How SVC found its place in an exciting new industry

 

Our managing director, Christian Sanderson spoke to Platinum Business Magazine about how and where it all started as well as offering exclusive insights into the industry with his predictions of the future.

Christian goes into detail of the motivation behind the beginning of our e-liquid, CBD and Hemp product portfolio. 

Please can you describe what your business does?

SVC Labs Group is a vertically integrated Hemp, CBD and E-Liquid and manufacturer & distributor.

SVC LABS LTD was founded in 2014 with the aim of providing our customers with the best E-Liquids on the market, and a gateway out of smoking. SVC is now a volume driven E-Liquid / CBD / Bulk Raw Material / White Label and Co-packing Manufacturer based in Gatwick, UK. We produced over 8 million units in 2018 and are currently on track to do over 12 million in 2019 to over 20 different countries.

HONEST HEMP is a pioneering British Hemp & CBD producer with an end-to-end UK & European supply chain consisting of UK agriculture, extraction and finished hemp/CBD bulk and finished products. The long-term goal is a fully integrated UK supply.

VAPE SIMPLE is our B2C retail platforms with a store bolted onto our factory in Crawley and online presence. We offer our loyal customers value for your money and savings you won’t see anywhere else; straight out of our factory!

Why did you start your business?

I wanted to get off the cigarettes but I was addicted to nicotine. After years of trying everything under the sun to kick the habit and failing I was introduced to an "E-Cigarette" or "Vape Pen” back in 2013 and they just worked for me. Before I knew it I had accidentally given up smoking and my passion now is helping others to do the same.

Did you see a gap in the market or is it a product you have a passion for?

Both to be honest. I will always have a personal connection to the business as it changed my life for the better. At the time there was very little choice or quality UK products or manufactures on the market. I have always had a passion for British manufacturing and innovation so I approached my business partner, presenting my business plan and off we went into an unknown world of E-Liquids.

Coming from a fashion & design background I knew very little about manufacturing so the learning curve was steep. However, 3 years in we moved to our 12,000 sqft state of the art facility in Crawley with a 54 strong team.

How has the vaping market changed since its inception?

The vaping marketing is an ever-changing landscape, so keeping abreast of the innovation, legislation and consumer demands is key.

When we started there was just over-priced American-made liquids or cheap, unregulated Chinese liquids on the market. We entered the market as a single branded company called Simple Vape Co (SVC) with only 6 flavours. It was soon evident we had to diversify. during our second trading year we launched two new brands and opened our White & Private Label arm which saw us grow from £260k revenue in year 1 to £1.7m pa in year 2.

We have now opened up international distribution channels into the US, EU, Canada, Russia and Malaysia. We export over 40% of our products to the EU and 10% to the rest of the world.

What are your most popular products?

Our new Hemp and CBD products based products are our leading product category. Our Key products are CBD Tinctures/Oils, Edibles, Topicals & skincare and bulk raw materials. We also have some great new products in development which will focus around hemp textiles.

Hemp & CBD is another product I passionately believe in and this plant has the power to change the world for the better.

How safe are e-cigarettes?

According to Public Health England “E-cigarettes are 95% less harmful than smoking.” It is simply the best alternative choice and nicotine replacement therapy (NRT) on the market. We are also seeing more and more positive studies and reports around the long term effects of vaping.

The Royal College of Physicians released a report back in 2017 named ‘Nicotine without smoke: tobacco harm reduction’, which concluded that e-cigarettes are beneficial to UK public health. Smokers can be reassured and encouraged to use them, as they are much safer than smoking.

How do you see the industry changing in the future?

From a consumer perspective the industry will continue to grow and flourish. From the business side I see a lot of consolidation currently happening and will continue. With Big Tobacco looking to reform its image, more acquisitions will happen and the entry to the market for new companies will become a lot more difficult.

What are your personal and/or business ambitions?

My focus is on the UK Industrial Hemp side of the business. I believe we can complete our full UK supply chain by 2021, which means we would be perfectly positioned if legislations changes around medicinal marijuana, which I anticipate will happen in the near future.

What was the most difficult obstacle you need to overcome?

I found people management most challenging, and equally I have found learning to become a better manager incredibly rewarding. Our fast growth meant we grew from a start up to a full-scale operation within months and we spent 16 months building and implementing our new back end system. Getting staff on board during such a drastic operational change was hard. We brought in a manufacturing consultancy for eight months and they helped us to refine who we are and how we operate.

In 2018, we produced 8 million units on single shifts on a 5 day per week rota, compared to 2017 when we made 3.4 million units on 3 shifts per day on a 7 days a week rota. Efficiency is key.

What advice would you give to start-ups or budding entrepreneurs?

If you are ready to work hard then don’t waste time thinking about it - just go for it. Test the concept, keep it lean, and surround yourself with passionate people who are more knowledgeable than yourself.

Why did you choose to set up in Crawley?

In 2016 we decided to move from Brighton to Gatwick - it was very difficult finding the right place as we only had one full year of filed accounts. However, David Bessant from Graves Jenkins and Michael Deacon-Jackson from FTDJOHNS believed in SVC and help us find the perfect facility. We got the Keys in June 2017 and within 5 months we had fully fitted the unit out with ISO Class 6 labs, state of the art automated machinery, 3000 sqft office and warehousing space.

Manor Royal was our chosen destination as we have all our logistical partners around us, as well as great links to the city and airport.

Find the article on page 66 here

 

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Please email retail@svc.co for any queries.

 

Unit 1

Gatwick Distribution Centre

Whittle Way

Crawley

RH10 9RW