It's in the bag for Seabrook

By Rod Addy

- Last updated on GMT

Related tags: Seabrook crisps, Lay's, Potato

The pages of magazines are littered with over-eager brands all boasting amazingly optimistic growth plans, which stretch the bounds of credibility. Seabrook Crisps might easily be mistaken for one of them if it weren't for the fact that, in Seabrook's case, it all appears to be coming true.

In 2007/2008 sales were at the £12m mark and falling. But the company has undertaken a 180 degree u-turn, reaching sales of more than £28m by the beginning of this year and aiming to more than double that within four years. The proud boast on its website is that it's 'officially the fastest growing crisp brand in the UK', chalking up growth of 46%.

To date, according to md John Tague, it's ahead of schedule on its business strategy, which is set to double production capacity. "We have the potential to produce £70m worth of crisps a year. We have gone national with Tesco and have extended our ranges with Sainsbury, Asda and Morrisons.

"Although we still don't sell as much in the south as we do in the north, we are already a truly national brand. We do about 17%30% of our business in the south. About two years ago that was 5% and in some areas we would have struggled to have any presence. The challenge is building awareness."

There's still all to play for, with national brand awareness of about 45%, versus 85% in Yorkshire and the north and outstanding profit margin potential reckoned to be 30% at point of sale. Still, progress so far is not bad for a manufacturer that grew out of a fish and chip restaurant founded in Bradford on the eve of World War Two.

So how exactly does a company with such a rich tradition in the heart of northern England nail the kind of growth it has seen of late?

Openness to change

The answer seems at least in part to lie in openness to change and a close working relationship with its equipment supplier, Australia-based TNA.

A lot of UK manufacturers drag their heels when it comes to investing in the latest equipment, either because they can't secure the funds or because they are set in their ways.

Not so for Seabrook. The company has just completed a courageous, rolling multi-million pound refurbishment and innovation programme spanning six years that would get even the most experienced operations manager over-excited.

It is not afraid to put its money where its mouth is and the kind of sums it is dealing with show exactly how serious it is about its vision for the future.

"They have just invested £1m with us updating and refurbishing primary bagging and flavouring and distribution,"​ says TNA regional manager Mark Brittain, trying not to sound like all his Christmases have come at once. Overall that brings total investment to almost £10m over six years.

Tague confirms at least some of these funds have been made possible as a result of a strong relationship with the firm's banking partner.

The company has added three primary baggers to boost throughput, taking total baggers to 19, and is beefing up case packing.

The Bradford plant operates on two floors and two more automated pieces of kit have been installed on the upper floor to flow wrap six packs of crisps in 3x3 brick packs for retail. "We're creating more capacity to get more production,"​ says Brittain.

It has just installed a TNA multibagging system that delivers exactly the sort of flexibility that it needs to respond rapidly to the promotional demands of major supermarkets. "The multibagging equipment enables us to make anything from eight to 24 bag packs,"​ says Tague. Brittain adds: "The current system delivers 2.6kg an hour, whereas the new one will do 3.3kg."

Factory expansion

The idea behind this change is to not only increase capacity, but also to allow plenty of wiggle room for further growth at Bradford. That's before even thinking about a second, southern production facility, which has been discussed as a potential possibility within the company, even if it will still take some time to be realised.

This is all just for starters. Earlier last year the company introduced cutting edge electrostatics pioneered by Spice Application Systems. This augments standard tumbling drum methods of applying flavourings and allows for more precise flavours application, cutting raw material use by 10%.

These moves build on relentless upgrades, including Robag bagging lines, integrated with coders and metal detectors, high speed weigh scales and an Ishida multihead weigher that enables far more precise weighing. A new potato reception room has also now been completed.

But all the snazzy equipment in the world wouldn't solely provide the foundation for Seabrook's success. It has implemented a planned preventative maintenance system that is already paying dividends in terms of slashing downtime and subsequently boosting production and efficiency.

The business also relies on a canny distribution strategy. "We have a 13,935m2 warehouse at our Bradford site, but we have outgrown it because the pace of growth has been so significant,"​ says Tague.

"We have another depot at Yeadon [Yorkshire], which is run in conjunction with Bibby Distribution, so we have a very good transport network with easy access to the M6 and M62."

As Seabrook expands in the south, there may be a need to use further transport hubs, but Tague says he is confident its relations with Bibby would be able to deliver what's needed. "We can get a distribution hub anywhere."

Support from the major retailers is also playing an important role in Seabrook's development. "We have engaged the retailers and they have been able to understand if the brand is really strong in the north, why not in the south?"

And the fact that Walkers Crisps, the brand leader in the crisps category, recently launched into the crinkle cut market traditionally Seabrook's territory with its Crinkles product, doesn't daunt Tague. In fact, he sees it as a positive advantage. "It's been a good launch for them. We haven't seen an affect on market share so far.

"They have a 30% share of crinkle cut in the US and if they achieve the same here that can only help us. Their activity has allowed us to advertise our product and if they are growing the sub-category we will benefit."

Seabrook, of course, has never had a problem with Walkers in Yorkshire, where it has traditionally outsold the PepsiCo brand.

That said, Seabrook is not resting on its laurels and has a robust product development programme itself. In the past few years it has revitalised what was widely recognised to be basic and tired packaging. And it introduced its Goodbye Salt, Hello Flavour range with four flavour variants in February, which is made using 90% less salt than normal varieties and contains no monosodium glutamate or artificial additives.

Saturated fat issues

It's a format that meshes perfectly with current heightened consumer awareness of health issues as well as industry efforts spearheaded by the Food Standards Agency to reduce salt levels in products. Incidentally, it's worth noting that Seabrook was ahead of the curve on saturated fat issues as well, having always fried its crisps in sunflower oil rather than other forms of fat.

In addition, Tague says its Hot & Spicy range in five flavours, which was launched in 2007, has enjoyed 2,000% year-on-year growth. "We will see additions to Hot & Spicy and Goodbye Salt, Hello Flavour in the latter part of this year,"​ he adds. Beyond that there are no firm plans, but he believes the firm has more than enough to go on for now.

Aside from internal development, there's little doubt that Seabrook is also assisted by a wider general boom in crisps and salty snacks. According to a report by market analyst Mintel that was published at the beginning of this year, the entire sector has enjoyed a 24% growth in value since 2005. This, it claims, is being driven by the rise of eating in as a cheaper alternative to dining out.

Brittain confirms that this is something he is reaping the benefits of as well: "It seems to me that the whole potato chip industry is investing again." ​McVitie's, Kettle Foods, Tyrell's and Burts Chips are all ploughing cash into building production, he says, adding: "We have two new customers who are potato firms."

So it seems that despite the prevailing economic gloom, Seabrook is charting a path to growth that looks set to continue.

Related topics: Ambient foods

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