James Middleton on why his marshmallow business isnt just a jolly

Case study
James Middleton on why his marshmallow business isnt just a jolly
Boomf, James Middletons marshmallow picture gift company, is booming, with its turnover expected to double in 2016
Im sorry about the smell, says a diesel-drenched James Middleton. Ive been fixing one of the heaters in the factory.

The 28 year old, famous to most people who have heard of him for being the brother of the Duchess of Cambridge, and thus uncle to Prince George and Princess Charlotte, rather than an entrepreneur, is more hands-on at his fledgling business than you might expect.

It came close to being hands-off at one point: he almost lost a finger on the production line, he reveals, showing off a thick white scar. Many of the machines in the factory have been rebuilt by him: Ive always enjoyed making things, he says.

Mr Middleton is one of the founders of Boomf, which prints images onto marshmallow squares and posts them out around the globe. He launched the company in 2013 with Andy Bell, who is the digital side of the operation, and it has proved a hit with young Instagram fans, keen to turn their snaps into real-world gifts.

The company is in the middle of its pre-Valentines Day rush, and Mr Middleton has just done two back-to-back shifts, from 10pm through to 5pm the next day. I feel a little wired and emotional, he admits.

Boomf is currently running its machines around the clock: order volumes this year are double those of the 2015 rush. The company runs flat out several times a year, with other peaks including Mothers Day, Fathers Day and Christmas.

A recent TV advertising campaign has helped bring in thousands of new customers, and Boomfs turnover has risen six-fold year-on-year, hitting 2.4m in 2015.

It is a slick operation: the marshmallows are bought in large square bricks, and cut to size before images are printed on them with hi-tech food colouring. Nine squares are sold for 15 online.

The Middletons are an entrepreneurial family. The Boomf facility is based next door to Jamess parents business party supply shop, Party Pieces, on Childs Farm near Theale, Berkshire. This is James Middletons second venture: he previously ran a cake kit business.

It made enough money that I could drop out of university, he said. But it wasnt scalable enough for me.

The marshmallows, which come in letterbox-friendly boxes, or in a new lollipop style, are resistant to knocks and have a very long shelf life because they are mostly made of sugar, which has made the business easy to expand.

Were now in 150 countries, Mr Middleton says. Hong Kong is the next big focus for us, because theres a real gift-giving culture out there.

The company is looking to move into personalised gifts, he says. It recently launched a bunting division, which prints photos onto hand-sewn triangles. Buntella named after Mr Middletons dog, Ella is one of several experiments, including a line of printed soaps.

Mr Middleton feels he has not been treated kindly by the press, after it was widely reported that Boomf lost 250,000 in its first year.

We invested heavily in new machinery, he says. We have a robot cutting machine that we bought bespoke from a company in Leicester, all of our new product development is done in-house. This doesnt come cheap.

Considering that many, if not most, manufacturing start-ups make significant losses in their early years, does he feel singled out for criticism because of who he is?

They always want to trip me up because of my family, he says. Its misinformation, really. I dont care any more, but I worry about the effect on [employees] morale when they read all this negativity in the papers.

Boomf employs up to 100 people in busy periods, falling to 20 in slower months.

People want to feel that their jobs are secure, Mr Middleton says. If he had been asked for an interview by the media outlets that ran the negative stories, I would have given one, but no one actually tried to speak to me, he says.

Fears that the Middleton name would bring unnecessary scrutiny prompted him to be a silent partner at first. When it came to admitting his involvement, youre damned if you do and damned if you dont, he says. I would never abuse my position, and I hope people dont think that.

Boomf is about to close a 1.25m funding round, having previously raised 1m from a consortium of industry figures, including Nick Jenkins, founder of the personalised greeting card maker Moonpig, who is now on the companys board, and Jo Staveley, the former boss of Cath Kidston. These people wont just back a business because theres a Middleton involved, he says.

The business began turning a profit last year and will double turnover in 2016. Recently, it has attracted copycats in Asia.

Were in the middle of legal action, Mr Middleton says, playing a rip-off of his TV ad, which recently surfaced in Hong Kong using Chinese actors.

The best way to stay ahead of rivals is to keep innovating, he say. Boomf is about to launch a talking box, new packaging that can play a tune or a voice recording when it is opened.

Imagine the impact of seeing the pictures and hearing your friend or partners voice at the same time, when youre miles away, Mr Middleton says.

What I really want to do is grow the business by another six times, he says. His commitment has seen him sleeping on stacks of cardboard boxes in the factory after 42-hour shifts.
Guidance to students

Question 1:

Start your answer by explaining briefly what a SWOT analysis is and how it can be used by organisations. Use concepts from Reading 8 to help you with answering this question. Make sure you use your own words to explain what SWOT is. Do not just copy and paste the answer from B100 materials or any other source. There is no set word limit for any one question but the marks allocated to each question give you a clue. We recommend that you use no more than approximately 150 words on your answer to this question.

Question 2:

Then conduct a SWOT analysis for Boomf, based on the information in the case study. Look at strengths, weaknesses, opportunities and threats for each of the three business functions covered in B100 and introduced in Block 1: Human Resources Management, Accounting and Finance, and Marketing. You do not have to have worked through any of the Block 2, 3 or 4 materials to do this. Present your analysis in the form of a 3×4 table, so that you have one cell each for the strengths, weaknesses, opportunities, and threats for each function. Make sure you do not only mention elements of the case but make clear for each of them how it is a strength, weakness, opportunity or threat for that particular function. Again, ideas from Reading 8 will be helpful for answering this question. This is the largest part of the TMA, so you should give a little bit of detail here.

Question 3:

In your answer to this question, state which of the issues you have identified in the SWOT analysis you consider the most important for Boomf to deal with. There is no fixed number of issues that you need to consider here but as a general guidance, you might want to identify somewhere between 2 and 4 issues. Give a reason for your answer. We recommend that your answer to this question should be no longer than approximately 150 words.

Question 4:

Make a suggestion of how the company should respond to the issues you have identified as most influential in Question 3. This suggestion need not be very detailed. However, your suggestion needs to follow logically from your answers to Questions 2 and 3. Your answer to this question should probably be no longer than approximately 80 words.