Young's Bluecrest Seafood Holdings Ltd.

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Young's Bluecrest Seafood Holdings Ltd.

Ross House
Wickham Road
Grimsby,
United Kingdom
Telephone: +44 01472 242242
Fax: +44 01472 585158
Web site: http://www.youngsbluecrest.co.uk

Wholly Owned Subsidiary of CapVest
Founded: 1805
Employees: 3,272
Sales: £1 billion ($1.6 billion) (2006 est.)
NAIC: 311712 Fresh and Frozen Seafood Processing; 424460 Fish and Seafood Merchant Wholesalers

Young's Bluecrest Seafood Holdings Ltd. is the leading producer and distributor of frozen, fresh, and chilled seafood in the United Kingdom. The largest part of the group's sales come through its flagship Young's brand, which features a range of frozen and chilled fish, shrimp, and shellfish, for both the retail and foodservice channels. Other brand names in the Young's Bluecrest family include Ross, focused on the retail frozen segment; Bluecrest, which produces chilled and frozen fish for the retail and foodservice channels; King Frost, dedicated to the foodservice market; Marr, which produces frozen fish for the foodservice channel; Scotpak, producing chilled seafood products for the retail market; and Macrae, a Scotland-based producer of frozen and chilled fish for the retail market.

In addition, Young's Bluecrest operates a specialists foodservice subsidiary, Young's Bluecrest Foodservice, focused specifically on the restaurant and catering industry. Another company subsidiary, Polarfrost Seafoods, specializes in fish frozen at sea. Young's Bluecrest dates its origins back to the early 19th century; the company in its present state was formed through the merger of Young's and Bluecrest in 1999. The company has been owned by investment group CapVest since 2002. In January 2006, CapVest acquired the northern European operations of the Findus brand. The addition of the Findus operations to Young's Bluecrest is expected to boost the company's revenues past £1 billion. In June of that year, the company became a frontrunner for the acquisition of Unilever's frozen foods business, including flagship brands Bird's Eye and the remaining Findus operations. If completed, Young's Bluecrest's revenues will more than double, establishing the company among the world's leading seafoods specialists. Young's Bluecrest is led by Chairman M. Parker and Managing Director Wynne Griffiths.

EARLY 19TH-CENTURY ORIGINS

Young's Bluecrest was formed in 1999 through the merger of two of the United Kingdom's leading seafoods groups. The oldest member of the new company was Young's, which traced its origins to the beginning of the 19th century. The Young family had originally been a fishing family, based in Greenwich on the River Thames since the mid-1700s. Selling the fish was an occupation left to others, such as Elizabeth Martha, who began selling on the Greenwich quays in 1805 when she was 14 years old. In 1811, Martha married William Timothy Young, and the pair decided to combine the fishing and selling businesses for the first time, setting up a small shop in town. The business prospered, and later moved downriver to Leigh-on-Sea.

By the end of the 19th century, the family business, under William Joseph Young, had emerged as a prominent fish merchanting and wholesaling company, operating its own fleet of "bawleys," small fishing boats, especially for whitebait and shrimp fishing, used by fishermen in the River Thames region near Kent and Essex. Whitebait, which referred to a variety of small, often young fish, generally battered and eaten whole, was then one of the most popular seafoods in England. Its popularity extended to the country's gentry, and by the late 1880s, Young's had built up a strong business catering to the London market. In 1890, the company moved its headquarters to London, a move that permitted the company to begin supplying the city's catering market. A particular boost to the company came with the organization of the Whitebait Dinners, which were held to celebrate the conclusion of parliamentary sessions. The company's London business also developed strongly after 1895 when the railroad connecting Leigh-on-Sea to London enabled the company's morning catch to arrive in the city before lunchtime.

Through the 1920s, Young's expanded its operations, becoming one of the first in England to begin importing salmon. The fish variety quickly gained in popularity, topping one million pounds by the end of the decade, and ten million pounds by the end of the 1930s. In the meantime, Young's had begun investing in its distribution wing, acquiring its first motorized delivery vehicles in 1923. In 1928, the company opened a new sales office in London, on Royal Mint Street. That era also marked the debut of the company's most successful product, potted shrimp.

The next generation of the Young family—brothers Gordon, Stanley, Douglas, and Malcolm—joined the family business in the 1920s and took over as heads of the operation in the late 1930s. In 1938, the company expanded its range of operations again, setting up a new subsidiary, W. Young & Son (Wholesale Fish Merchants) Ltd., for its increasingly important wholesaling business. The company added another subsidiary following World War II, W. Young & Son (Grimsby) Ltd., which added dockside purchasing and processing operations in northern England. Grimsby later emerged as the United Kingdom's (and for a time, the world's) busiest fishing port. Also following the war, the company set up an operation dedicated to its potted shrimp business. Interrupted during the war, production of potted shrimp had picked up strongly as rationing was lifted. By the 1950s, the company operated five production facilities for its potted shrimp production.

POSTWAR SHIFT TO FREEZING

The arrival of freezing technologies in the United Kingdom, and the spread of home freezers in the country in the 1950s, provided a new boost for Young's. The company redeveloped the packaging for its potted shrimp, and began developing new frozen products, launching its first frozen foods production in 1946. A highly successful new product launch followed in 1949, with the introduction of packaged frozen shrimp scampi. The company added frozen peeled prawns and, later, King's Prawns and Queen's Prawns. In the meantime, the company's early investment in freezing technology enabled it to claim a leading position in the country's frozen fish sector.

COMPANY PERSPECTIVES

Young's is the U.K.'s leading specialist fish brand. With 200 years' experience, the brand's reputation for fish expertise provides reassurance to seafood consumers.

We aim to make using fish easy for consumers and offer superb product quality, whether frozen or chilled. With access to fish species from around the world, Young's provides a wide range of products, from traditional favourites such as Prawns and Scampi to Chip Shop Battered Fish, Ocean Pie and Seafood Meals.

Douglas Young took up the company's chairmanship in 1959. That year, however, marked the end of Young's independence, after the company was purchased by the larger Ross Group. Ross had been active in England's fishing industry since 1920, when it was established as a small family-owned fish merchanting company in Grimsby. By the outbreak of World War II, the company operated branches in Leeds, Leicester, and Fleetwood as well. Ross also had diversified into trawling, starting with a small fleet of four vessels in the 1930s; by the mid-1960s, the company's fleet grew to 65 trawlers. During the 1950s, Ross had made its first inroads into the fish processing industry, and later into food processing in general. The company also acquired its own shipyard, which began building the company's trawlers. By the early 1960s, Ross's holdings included poultry, frozen and fresh foods, including fish, as well as its fish trawling, merchanting, and other operations. Yet the company's trawling operations, which by then represented just 5 percent of group sales, had become perennial money-losers. As part of Ross, Young's maintained its own operations, and especially its nationally known brand name. Douglas Young, and later other members of the Young family, remained in charge of the company's direction as well.

Ross's and Young's frozen foods operations grew strongly through the 1960s. A period of railroad cutbacks forced the companies to develop a new distribution system, and through the 1960s both Ross and Young's set up a network of distribution depots, as well as completing the acquisition of a number of wholesalers throughout the country. By the mid-1960s, the group's share of the United Kingdom's frozen food sector topped 5 percent in the retail channel, and as much as 13 percent in the catering market. By the end of that decade, Young's itself was recognized as the leader in the U.K. frozen fish sector.

The continued losses of Ross Group's trawling operations, however, continued to plague the company through the decade. In 1969, Ross Group agreed to be acquired by Imperial Tobacco, which had launched its own diversification into the foods sector. As part of that acquisition, Ross's trawling business was spun off into British United Trawlers, and Ross was renamed Imperial Foods. Both the Ross and Young's names survived as independently operating divisions of the new U.K. foods heavyweight. Imperial Tobacco itself became a division of the newly renamed Imperial Group.

As part of Imperial, Young's expanded onto a national level. With Imperial Group's deep pockets, Young's was able to invest in expanding its production capacity. The company also developed a new centralized distribution system, which enabled it to expand to a truly national scale. By the middle of the 1970s, Young's sales had more than doubled since the company had become part of Imperial Group, topping £23 million in sales in 1974. The company by then operated 18 factories for its frozen fish and frozen shellfish products.

EUROPEAN LEADERSHIP FOR THE NEW CENTURY

By the mid-1980s, however, Imperial's diversification efforts appeared to have run out of steam. The company was criticized for having created a "patchwork" of companies. By the middle of the decade, Imperial was swept up in the era of hostile takeovers, becoming the object of interest for a number of companies, including United Biscuits PLC.

United Biscuits failed to win its bid for Imperial Group, which was instead acquired in a hostile takeover by fast-growing U.K. conglomerate Hanson PLC. Hanson's interests, however, were strictly for Imperial's tobacco holdings. As such, Hanson began selling off Imperial's other holdings. Ross Young's turn came in 1988, when the division was broken up and Ross Foods, including Young's, was sold to United Biscuits. As part of United Biscuits, the frozen seafoods operation was placed under the direction of Wynne Griffiths, who had led the integration of this division following the Hanson takeover. Into the early 1990s, Griffiths redeveloped Young's as a standalone division.

KEY DATES

1750:: The Young family begins whitebait fishing in the River Thames area.
1805:: Elizabeth Martha begins selling fish quayside in Greenwich.
1811:: Martha marries William Young and they set up their first fish shop.
1890:: The Youngs move the business to London.
1938:: A wholesale subsidiary, W. Young & Son (Wholesale Fish Merchants) Ltd., is established.
1959:: Ross Group acquires Young's.
1969:: Imperial Tobacco acquires Ross Group, regrouped as Ross Young, and launches expansion of Young's operations.
1975:: Frank Flear founds Bluecrest in Grimsby.
1985:: Bluecrest is acquired by Fitch Lovell.
1986:: Hanson PLC acquires Imperial Tobacco.
1988:: Hanson sells Ross Young to United Biscuit and Rossfish to Booker PLC.
1990:: Fitch Lovell sells Bluecrest to Booker.
1999:: LGV acquires Young's and Bluecrest, which are merged as Young's Bluecrest.
2002:: Capvest backs the management-led buyout of Young's Bluecrest.
2003:: Young's Bluecrest acquires Albert Fisher chilled seafood and Marr Group.
2004:: Young's Bluecrest acquires Macrae Food Group.
2006:: Young's Bluecrest acquires the Findus U.K. operations; the company enters negotiations to acquire Bird's Eye and Findus Europe from Unilever.

This set the stage for the next phase in Young's ownership. In the mid-1990s, United Biscuits launched its own restructuring effort, streamlining its product mix. Young's turn came in 1999, when the company was sold to a management buyout, led by Griffiths and backed by Legal & General Ventures (LGV), which had also acquired another leading U.K. seafood group, Bluecrest.

Bluecrest was founded in 1975 by Frank Flear and quickly became an important player in the Grimsby fish market. The company was subsequently acquired by Fitch Lovell in 1985, and under its new ownership tacked on a number of further acquisitions through the 1980s. In 1990, Fitch Lovell sold Bluecrest to Booker PLC, which also had acquired the Rossfish division from Hanson Group. The two companies were merged together as Bluecrest, forming Booker's Fish Division.

The newly created Young's Bluecrest was the clear leader in the U.K. frozen fish sector, having surpassed longtime rivals Bird's Eye, owned by Unilever, and Findus, owned by EQT Scandinavia in the United Kingdom. (Unilever owned the Findus brand elsewhere in Europe.) Griffiths remained as head of the enlarged Young's Bluecrest, which also reunited the company with the Ross brand.

In 2000, Young's Bluecrest set out a major relaunch of the Young's branded products family, which played the role of company flagship and top revenue generator. The company, which by then boasted a turnover of more than £320 million, also launched an investment drive to boost its production capacity. Young's also began preparing an ambitious expansion strategy, designed to drive the consolidation of the still fragmented British fish sector.

LGV, however, declined to back this expansion, and instead, in 2002, the investment firm sold Young's Bluecrest in a new management buyout, again led by Griffiths, but this time backed by CapVest. Young's soon made good on its expansion objectives, making its first acquisition, of the chilled seafood division of Albert Fisher, based in Newcastle, in June 2003. This purchase was followed by the acquisition of the Pinegain Group, and its Marr Foods division in October 2003. That company operated three factories in the United Kingdom and added its range of salmon, smoked fish, and tuna, as well as the Marr brand name, to the Young's lineup. Young next turned to Scotland, where it bought a 34 percent stake in Macrae Food Group, the largest dedicated producer of ready-to-eat seafood in Scotland. That purchase was completed in September 2004.

Young's also invested in boosting its own capacity, spending some £15 million to expand its Humber-based operation in 2004. In 2005, the company launched the refurbishing and expansion of its Grimsby-based Humberstone facility, which had formerly housed the Findus operation in that city. In 2006, the company also launched a £10 million expansion of its Macrae plant in Edinburgh.

By then, Young's had completed the next phase of its expansion, when it acquired the U.K.-based Findus seafoods operations from EQT Scandinavia, a purchase completed in January 2006. The addition of Findus boosted Young's total sales to an estimated £1 billion ($1.7 billion). Young's then set its sights on still further growth. By June 2006, the company had been acknowledged as the front runner for the acquisition of the frozen seafoods operations of consumer products giant Unilever, a purchase that included not only the Bird's Eye brand family, but the European Findus operations. If completed, Young's Bluecrest was expected to double its annual sales, and become one of the top seafood specialists in Europe.

PRINCIPAL SUBSIDIARIES

Macrae Food Group; Polarfrost Seafoods Ltd.; Young's Bluecrest Foodservice.

PRINCIPAL COMPETITORS

Alpesca S.A.; Orkla ASA; Aker ASA; Maruha Corporation; Unilever Deutschland GmbH; Icelandic Group hf; Perkins Foods Holdings Ltd.; Green Isle Food Group Ltd.