We spoke with Julie Chen, CEO and co-founder of The Cheeky Panda, featured as one of 10 Ones to Watch in The Sunday Times Fast Track 2020. Julie has been named as Business Women of the Year by MSDUK.
We spoke with Julie Chen, CEO and co-founder of The Cheeky Panda.
Can you talk us through the growth journey your business has been on over the past 12 months?
We were founded in 2016 and I started the business from my spare room. Last year during lockdown we experienced phenomenal growth because the demand for tissue paper products has massively grown. Suddenly all the supermarkets whose doors we had been knocking on came back to us and asked if we had stock. That’s when the demand really spiked, when all the toilet paper aisles were empty.
In the beginning we were only selling online and working with a few high street stores in London. Later we started working with companies like Whole Foods Market, Ocado, Boots and Superdrug. This year we sealed a deal with Waitrose, so we are now in over 200 Waitrose stores. We are a best seller on Amazon.
Our revenue has grown significantly in the last 12 months. Our sales increased from £100,000 in 2017 to £5.7m in 2020. We are forecasting around £11m for 2021 and to reach £50m by the end of 2023. Our team has also grown – from just 10 people to 32 people globally in 12 months.
What has worked well?
We have a wide range of product categories – household tissue, toilet paper, facial tissue, kitchen towels, baby wipes and nappies. We launched a beauty category last year, in which we have makeup removal wipes, and we have a business category in which we sell bamboo paper straws and big jumbo rolls for offices. So, whilst our product has different categories, the only material we use is sustainable bamboo.
We have very clear unique positioning focused on plastic free, sustainability. The type of bamboo we use to make toilet paper is like a weed which grows quickly. It’s highly renewable. In the growing process it releases more oxygen and absorbs more carbon - so the process is very good for the environment.
On top of this, we don’t just do sustainability, we promote sustainability in our own cheeky way. We want to make sustainability fun. Our mission is to combat climate change using this sustainable material, bamboo. But we do it in a fun, cheeky way. We wear panda hats when we go to events and our communication on social media is very cheeky.
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How have you found the balance between thinking strategically about your business vs. dealing with operational changes and challenges presented by the past 12 months?
It is quite hard. I juggle a lot, particularly when the business is growing fast. I would like to spend more time on strategy and efficiency.
But we are hiring experienced people who have gone through the journey before. Giles Brook, who was CEO of Vita Coco and grew the business to £300m in the last 10 years, is joining us as a non-executive director. With people like this joining the business, who have done FMCG before, that may help me to be more focused on things that I can do best.
As the business has grown, I’ve learnt that we need to balance passion with experience.
What is the outlook for your continued business growth in the coming 12 months?
We expect to keep growing post pandemic and hit forecast targets month on month. Our product feels good and the quality is good, so as new customers try our products, they never go back. We have built a loyal community of customers quickly.
Many sectors continue to experience a skills shortage coming out of the pandemic. Are you finding it difficult to find the right people?
I focus on efficiencies. For us it’s not about hiring a lot of people. It’s about using technology to manage the efficiency of the growth. If we invest in IT, that will reduce human error. The employees we hire would just oversee and manage the IT process rather than having to manually do things. That is how we will scale the business going forward.
How do you think your workforce will change over the next 12 months?
We will hire more senior managers to build a professional management team to take our business to the next level. The next stage is to go from £10m to £20m turnover. Our current team has great passion and experience but going forward we need professional managers – people who can do a better job than myself and my co-founders in managing some parts of the business. I may let go of some functions and focus on areas where I am strongest, such as new product development.
We offer a career ladder so people can progress within the company. I try to encourage a learning culture where people build a solid foundation to be able to progress to the next level. We hire a lot of young talent who are keen to learn and progress. It’s a fast-paced environment in our business and there are opportunities to grow and progress fast as well.
And all our people are passionate about the impact they can make by working for Cheeky Panda. That’s why they are loyal to the brand as well. They want to work with Cheeky Panda and contribute more to save trees and combat climate change.
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Where do you see the main growth opportunities for your business?
We hope to work with more supermarkets and retailers in the UK as well as in Europe. There are opportunities globally and we will be expanding globally – in Singapore, in China – markets where customers are looking for more eco-friendly premium products. We are launching in the USA, as we have sealed deals with big retailers there.
What do you see as being the biggest risk to your business’ growth in the coming 12 months?
Global shipping is very uncertain at the moment. There are increases in shipping costs and delays in global shipping as well. We just have to get through this period and hope it will resolve itself.
Has the current economic climate affected your plans to expand overseas?
There are tariffs for products going to America, for example – 25% tariffs on anything that comes out of China. Things like this affect our margin. Also, the social climate, political things in Asia are outside our control. All we can make sure is everything is sourced sustainably.
Our long-term plan is to do ‘near sourcing’, to grow more bamboo locally – in Africa and closer to Europe or America.
Have you seen more engagement from customers on the ESG agenda?
Definitely. We are working with companies that are keen to meet the UK’s net zero target by 2050.
We calculate the carbon incurred in our business and supply chain. We audit our carbon that is incurred in harvesting, manufacturing and distribution. We offset our carbon with the Worldland Trust by regenerating the rainforest.
With our audited carbon data, we can help our clients with their 2050 UK net zero targets.
Our data can be easily plugged into their reports, to help them understand how much carbon they are saving by switching tissue and consumer goods to Cheeky Panda. We do see there is a lot of demand from customers and clients who are looking to meet these targets and use Cheeky Panda as a solution.
To what extent has ESG and sustainability awareness driven your business’ growth?
The Cheeky Panda brand is built 100% on ESG. ESG is our core. We are B Corp certified and all our materials are FSC [Forest Stewardship Council] certified. I am the majority shareholder of the Cheeky Panda business as well – we have an ethnic minority female founder.
In 2020, when we turned over more than £5m we saved about 60,000 trees – 60 times the number we saved in 2016. This year we are looking to save about 140,000 trees. In the next few years when we scale up to £50m turnover, we are looking to save about 600,000 trees. The more we sell our products the more money we donate to the Woodland Trust to regenerate the rainforest and the more trees we save from being cut down to make toilet paper.
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Cheeky Panda has B Corp Certification. Why did you choose to go down the B Corp route?
B Corp is the highest standard for businesses that aim to balance social, people and environmental issues and profit. We wanted to be part of this community. It’s a gold standard to guide us in terms of running the business. Every three years we are audited and we want to improve our scores, so year-on-year we review the things that we could improve. We were already B Corp certified from 2017, so we built the business correctly from the start.
What are the main drivers behind your decision to go for an IPO in future?
We do have approaches from PE houses or other businesses interested in acquiring Cheeky Panda. But for us, it’s not about being acquired by a bigger company. The brand might be diminished and be forgotten.
For us it’s about creating a bigger impact. It’s about our values – bringing out more innovative products and saving more trees. By being an IPO company, we are owned by the public. We would like Cheeky Panda to be owned by people who want to make a difference, who believe in our values, who want to help Cheeky Panda become a bigger brand, and the best sustainability brand.
If you could share a single learning for business leaders, what would that be?
The important thing is to believe in your vision. That’s the number one priority. To ask why your business exists. What is the purpose or what is the value of your business? Will our values sustain us as we go through these uncertain periods? It’s about believing in your vision and your value.
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