Samworth's success is no accident. Although Stein would be the first to attribute it to people working within its devolved company structure, it was his vision in creating the dynamic sort of businesses he has that has made all the difference. It has been instrumental in the success Samworth has achieved.
As Stein says, it was about appointing the right mds for these businesses: people with the right mixture of knowledge and entrepreneurial skills to take advantage of the opportunities thrown up by the changing food business environment. It was about employing people who really understood own-label and recognised how the business model differed radically from that of branded production.
While Samworth is probably best known for its branded Ginsters pasty operation in Cornwall and, to a lesser extent, its Dickinson & Morris pork pie business in Melton Mowbray, it now has 13 operations split between Leicestershire and Cornwall, for which about 75% of turnover is in own-label products.
Stein recognises that life experiences make us what we are. His food industry career started as a management trainee at Bowyers at Trowbridge in Wiltshire at the age of 18. Even as a schoolboy growing up in Liverpool, Stein's holiday job experiences brought him into contact with some terrible management–worker relationships. This obviously made a lasting impression on him.
"I noticed some pretty fundamental bad experiences," remarks Stein. "I would see the management walking around and they would never talk to people; they ignored them completely. I thought: 'What a way to treat people.' The industrial relations were appalling." He worked at another site where the night shifts were run by union shop stewards no managers were on duty! He thought: "I could do a better job than these people." And, with these formative experiences etched in his brain, he went on to prove exactly that.
What attracted Stein to Bowyers, following the completion of a business studies course in Wolverhampton, was the entrepreneurial spirit that permeated the company, he says. Stein stayed with Bowyers for around 12 years before moving to Northern Foods, where he worked for around 13 years before joining Samworth.
By the time he left Bowyers at the age of 30, he had become a factory manager, in charge of over 1,200 staff. The reason he moved, he says, was that the markets being served by Bowyers were changing dramatically. But he didn't think the firm at that time saw the way the wind was blowing in terms of a move away from branded products to own-label, notably led by the likes of Marks & Spencer (M&S), followed closely by Tesco and Sainsbury. It was time to move on.
"I looked at what Northern Foods and Pork Farms were doing and thought, these people have got it right, these people have embraced this," said Stein. "They are still building their brand, but not to the detriment of own label." His job with Northern involved running a new own-label factory dedicated to serving M&S. It was here that he honed his skills in sales and marketing, working closely with retailers. Stein eventually worked his way up to md of Pork Farms. "I hasten to add, when Pork Farms was a success," he stresses he grew the business from a regional Midlands supplier to a national UK brand. In recognition of his achievements in raising turnover from £2M to around £6.5M, he was promoted to Northern's executive board.
But in what Stein must have sensed as a distinct case of déjà vu things began to go awry. This coincided with the appointment of a new chief executive in the form of Joe Stewart, who Stein believes did not understand the own-label chilled foods business. It was clearly time to move again!
And so he arrived at Samworth Brothers, a privately owned company where he was able to prove himself and where he has remained. At Samworth Stein was able to put in to practice the knowledge and ideas he had accrued over his career to remarkable success. Initially, he was employed to run the Leicestershire business, but within 12 months of joining, he was running the whole show.
Although it was not the biggest job he was offered, he took it, he says, for two reasons: first, it would allow him to hone his skills further; and, secondly, to "show these bloody idiots at Northern how to run a chilled food business".
Looking at where both firms are today: Northern Foods acquired earlier this years by food industry entrepreneur Ranjit Boparan after a number of problematic years and Samworth Brothers still experiencing impressive growth of 10–12% a year it doesn't take an economics degree to work out who has been proved right.
Samworth's rise and rise
In his time with the company, Stein has expanded Samworth Brothers from a business primarily in pies and pasties to one which encompasses a diverse range of chilled foods, operating in sectors from sandwiches, sausages, hams, pies and ready meals to desserts. "We are probably the most broadly based chilled food business in the UK," claims Stein. The one area it is not in is pizzas but, given the fierce competition in this sector, it's not one that Stein aspires to.
When he originally took control, Stein used the opportunity to restructure the company into six separate operational businesses Ginsters, Kensey Foods and Tamar Foods in Cornwall, and Walkers Charnwood, Walkers Midshire Foods and Bradgate Bakery in Leicester, giving a degree of autonomy to each of the mds. Today there are 13 businesses, employing 7,000 staff.
To date, Samworth's meteoric rise has been attributable primarily to organic growth having better facilities and doing things better than its competitors and winning business with the retailers from them as a result.
Whether that can continue at the same rate into the future is uncertain as soaring input costs and retailer resistance to price rises squeezes the company's ability to invest in the latest production facilities. Samworth has spent around £3040M in capital investment over the past few years, reports Stein.
Stein says that future growth is expected to come mainly by becoming bigger in the areas in which it already operates and by increasing the number of retailers it serves. It is also likely to involve some acquisitions. But although Stein admits that Samworth had been interested in acquiring certain businesses that came onto the market recently notably Uniq, which has just fallen to Greencore he is clear that Samworth is not prepared to pay "silly prices" to acquire them. That view is unlikely to change regardless of who takes over after his departure.