The CEO planning for global expansion one nose at a time

There seems something slightly improbable about a purveyor of fragrances putting in a stellar performance precisely when the world is gripped by an illness that robs people of their sense of smell.

Oliver Mennell, CEO & founder of Harrogate-based NEOM Organics.

But Harrogate-based NEOM Organics, most famous for its scented candles and reed diffusers, has indeed taken the world’s noses by storm, and is now the UK’s fastest-growing wellbeing brand.

In 2020, sales increased over the year by 84 per cent to £28.9m, and its active customer base increased by 120 per cent. There have even been flotation rumours, although these have so far drawn no comment from the company.

Sign up to our Business newsletter

Sign up to our Business newsletter

“We’re in a really fortunate position,” CEO Oliver Mennell told The Yorkshire Post. “We almost doubled the business in size last year, and this year we grew by over 65 per cent in the first six months. And that’s mainly just UK business – before we start talking about international growth.”

After making inroads into the US market, the company has just opened a fulfilment centre in Martinsville, Virginia. Early indications are that the annual growth rate in the US will be north of 250 per cent.

“People are spending more on the first order in the US than they do in the UK, and they’re coming back quicker for their second order,” says Mennell.

“I know the US can be the graveyard of British brands, but so far it’s looking really good. I’m just hoping that we can be one of those brands who really succeed there, because the market is five or six times bigger than the UK.”

Another market Mennell sees as a potential happy hunting ground is China, where the well-being sector is growing at pace.

“There is something in China called the 9-9-6 culture, which says that in order to get ahead in life, you should work from 9am till 9pm, six days a week,” says Mennell.

“It’s having a massive toll on people’s wellbeing. They’re suffering just as much, if not more, from poor sleep, low energy, high stress, as we are. So we think the market is ready for a brand like NEOM to come in and help consumers in that way.”

Mennell has come a long way in his business career, but if he’s now plotting global domination, it’s perhaps not entirely surprising.

“My dad had probably had me in mini business school from a very young age,” he says.

“I was collecting conkers as a seven or eight-year-old, sorting them into big, little and small, and selling them from my school locker for 10, 15 or 20 pence a pop. I didn’t sell many, but it was about the principle of trying to put something together.

“My dad would give me £40 for a £50 pair of trainers and tell me to negotiate a discount for cash. I really didn’t want to do it, but there were always little encouragements like that all the time.

“I also saw him build a business my whole life and I just realised that one day that was what I wanted to do: be my own boss.”

He set up NEOM Organics with family friend Nicola Elliott, an aromatherapist and a former editor of Glamour magazine, in 2005, each of them putting in £15,000 of their own money to sell a concept they both believed in.

“We see ourselves as the intersection between wellbeing, beauty and lifestyle,” says Mennell. “In beauty, for the last 100 years, there have been four categories: haircare, skincare, make-up and fragrance.

“But we’re going into these department stores, and saying ‘We don’t fit into one of your existing four categories – you need a fifth category, which is wellbeing’. We’ve been saying that for the past 15 years, and finally, that’s starting to happen now. So it’s a really exciting time.”

NEOM also has five shops – or ‘wellbeing hubs’, including a very busy one in Leeds – which, says Mennell, are “absolutely crucial for driving brand awareness and engagement”.

But it is online where NEOM is really hitting its stride.

“It was tough in 2020,” says Mennell. “We had a moment of crisis between February and April/May. At that point we were a 70 per cent bricks-and-mortar business, but our stores were closed, our retail partners were closed, and it was crisis time.

“Fortunately, over the months that passed, the sales came in digitally.”

And how. Last year, the company saw e-commerce sales grow by 180 per cent, and four-fifths of its revenues are now attributable to online customers. It’s a business model that was already in the making but has been accelerated by the Covid pandemic, and comes at an opportune time.

Online penetration in the beauty sector is still below 20 per cent, but that’s changing, and as the market shifts away from bricks-and-mortar retailers, NEOM is ahead of the curve.

It has been able to do that in part because of private equity money injected in 2017 from London-based brand-builder Piper – cash it used to invest in its digital infrastructure.

“We built something called NEOM IQ, which is the current technological heart of NEOM,” says Mennell.

“It’s everything from artificial intelligence-driven demand forecasting to a digital supply-chain, which will put in automated purchase orders for us. It’s an advanced customer marketing platform with artificial intelligence in it that can predict demand. It’s really quite sophisticated for a business of our size, and that’s just helping us to scale quickly.”

Mennel now wants the company to achieve B Corp status – which denotes the highest ethical standards across people, planet and profit – by the end of the year, and aims to make it zero-waste by 2025 and climate-positive (i.e. going one better than being zero-carbon) by 2030.

“I’d love to think that we can become an exemplar to the industry in terms of what you can do with sustainability. We are not perfect right at the moment – there’s much more that we can do,” he says.

Now may seem like an odd time for commercial optimism – the economic weather is, to say the least, squally – but Mennell reckons NEOM needn’t worry too much about any headwinds.

“It’s the ‘Lipstick Effect’,” he says. “Essentially, in times of recession, consumers stop spending so much on big-ticket items, but they don’t give up their lipsticks – the little treats that just make them feel good. And that’s us.

“We’ve been through recessions before, and those have been some of the years where we’ve grown the fastest. It’s a very resilient business.”

CV: Oliver Mennell

Oliver Mennell grew up in Harrogate and went to Ashville College there.

Following a gap year when he went travelling, he headed to Nottingham University Business School.

He studied economics, finance, business administration and marketing, graduating with a BA Hons in Management Studies in 2003.

Following a work experience stint at Nikko Principal Investments, the City of London company offered him an internship and then took him on permanently as a private equity analyst.

But within two years he had agreed to go into business with family friend Nicola Elliott, an aromatherapist and a former editor at Glamour magazine.

They founded NEOM Organics – the name is a portmanteau of their initials – in 2005.

He still lives in the Harrogate district with his wife and children.