated a reduction in website shipping times from 3-5 days to a swift 2 days, significantly augmenting the customer experience. Internally, our proprietary systems provide insights into raw material consumption, aided by our special rules and automated processes to swiftly rectify potential issues.

The inaugural year following the LC acquisition has been marked by osmosis, stabilization, and incremental advancements, rather than a swift surge in growth. This signifies the commencement of Phase II in our journey.

Looking Forward:

• Building Culture: Culture is a funny thing, you can’t see it but you can feel it – you feel it with LC • DTC Focus: After stabilizing our Amazon operations, we're now zeroing in on our direct-to-consumer strategy, with a focus on content (video in particular), partnerships, social ads, and community-building. • Retail Expansion: We aim to introduce our flagship products to retail stores in the coming year. • Growth Capital: We're amid a capital raise to further expand the business - A £50M exit opportunity is what we are working toward • Instating Leadership: We're looking to establish leadership in key areas, including DTC and retail. • Brand Enhancement: We'll continue nurturing our brand presence in the verticals we operate in. • Product Launches: We're gearing up to introduce six new products in the next year.

Conclusion

It is not easy, but a brand is about consistency, each detail must be paid very close attention to because consistency builds trust and trust builds a business.
The customer can tell when a brand loves its customers, and that love is appreciated – Love scales. Octillion also acquired another larger brand in Q1 23.

Do reach out to us if you’re interested in finding out more or feel like you can be a value add.