When Prince Louis was photographed on a balance bike to mark his third birthday in April last year, media around the world wanted to know who the Royal Family’s favorite builder was.
The company in question was Pontypool children’s bike manufacturer Frog Bikes.
Not that he needs royal approval.
Frog Bikes are the market leader in lightweight and affordable children’s bikes, selling around 5,000 bikes a month and stocked at 600 retailers in the UK alone.
It also has an extensive international portfolio, exporting its products to 1,900 stores in more than 50 countries, including the United States, Canada, Australia, New Zealand, China, Hong Kong and a number of countries. Europeans.
By the end of the 2020-2021 financial year, Frog Bikes had reached sales of £12.8 million and made a pre-tax profit of £249,000.
The business is run by husband and wife and sole owners of the business, Jerry & Shelley Lawson, who left their corporate career to design a range of children’s bikes after struggling to find the right ones for their own children.
“We struggled to find bikes as light as we thought,” says Jerry, an avid cyclist himself who has competed in triathlons and races. “Children’s bikes on the market are quite heavy and usually made of steel. There was no alternative. »
With a strong USP background, Jerry began working with friend and now R&D manager at Frog Bikes, Dr. Tom Korff, to fund a PhD study at Brunel University London on child development and the biomechanics of cycling.
“Our initial thinking was that the bikes should just be light, but we changed all the geometry and components of the bikes to make them ideal for kids,” says Jerry.
Unlike other manufacturers who design bikes for kids based on their age, Frog Bikes designs their aluminum bikes for height. Everything from the adjustable brakes to the handlebars and cranks are specially designed and manufactured with children’s height in mind.
“Our cranks, which connect the pedals, measure as little as 89mm all the way up to 147mm. But when we were looking on the shelf, 152mm was the smallest we could find,” he says.
The company launched its initial range in February 2013, riding on the back of cycling after 2012 when Great Britain topped the cycling medal table at the Olympics and Bradley Wiggins won the Tour de France.
The couple originally planned to focus solely on trading in the UK, but immediate overseas interest saw the business start exporting in March of the same year.
The export strategy has always been to recruit field sales representatives in the target countries to identify local stores, organize sales and implement marketing in local languages. But the company now also works with distributors in certain markets.
In 2016, the Ascot-based company decided to relocate its bikes from China to the UK to better control lead times and quality.
With support from the Welsh Government, Frog Bikes has leased a 1.1m² factory at Mamhilad Park Estate in Pontypool to enable them to increase their production capacity and subsequently their exports.
The operation, which includes the production line, warehouse and on-site R&D test lab, currently occupies just over 10% of the 120,000 square foot factory.
Besides assembly, the company manufactures the bike wheels at the Pontypool factory and has three wheel building lines on site, but all other bike components are outsourced.
Around 80% of the components are sourced overseas, including from global bike manufacturers such as MicroShift and Tektro in Taiwan and China, with 20% of these components imported from the EU.
However, since the Pontypool factory opened, the company has started sourcing bike cables from Wrexham-based manufacturer Fibrax.
The company is currently in discussions with Welsh and Scottish government initiatives regarding other components that could be manufactured and sourced in the UK.
In terms of production capacity, the factory currently produces between 285 and 400 bikes per day, but it wants to exceed this in order to reach the right volumes to expand into new markets.
In order to achieve these volumes, Frog Bikes has tried to increase the number of employees from 54 to 70 since September last year, but recruiting workers has been a challenge, says Jerry.
“The challenge is the infrastructure to get to the factory, it’s not an easy place to find or get to,” says Jerry.
“I think if there was a bus service that would help but when we talk to the owner or local council about a bus service to the industrial park they say it hasn’t been picked up in the pass.”
The end of the Brexit transition period on December 31, 2020, which took the UK out of the EU single market and customs union, has also hampered Frog Bikes’ export growth ambitions.
Jerry says sales to the EU have halved from 40% to 20% since the end of the transition period and where there had been free trade there were now barriers and mountains of paperwork .
“The EU is an important market for us because it is on our doorstep. We are currently working on a solution that will allow bikes to be cleared in advance so our customers don’t have any barriers, but it will probably take another six to eight weeks before we can do that,” he says.
Supply chain bottlenecks caused by Brexit border controls, demand for shipping containers for PPE during the pandemic and shortages of HGV drivers have also slowed the supply chain of imports of bicycle components from Frog Bikes.
“It’s a lead time of at least 30 days, but we build that into our supply chain. We increased our stock, or basically our stock on the water,” says Jerry.
“We’re placing an order this week for something that would have been 45 production days and then 30 days on the water, but now we’re assuming it’s 45-60 production days and 60 days on the water, so we are 120 days away,” he adds.
“From a business perspective, it had a huge impact on cash flow, because you pay for the stocks long before they come in.”
On the positive side of the pandemic, when the UK entered its first lockdown, the company saw a surge in demand for its bikes as people turned to cycling when other sports were shut down.
Three months of stock in the warehouse sold out during the first lockdown as demand from bike shops surged.
“Everything we produced came straight from our house, it was a fantastic position, but then we went from feast to starvation because our supply chain couldn’t catch up,” says Jerry. “It took us 18 months to replenish that stock enough to start looking at increasing production again.”
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Now that inflation is hitting the market and the cost of living continues to tighten, the company expects sales to stabilize this year as consumers cannot afford new bikes.
But Jerry plans to expand Frog Bikes’ presence in the United States, the world’s largest children’s bike market, where more than three million children’s bikes are sold each year.
“It’s a big market that we have to tackle,” says Jerry. “We are already in the United States, but there is a big opportunity there for us to expand in the market.”
Last year, the company saw its sales increase by 250% in America after shipping bikes to a storage facility in the United States.
On the other side of the world, Jerry confirms that the company has suspended trade with a distributor in Russia as the war in Ukraine continues.
The company has worked with the Russian distributor for seven years to supply 25 stores in the country, but the dispute has raised ethical concerns for the company.
“We understand this is beyond the control of these stores, but we have to be reasonable,” says Jerry.
Besides export markets, the company is looking to offsetting its carbon footprint after signing COP26 to reduce its carbon emissions by 50% by 2030 and become a net zero company by 2050.
The company says it can easily achieve these goals if it switches to recycled aluminum for its bike frames, potentially reducing costs and dramatically reducing emissions by 20 kilos to 2 kilos per bike.
“The best thing is that the quality stays the same even though it takes less energy to make it,” says Jerry. “There is no shortage of them on the market, but the challenge is to find those who can manufacture aluminum tubes for us.”
The company is also working with bicycle subscription companies around the world, including the UK-based Bike Club, to offer a subscription service allowing parents to rent Frog bikes rather than buy.
“When the kid grows to the next size, you swap the bike. This allows regular use of the bikes,” he says.
So, did the couple think of an exit strategy among all these plans? Not anytime soon, says Jerry who divides his time between the factory in Pontypool and their office in Ascot while continuing to cycle in his spare time.
“From a release perspective, I don’t know what else I would do,” he says. “I like to be involved, and whether I’m going completely out is not on the agenda.”
He adds: “We knocked on the door but we are not interested. I think we can still do a lot more. »