Buying a Yowie for his children back in the mid-1990s, the thought never crossed Wayne Loxton’s mind that he would one day run the company selling the chocolate form of the mythical creatures.
The mining engineer, who has been wheeling and dealing in the sector for three decades, knew nothing about making chocolate.
Fast-forward to 2013 and the Kalgoorlie lad had convinced investors to plunge $21 million — including $6 million from Mr Loxton’s personal group of followers — to manufacture the chocolate capsules with enclosed toys which became popular under Cadbury 20 years ago.
Mr Loxton, who is now Yowie Group executive chairman, has ambitious plans to sell 500 million Yowie chocolates — mostly in the untapped US market — over the next five years.
“I get a few raised eyebrows,” Mr Loxton told WestBusiness about the reaction he gets when he explains his new business.
“Basically, they ask me how this came about? You’ve got a mining background and now you’re selling chocolates to kids.”
Yet, despite the nature of the business, it is no child’s play.
The company’s share price jumped from 23¢ in February to as high as 90¢ in the same month, triggering a $9 million capital raising at 70¢ a share. On Thursday, Yowie was valued at $65 million and trading at 70¢.
It is understood the company will announce its first order from a “major retailer” in Australia as soon as next week and a trial with a major US retailer is “imminent”.
With an exclusive patent in the US until 2018 (something Kinder Surprise has unsuccessfully applied for twice) and plans to produce 40 million units a year from its plant in Florida, Mr Loxton said he was confident he was onto a winner.
“Show me a child that wouldn’t want to buy this?” Mr Loxton said. “And we’re going into what’s called ‘white space’ as Kinder Surprise is not allowed to sell in the US.”
But it has not always been such smooth sailing, as the curious journey of the Yowie product has proved.
Yowie recorded annual sales of up to $50 million in its prime. But Cadbury’s commitment to the product was stymied by a legal stoush with Canberra naturalist “Tim the Yowie Man”, who won the right to keep using his name after a legal battle. Cadbury discontinued Yowie in 2005.
After buying the rights to the brand in 2012, Yowie Group recapitalised via a shell, raised $2.7 million and relisted.
But just three months later, the managing director and major shareholder were dumped from the prospective chocolate maker’s board in a spill triggered by Mr Loxton and Perth broker Tim Neesham.
Mr Loxton said he was approached by former Cadbury employee-turned Yowie board member Patricia Fields, who suggested the $6 million he had put in would be lost if he did not act.
At between $US2.49 and $US2.95 per chocolate, Mr Loxton said at the $US2.49 price the company would bank 30¢.
Today, Yowie Group is at a crucial stage. It is about to find out if people want to buy its chocolate.
“Our objective is to sell 500 million in five years ... which I think it is very achievable.”