Bernard Matthews Ltd.

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Bernard Matthews Ltd.

Great Witchingham Hall
Norwich, NR9 5QD
United Kingdom
Telephone: (+44 01603) 872611
Fax: (+44 01603) 871118
Web site:http://www.bernardmatthews.com

Private Company
Incorporated: 1958
Employees: 7,049
Sales: £400 million ($800 million) (2006 est.)
NAIC: 311612 Meat Processed from Carcasses; 112330 Turkey Production; 311611 Animal (Except Poultry) Slaughtering

FOUNDING OF A TURKEY EMPIRE IN 1950

BREEDING SUCCESS IN 1963

COMMERCIAL SUCCESS IN 1980

EXPANDING FOOD GROUP

BRAND CRISIS IN 2006

PRINCIPAL SUBSIDIARIES

PRINCIPAL COMPETITORS

FOUNDING OF A TURKEY EMPIRE IN 1950

Born in 1930, Bernard Matthews eventually became the subject of one of the United Kingdom’s most well known rags-to-riches stories in the post–World War II era. The son of a Brooke, Norfolk, car mechanic, Matthews experienced an early childhood marked by the struggles of the Great Depression. Yet Matthews quickly showed an aptitude for mathematics, which helped him achieve a scholarship to the City of Norwich school. In 1946, then just 16, Matthews left school and took up an apprenticeship as a livestock auctioneer. This provided him with a small but steady wage. In 1948, Matthews left the apprenticeship to complete his two years of military service.

By the end of the 1940s, Matthews had begun laying plans to launch his own business. In 1950, Matthews spotted an opportunity at a farmer’s market in Acle. There he purchased a crude incubator, powered by paraffin oil, and 20 turkey eggs, for a total investment of just £1.10. Matthews successfully raised 12 of the turkeys, then promptly sold them all for more than eight times his purchase price. As Matthews told the Independent: “I thought, this is all right.”

The success of this first venture led Matthews to develop his turkey operation while continuing his career in the insurance field. By 1953, however, Matthews decided to leave his job and become a full-time turkey farmer. Matthews’ timing proved fortuitous. If turkey remained a highly seasonal meat in the United Kingdom, with nearly all sales of turkey produced during the Christmas season, the 1950s saw the growth of the industrialization of the agricultural sector. This led to the development of factory-like methods for raising livestock. Matthews was inspired by the growing success of the poultry industry, which had begun the process of transforming chicken from a somewhat expensive, once-a-week meal to an inexpensive daily food choice.

In order to accomplish this, farmers abandoned the traditional free range model and instead built facilities that not only confined the hens but also permitted control over their environment. The densely populated structures meant the chickens had far less room to move. This lack of exercise promoted rapid weight gain, while farmers’ control of the light-dark cycle stimulated hens to remain active, and feeding, for far more hours per day. At the same time, the agricultural sector developed new, protein-rich feed, often supplemented with animal proteins, including protein derived from chickens, as well as antibiotics and growth stimulants. Meanwhile, intensive breeding efforts created new types of chicken. These were often characterized by extremely rapid growth rates, with high levels of weight gain, especially in the breast section, which remained the preferred part of the chicken by U.K. consumers. At the same time, the intensified growth cycle enabled farmers to reduce the overall size of the bird. The resulting chicken often struggled to remain on its feet, since its body weight far outpaced the development of the bones and muscles in its legs. At the same time, the lack of muscle tone produced a blander meat with little of the consistency of a chicken allowed to roam freely. Nonetheless, these new methods enabled farmers to increase production to an industrial level, creating an extremely inexpensive source of meat.

Matthews recognized the possibility of adopting these production methods to the turkey market, and in 1953 gave up his job in the insurance industry in order to build his turkey farm. In 1955, Bernard Matthews and his wife, Joyce Matthews, paid £3,000 to acquire a run-down mansion, Great Witchingham Hall, in Norwich, Norfolk. In addition to the mansion’s 35 rooms, the purchase also brought Matthews a 36-acre site on which to develop his turkey operation. At first, Matthews housed his turkeys in part of the mansion itself. This led to the later company legend, in which Matthews claimed that he and his wife lived in just one room of the mansion, while the turkeys claimed the rest. By 1958, Matthews had begun to develop new production facilities to house his fast-growing flock. In that year, the company formally incorporated as Bernard Matthews Ltd.

BREEDING SUCCESS IN 1963

In 1959, Matthews acquired a former airfield next to Great Witchingham Hall, and began construction of the company’s first fully dedicated turkey factory. Completed the following year, the factory allowed the company to move the last of the turkeys out of the mansion. This was then renovated to become the company’s headquarters. By then, too, Matthews’ flock had achieved impressive growth, permitting the company to claim a place in the Guinness Book of World Records as Europe’s largest single turkey farm.

COMPANY PERSPECTIVES

The Bernard Matthews story began back in 1950 with one man, 20 turkey eggs and a second hand incubator. Today the company is global, with an annual turnover of over £400 million and employing around 7,000 people worldwide.

Into the 1960s, however, turkey remained a highly seasonal meat choice for British consumers. While meat consumption in general had begun to increase steadily across the country, aided by the falling prices, the growth of self-service supermarkets and prepackaged meat cuts, and the overall rise in the British economy, turkey consumption remained largely confined to the holiday season. This was due in part to the larger size of turkeys compared to chickens; it simply was not practical for an average family to consume an entire turkey in the course of an ordinary meal.

The creation of a new breed of turkey helped change this imbalance in the turkey market. By selectively breeding for a recessive pygmy gene, breeders were able to develop the so-called mini-turkey. Launched in 1963, the mini-turkey represented a major breakthrough for Bernard Matthews and other turkey farmers. The smaller-sized birds provided an attractive alternative to the chicken-buying consumer. The smaller size also permitted farmers to increase the density of their turkey factories. The corresponding productivity boom led to a drop in turkey prices, further leveling the competitive playing field.

The rapid embrace of the mini-turkey, both by consumers and by industrial food processors, helped Matthews achieve impressive growth rates through the 1960s. By 1968, the company boasted a total flock of more than one million birds.

Bernard Matthews sought further expansion into the 1970s. In order to fuel its growth, the company went public, listing its shares on the London Stock Exchange in 1971. The successful offering provided Matthews with the backing to launch the company’s next phase of growth.

By then, the British retail food sector was undergoing the dramatic shift seen elsewhere in the Western world. The dramatic growth of the large-scale, self-service supermarkets had begun to drain off customers from the traditional butchers, local markets, and small grocers. Matthews correctly recognized that the expansion of the self-service sector represented a new opportunity for the poultry industry, as consumers increasingly chose to purchase poultry parts, as opposed to the whole bird. The added-value presented by the preparation of packaged poultry parts provided a new source of profits for both the supermarket groups and poultry farmers.

Bernard Matthews became the first to adapt its turkey production to this new market. The company launched construction of a new processing facility at the Great Witchingham site. Completed in 1974, the new facility allowed the company to launch a number of packaged turkey products, including Turkey Fillets and Turkey Breast Roast.

COMMERCIAL SUCCESS IN 1980

The supermarket sector in the meantime continued to exert a strong influence on the development of the food sector. The steady increases in store sizes had resulted in ever expanding shelf space. Supermarket groups turned to the food processing sector to develop new types of food to fill their shelves. At the same time, more and more women had begun to enter the workforce, resulting in a drop in the amount of time available for preparing and cooking meals. The supermarket and food industries were quick to exploit the new opportunity for sales of processed and prepared foods. Both sought to reinforce the perception that prepared and processed foods represented the sole solution for the increasingly harried family.

Matthews jumped on this bandwagon in the mid-1970s, buying Armour Le Grys in 1975. This purchase permitted the company to launch its first prepared turkey product, a basted turkey under the Golden Norfolk brand.

KEY DATES

1950: Bernard Matthews buys 20 turkey eggs and an incubator and enters the turkey farming business.

1958: Bernard Matthews Ltd. is formed.

1971: Bernard Matthews goes public on London Stock Exchange and launches production of packaged turkey parts and prepared foods.

1980: Company launches television campaign featuring Bernard Matthews and the famous “bootiful” catch phrase.

1992: Company expands onto European continent, acquiring Sárvár in Hungary, then Bernhard Barscht in Germany.

2001: Bernard Matthews reacquires full control of the company after takeover scare from SaraLee.

2007: Company announces launch of organic and free range turkey lines following an out breakof Asian bird flu and a series of scandals involving the company’s factory farming conditions.

Matthews set out to develop itself into a nationally known brand name. The company began rolling out new packaged and prepared turkey products, while at the same time investing in new advertising initiatives. This latter effort paid off in 1980, when the company launched a new television advertising campaign featuring Bernard Matthews himself. Matthews’ broad Norfolk accent—especially his pronunciation of the word beautiful as “bootiful”—became the centerpiece of the campaign. Indeed, the campaign was so successful that the Bernard Matthews brand became a national icon almost overnight.

The company quickly backed up its newfound notoriety with the launch of a series of new turkey products. These included its first breaded poultry product, Crispy Crumb Turkey Steaks, in 1982, and one of its strongest-selling and longest-lasting brands, Golden Drummers, launched in 1985. Bernard Matthews’ continued presence in the company’s ads provided ongoing support for the brand’s growth, and by the middle of the decade, the company had topped £100 million in revenues. By then, the company had also begun supplying the industrial, institutional, and restaurant sectors, creating a Food Service division in 1984.

EXPANDING FOOD GROUP

Matthews targeted the booming children’s food market in the early 1990s, launching the “shaped” poultry product Turkey Dinosaurs in 1992. The company also set its sights on the cooked meats sector, launching its first prepared meats and meals in that same year. From a standing start, the company succeeded in becoming the dominant player in the U.K. cooked meats sector, claiming a market share of more than 80 percent by the middle of the first decade of the 2000s. At the same time, the company began to develop European aspirations, adding operations in France in the early part of the decade. While the company’s French business remained short-lived, it was more successful with its entry into Germany, following the acquisition of Bernhard Bartsch in 1996. That company was especially strong in the production of sliced meats. The acquisition also helped strengthen Matthews’ efforts to expand beyond its core turkey category. This goal was furthered by the acquisition of lamb processor Advanced Foods, based in New Zealand, in 1994. Back at home, the company strengthened its hold on the turkey market, taking over Turner’s Turkeys that same year.

Matthews also entered Hungary in the early 1990s, buying that country’s leading poultry producer, Sárvár, in 1994. The choice of Hungary was made in large part because of the complementary nature of Hungarian consumer tastes with those of the United Kingdom. Whereas British consumers favored white meat, Hungarians preferred dark meat. This permitted the company to achieve greater value for the entire bird and its parts. In 1996, Matthews consolidated its position in Hungary when it purchased rival SáGa. The two companies were then merged to create SáGa Foods Kft.

By the year 2000, Matthews was one of the United Kingdom’s leading food groups. Yet the decade promised difficulties for the company. At the beginning of the new decade, the company found itself under a takeover threat by U.S. food giant Sara Lee Foods, which made an attempt to buy majority control of the British company. In response, Bernard Matthews, then 70 years old, moved to take back full control of the company he had founded, and the company once again became a privately held business.

The company also attempted to shore up its position in the U.K. food sector, which had become increasingly dominated by the market for fresh, chilled, and frozen ready-meals. The company began launching new ranges of products, including the infamous Turkey Twizzlers, a children’s food later condemned by a highly regarded British chef for its appalling lack of nutritional value. At the same time, the company expanded into other food categories, launching its own range of prepackaged sandwiches in 2000, which was backed by the construction of a dedicated factory in Dunstable in 2003. That site also served as the support for the company’s launch of a line of savory products in 2004.

BRAND CRISIS IN 2006

The mid-decade proved a difficult period for the Bernard Matthews brand. Following the Turkey Twizzlers controversy—the company was forced to discontinue the product in 2005—Bernard Matthews became embroiled in a new controversy, after two of its employees were caught on film playing “baseball” with some of its turkeys. By then, the company’s image had been tarnished when a television program had secretly filmed inside of another Matthews’ warehouse, detailing the worst excesses of factory farming methods.

If these were not enough to shake consumer confidence in the brand, the company faced a new setback in 2006 when one of its factories suffered an outbreak of the Asian bird flu virus. To make matters worse, the source of the outbreak was traced back to the company’s Hungarian operations, exposing for many Britons the fact that much of the company’s production was in fact sourced from outside of the United Kingdom. While the company had never made a secret of this fact, the widespread publicity surrounding the bird flu outbreak only deepened the company’s identity crisis.

After more than 50 years in business, Bernard Matthews was faced with the task of rebuilding its battered brand image. By April 2007, the company had launched a full-scale rebranding exercise, including making changes across many of its recipes. At the same time, the company announced its intention to enter the free range and organic foods markets, a move seen as somewhat of an about-face for a company that had played such an instrumental role in the creation of the factory farming sector. Yet as the dominant player in the U.K. poultry and cooked meats sectors, and considering the short-term memory of the consumer public, Bernard Matthews appeared likely to survive its brand crisis and remain a British food sector institution for years to come.

M. L. Cohen