When Prince Louis was snapped riding a balance bike to mark his third birthday in April last year, news outlets around the world wanted to know who the manufacturer favoured by the royals was.
The company in question was Pontypool children’s bike manufacturer, Frog Bikes.
Not that it needed a royal endorsement.
Frog Bikes is the market leading manufacturer of lightweight, affordable kids’ bikes, selling around 5,000 bikes a month and stocked in 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 USA, Canada, Australia, New Zealand, China, Hong Kong and a number of European nations.
By the end of the 2020-2021 financial year, Frog Bikes had reached a turnover of £12.8m and made a pre-tax profit of £249,000.
The company is led by husband and wife and sole owners of the company, Jerry & Shelley Lawson, who left their corporate careers to design a range of children’s bikes after struggling to find suitable ones for their own children.
“We struggled to find bikes that were as light as we thought they should be,” says Jerry, a keen cyclist himself who has completed triathlons and races. “Kids’ bikes on the market are quite heavy and generally made of steel. There wasn’t an alternative.”
With a strong USP forming, Jerry began working with friend and now head of R&D at Frog Bikes, Dr Tom Korff, to fund a PhD study at Brunel University London on child development and the biomechanics of cycling.
“Our original thought was that the bikes just needed to be lightweight, but we have changed the entire geometry and components of the bikes to make them ideal for kids,” says Jerry.
Unlike other manufacturers which design kids’ bikes around age, Frog Bikes’ designs its aluminium bikes for height. Everything from the adjustable brakes to the handlebars and cranks are specifically designed and manufactured around children’s heights.
“Our cranks, which connect the pedals, are as small as 89mm all the way up to 147mm. But when we were looking off the shelf, 152mm was the smallest you could find,” he says.
The business launched its initial range in February 2013, riding on the back of the cycling high post 2012 when Great Britain had topped the cycling medal table in the Olympic Games and Bradley Wiggins had won the Tour de France.
The couple originally planned to focus solely on trade within the UK, but immediate overseas interest saw the company start exporting in March of that year.
The export strategy has always been to recruit sales representatives on the ground in target countries to identify local stores, organise sales and implement marketing in local languages. But the company now also works with distributors in some markets.
By 2016, the Ascot-headquartered company decided to reshore its bikes from China to the UK to get better control over lead times and quality.
With support from the Welsh Government, Frog Bikes leased a 1.1m sq ft factory at Mamhilad Park Estate in Pontypool to enable it to increase production capacity and subsequently its exports.
The operation, which includes the production line, warehouse and on-site R&D test lab, currently occupies just over 10% of the factory at 120,000 sq ft.
Aside from 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 components are sourced from overseas including from global bike manufacturers like MicroShift and Tektro in Taiwan and China, with 20% of those components imported from the EU.
However, since opening the Pontypool factory the company has begun sourcing its bike cables from Wrexham-based manufacturer, Fibrax.
The company is now in further talks with Welsh and Scottish government initiatives about other components that could be made and sourced within the UK.
In terms of production capacity, the factory is currently producing between 285 and 400 bikes a day, but it wants to exceed that in order to achieve the right volumes to expand into new markets.
In order to achieve these volumes, Frog Bikes has been trying to increase the number of staff 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 travel to,” says Jerry.
“I think if there was a bus service that might help, but when we talk to the landlord or local council about a bus service to the industrial park they say it’s not been taken up in the past.”
The end of the Brexit transition period on 31 December 2020 that took the UK out of the EU Single Market and Customs Union has also hindered Frog Bikes’ export growth ambitions.
Jerry says that sales to the EU halved from 40% to 20% since the end of the transition period and where there had been free trade were now barriers and mountains of paperwork.
“The EU is an important market for us because it’s on our doorstep. We’re now working on a solution that will get the bikes cleared of customs in advance so our customers won’t have any barriers but that 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 a shortage of HGV drivers has also slowed down Frog Bikes’ supply chain of bike component imports.
“It’s at least a 30 day delay, but we’re building that into our supply chain. We’ve increased our stock holding, or in loose terms, our stock on the water,” says Jerry.
“We are placing an order this week for something that would have been 45 days of production and then 30 days on the water, but now we’re assuming it’s 45 to 60 days of production and 60 days on the water, so we’re 120 days out,” he adds.
“From a business standpoint, it’s had a massive cash flow impact because you’re paying for stock long before it arrives.”
On a positive side to the pandemic, when the UK went into its first lockdown the company saw a wave of demand for their bikes as people turned to cycling when other sports were stopped.
Three months worth of stock in the warehouse was sold in the first lockdown as demand from bike shops increased.
“Everything we produced was going straight out the door, it was a fantastic position, but then we went from feast to famine because our supply chain couldn’t catch up,” says Jerry. “It took us 18 months to build that stock back up enough to start looking at increasing production again.”
Now as inflation hits the market and there is the continued cost of living squeeze, the company expects to see sales plateau this year as consumers are unable to afford new bikes.
But Jerry is eyeing expanding Frog Bikes’ presence in the USA, the world’s largest children’s bike market, where more than three million kids’ bikes are sold a year.
“That’s a big market for us to tackle,” says Jerry. “We’re already in the US but there’s a big opportunity there for us to grow in the market.”
Last year, the company saw sales grow by 250% in America after shipping bikes to a storage facility in the states.
On the other side of the world, Jerry confirms that the company has suspended trade with a distributor in Russia while 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 conflict has brought in ethical concerns for the business.
“We understand it’s out of these stores' control but we’ve got to be sensible,” says Jerry.
Aside from export markets, the business is turning its attention to offsetting its carbon footprint after signing up to 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 targets if it switches to recycled aluminium for its bike frames, potentially reducing costs and dramatically reducing emissions from 20 kilos to 2 kilos per bike.
“The best thing is the quality stays the same even though it needs less energy to make it,” says Jerry. “There’s no shortage of it in the marketplace but the challenge is finding those who can manufacture aluminium tubes for us.”
The company is also working with bike subscription companies around the world including UK-based Bike Club, to offer a subscription service for parents to rent out Frog Bikes rather than buy.
“When the child grows to the next size, you swap the bike out. It keeps the bikes being regularly used,” he says.
So have the couple thought about an exit strategy amongst all these plans? Not anytime soon, says Jerry who splits his time across the Pontypool factory and their office in Ascot while continuing to cycle in his spare time.
“From an exit point of view, I don’t know what else I’d do,” he says. “I love being involved, and whether I’ll completely exit is not on the agenda.”
He adds: “We’ve had a knock on the door but we’re not interested. I think there is still a lot more we can do.”
