Entrepreneurs: PACK’D is the smoothie start-up clashing with Tesco

For two long years Luke Johnstone lived in his parents’ Herne Hill garden shed, drove across London at 6am with a car packed with fruit and vegetables, and worked 12-hour days selling healthy smoothies at Broadway Market with his childhood friend Alex Stewart. “Then I’d get home late, prepare the next day’s produce, go to bed and start all over again.”

“We were,” Johnstone adds, “totally skint, just trying to earn the cash to launch our business idea — PACK’D: selling DIY bags of flash-frozen fruit and vegetables with sachets of ‘superfoods’ to make at-home smoothies.”

The hard work paid off: the two years of market takings plus maxed-out overdrafts finally gave the pair enough cash to source a large-scale supplier and secure shelf space in first health-food shops, then Sainsbury’s and Tesco, sending revenues to £1.3 million last year.

“So we were devastated,” Johnstone says, “when a customer got in touch to ask if it was us making Tesco’s version of our smoothie kits — because they looked identical.” PACK’D Energy Smoothie is sold next to Tesco’s Energy Boost Smoothie. “They have nine out of 10 identical ingredients, and although the quality of our produce is higher, that’s hard to prove — with the Tesco version being much cheaper, it’s really having an impact, but we can’t really do anything about it.”

“We understand,” Johnstone adds, “that supermarkets launch similar products but there needs to be tighter protection for the intellectual property surrounding new products.” Stewart says he started “dancing around the room” when Tesco first agreed to sell PACK’D.

No longer. “While Tesco publicly appears to have improved its reputation for dealing with small suppliers, our experience has been very different.

“It’s hard to speak out because they hold so much power when you are a small business,” says Stewart. The entrepreneurs have an upcoming meeting with Tesco’s buyers, and hope that building their brand via social media will help aficionados pick PACK’D over own-brand copies.

But it’s just the latest hurdle for Stewart and Johnstone, who started their business after Johnstone was working on BBC wildlife programmes with a evening job as a coach at Brentford FC.

“I wanted natural, targeted nutrition to fuel my performance at work and in sport — but the pre-bottled smoothie drinks marketed as ‘healthy’ contained high amounts of sugar,” he explains. “I wanted to create a shortcut for the ultimate homemade smoothie.”

It wasn’t hard to convince Stewart to come on board: “I was working at Deloitte on a PPI project at the time, slowly losing the will to live,” he says.

The pair had no business experience, but sought advice from The Prince’s Trust — Johnstone is now a young ambassador for the charity — “as we didn’t know where else to turn”.

They eventually secured a £25,000 loan from Virgin Start-up — “which we’re still paying off” — to create a first run of their frozen PACK’D.

The shop opposite their Hackney stall, Eat17, agreed to be their first stockist after the pair, who are both now 29, sold them on the idea that their smoothie kits contained five times less natural sugar than rival bottled smoothies, and used whole fruits and vegetables rather than purees and juices.

“From there, demand snowballed,” Stewart adds. Stockists multiplied and PACK’D, which has headquarters in Southwark, then drew in £150,000 in angel investment — backers include David Krantz, founder of clothing brand Racing Green, and Robert Porter-Smith, founder of the maker of Nak’d and TREK nutrition bars. The company has now also completed a £540,000 crowdfunding on Crowdcube.