Warburtons Ltd

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Warburtons Ltd

Back O’ Th’ Bank House
Hereford Street
Bolton, Lancashire, BL1 8HJ
United Kingdom
Telephone: (+ 44 01204) 531004
Fax: (+ 44 01204) 523361
Web site: http://www.warburtons.co.uk

Private Company
Incorporated: 1921
Employees: 4,230
Sales: £405.3 million ($800 million) (2006 est.)
NAIC: 311812 Commercial Bakeries; 311612 Meat Processed from Carcasses; 311821 Cookie and Cracker Manufacturing

FROM GROCER TO BAKER IN THE 19TH CENTURY

INVESTING FOR SUCCESS IN 1937

EXTENDING ITS REACH

BAKING TOWARD NATIONAL SCALE BY 2010

PRINCIPAL SUBSIDIARIES

PRINCIPAL COMPETITORS

FROM GROCER TO BAKER IN THE 19TH CENTURY

Warburtons originated as a small grocers shop in the town of Bolton, England, opened by Thomas Warburton with the financial backing of his brother George in the 1870s. Yet much of the credit for the family’s future direction, and success, goes to Thomas’s wife Ellen Warburton. When sales at the grocery hit a dip in the mid-1870s, Ellen Warburton turned to baking bread at the back of the store, and within an hour of marketing had sold every loaf. The Blackstone Road shop quickly became known for Ellen Warburton’s breads and cakes, and within two weeks the family decided to convert the grocery into a full-fledged bakery. In that year, 1876, the shop raised a new sign, “Warburtons’ The Bakers.”

The bakery provided the Warburtons with a comfortable living. The growing business also provided employment for George Warburton’s son Henry, who in 1890 joined his aunt and uncle as an apprentice at the age of 16. From the start, Henry Warburton became highly involved in the business, and by the age of 25 after becoming a Master Baker, took over the bakery. The younger Warburton played a major role in transforming the bakery from a small artisan’s shop into an industrial bakery. By 1897, the business had outgrown its original premises, and in that year opened a dedicated bakery, the Diamond Jubilee Bakery, nearby. This facility supplied the original shop, which continued to do a brisk business.

Warburtons was developing from a local to a regional favorite. As its market increased, the company continued to expand its production, and by the outbreak of World War I had moved three more times. Until then, the company had been housed in existing buildings, which were outfitted to accommodate its growing range of baking equipment and machinery. In 1915, however, Warburtons moved into its first purpose-built bakery facility, which was called the Model Bakery, and later became known as the Back o’th’Bank House.

INVESTING FOR SUCCESS IN 1937

Henry Warburton remained at the head of the company, which was formally incorporated in 1921, until his death in 1936. Throughout this period, Warburtons continued to invest in its production equipment. In 1921, for example, the company added a specialized packaging machine, enabling it to supply its packaged breads to the Bolton area and then to the Lancashire region’s grocery trade. This allowed the company to grow still more strongly, and by 1937 the company’s factory had once again become too small. By then the company had also been hard hit by the difficult financial environment of the time. The company, led by Henry’s three sons, decided to invest in new generation machinery. The new equipment included a Simplex Continuous Oven, vastly increasing productivity. At the same time, Warburtons added a traveling oven, further increasing capacity. In this way, Warburtons evolved into one of the Lancashire region’s most technologically advanced bakery groups by the outbreak of World War II.

The third generation of the Warburton family, led by Derrick Warburton, took over the company’s operations during World War II. With the end of the war and the end of rationing, Warburtons resumed its commitment to investment and expansion. In the early 1950s, the company made the important decision to expand its operations, by acquiring a number of small bakeries in the northern region of England. Over the next decade, the company expanded its industrial plant, and by the mid-1960s operated five full-scale baked goods factories. The rise of the supermarket sector in the United Kingdom during this time provided a ready market for Warburtons’ packaged breads. Under Derrick Warburton the company carefully developed the Warburton brand, establishing a reputation for the company’s commitment to quality. In order to achieve this, the company also began working closely not only with its flour suppliers, but also with wheat farmers themselves. Canada especially emerged as a major source for the company’s wheat.

Warburtons early quality commitment placed it in a strong position to conquer space on the supermarket shelves, and in customers’ pantries. The company continued to expand the reach of its operations, and in order to maintain proximity with its new markets, began building new bakeries. At the end of the 1960s, for example, Warburtons had added a sixth bakery, in Burnley. The company continued to expand into the 1970s, aided by the rapidly growing supermarket sector. The transformation of the retail market, however, meant that Warburtons could no longer rely on the small grocer to guide consumers’ bread purchases. Warburtons therefore began to develop a formal marketing program for the first time during the 1970s. As part of this effort, the company also developed and launched a range of new products. This effort had begun in the 1960s, and included the successful Milk Roll, launched in 1965. This bread remained one of the company’s bestsellers into the next century.

COMPANY PERSPECTIVES

Our vision is to become Britain’s favourite baker; this is underpinned by our dedication to continued improvement across all areas of the business. We are committed to developing the bakery market and working with our customers, that is why we invest a lot of time and money to understand our consumer’s needs. Our goal is to ensure that important values such as quality, freshness, and service are delivered to our consumers in the 21st Century. For us this isn’t just a business. It’s a way of life.

EXTENDING ITS REACH

Warburtons began a drive to solidify its position in its northern regional base in the 1980s. The company added a presence in the Yorkshire region in 1984, supported by the addition of a new bakery in Wakefield that year. By the end of the decade, the company had also opened a bakery in Newcastle, allowing it to add the North East region to its operations. Then in 1990, Warburtons expanded its operations again through the acquisition of Sayers, a Liverpool-based bakery group that operated more than 120 shops in the United Kingdom. By the 1990s, Warburtons had succeeded in becoming one of northern England’s leading bread companies.

The steady growth of the Warburtons bakery business had enabled the family to pursue numerous investments over the previous decades. By the early 1990s, Warburtons had become, in fact, a somewhat diversified company operating in a variety of areas beyond its core baked breads business. Among these was the production of malt cakes, which came through the purchase of the Soreen brand in 1959. Warburtons subsequently built Soreen into the United Kingdom’s third largest producer of malt cakes and similar snacks. The company also developed a business producing pot pies and other savory products under the Peter Hunt name; that business was expanded in 1990 when Warburtons acquired Sayers and transferred its savory products operations to Peter Hunt. Further afield, Warburtons entered the United States in the early 1980s, setting up a subsidiary that developed a chain of more than 100 bakery cafés under the Warburtons Bakery Café brand.

The arrival of a new generation of Warburtons in 1991 ultimately led to a shift in direction for the company. Under the leadership of Co-Managing Directors Ross and Brett Warburton, and aided by another cousin, Jonathan Warburton, the company launched a restructuring in order to refocus its operations around its core baked breads business. Part of this strategy was an exit from its U.S. operations, completed with the sale of the Warburtons Bakery Café chain to Au Bon Pain Inc. in 1992. Over the next decade, Warburtons continued to streamline its operations, completing the process with the sale of the Soreen brand in 2003 to Inter Link Foods for £9.1 million.

BAKING TOWARD NATIONAL SCALE BY 2010

Part of the motivation behind Warburtons’s streamlining effort came from its new goal of redeveloping itself as a truly national brand. In support of this strategy, the company launched an ambitious bakery building program starting in the mid-1990s. In 1995, for example, the company added the East Midlands region to its range of operations, with construction of a bakery in Eastwood, Nottingham. That factory also represented the first “greenfield” construction made by the company since the construction of the Model Bakery back in 1912.

Warburtons next targeted Scotland, entering that market in 1998 with the launch of a bakery in Bellshill. This bakery was soon followed by commissioning of a bakery in Wednesbury, which extended the Warburtons brand into the West Midlands region.

Warburtons quickly gained a strong share in each new market. In Scotland, for example, Warburtons’ rapid growth led to the expansion of its Bellshill facility in 2004. Encouraged, the company set its ambitions still higher. The company targeted the all-important London market in 2003, adding a site in Enfield. This was followed by the construction of a new “super bakery” for the Yorkshire region, which was opened in Tuscany Park in 2005. For its entry into Wales, Warburtons purchased a bakery in Newport that year. In the meantime, growing demand for Warburtons’ breads led it to buy a new facility in Stockton, in order to supply the North England region.

KEY DATES

1876:: Ellen Warburton begins baking bread at a grocery store operated by husband Thomas Warburton in Bolton, England.
1897:: Warburtons adds new bakery factory, theDiamond Jubilee Bakery, in Bolton.
1921:: Warburtons formally incorporates.
1959:: Company acquires Soreen malt cakes brand.
1965:: Company launches best-selling Milk Roll product.
1984:: Warburtons enters Yorkshire region with bakery in Wakefield.
1992:: Company sells U.S. subsidiary to Au BonPain as part of streamlining of operations.
2003:: Warburtons completes streamlining with sale of Soreen to Inter Link Foods.
2007:: Warburtons launches new advertising campaign to underscore transformation into nationally operating company.

By 2006, Warburtons claimed to reach some 80 percent of the United Kingdom’s population, with only the region south of the Thames posing a gap on the company map. In that year, however, Warburtons announced its intention to double the capacity of its Enfield factory by the beginning of 2007. The extension of the Enfield site, which included the addition of a production line making crumpets, cost the company more than £45 million to complete. At the same time, Warburtons expanded its Newport factory, a move that allowed the company to deepen its penetration into the southwest region.

By mid-2007, Warburtons laid claim to being the United Kingdom’s leading independent national baked goods brand, with a coverage of more than 95 percent of the population and sales of more than £405 million ($800 million). In that year, also, the company launched its first nationwide advertising campaign, with the tagline “Bakers Born & Bred.” After more than 130 years, the Warburtons name was one of the United Kingdom’s most prominent and well-loved food brands.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Warburton operates 11 bakeries and baked goods depots throughout the United Kingdom.

PRINCIPAL COMPETITORS

United Biscuits Holdings PLC; Associated British Foods PLC; Wittington Investments Ltd.; Brake Brothers Ltd.; RHM PLC; Northern Foods PLC; Geest Ltd.; Greggs PLC; British Bakeries Ltd.; Allied Bakeries Ltd.; The Jacob’s Bakery Ltd.; Inter Link Foods PLC; William Jackson and Son Ltd.