 Whitworths - The Interview
When leading venture capitalists European Capital bought Whitworths in October 2006, they were keen to give this long established and much loved British food business an injection of 21st century consumer marketing and category management to drive it forward into a new era of success. Hence Whitworths' new owners brought in ex-UB (McVitie's & KP snacks) marketing expert Will Carter as Chief Executive. The Grocery Trader went to Wellingborough to meet him.
 "It was a natural decision for me to come to Whitworths, " says Will. "After leaving UB I had worked with both Trade and Private Equity players in the food industry as a consultant. This led to working with European Capital when Whitworths became available. "
Whitworths currently has two European Capital members and a non-executive Chairman on the group board, but as Chief Executive Will enjoys a free rein and great support: "Private equity houses and backers like European Capital put financial expertise in place when they buy businesses, but they expect the management teams and CEOs they support to realise the business plans to drive the return - they don't buy businesses to run themselves.
"European Capital recognised from the outset that Whitworths would benefit from further marketing and capital investment, and they have significantly increased expenditure levels in both areas. Private equity goes into businesses like this to drive top and bottom line growth and realise opportunities. They know you've got to invest in products, brands and add value to succeed. "
Some 70% of Whitworths' turnover - around £100m - is retail. Some 20% is what Will calls 'b2b, ' ingredients for cereals, bakery and other food manufacturers, and the rest is primarily foodservice. Autumn and winter are particularly busy times for the company, with staff numbers boosted to around 370 by agency staff. Nearly all Whitworths' production takes place at Wellingborough. Warehousing and transport is outsourced but run from there.
To ensure consistent supply quality, Whitworths trades with 80 countries, directly or indirectly. The company has a minority stake in a factory in Turkey and packs raisins in California. "Sourcing from further afield is becoming increasingly important in the mix, " says Will. "Our large scale relative to the competition means we can enjoy meaningful trading relationships with growers around the world. "
Keeping the customer satisfied
As a hands-on Chief Executive, Will is involved in Whitworths' customer contact. He has recently appointed a new Commercial Director, Colin Stephens, ex-RHM, who heads Whitworths' account team, but Will still spends time with major customers himself.
An important part of Will's role as Chief Executive is championing Whitworths' marketing effort. He is passionate about it: "I come from a business where category management was an entrenched discipline. At Whitworths, we need to upweight our category thinking in line with our stature, and put clear marketing in place where it's not been before. There are huge opportunities for "signposting" to help consumers - these categories aren't black and white; boundaries are blurring between baking, cereal topping and in-home grazing, and snacking. We've an obligation to get under the market's skin and provide leadership and understanding. "
Will involves himself with the detail and process of Whitworths' marketing and NPD: "I set a framework and champion the overall direction. I look at the primary opportunities to take our capability to best meet consumer needs. Snacking - packs below 200g - is our fastest growing area, and we have the capability and competitive advantage to develop some great consumer propositions. "
In value terms, culinary savoury products and whole foods are a £100m category, in-home fruit, nuts and seeds are £300m and out-of-home fruit nuts and seeds are £125m. Whitworths' share of supply of out of home snacking is 20%: its in-home share is double this.
"I'm a firm believer in developing NPD platforms, rather than isolated products, " says Will, who advocates looking at the big questions such as how to create convenience formats and snack packs and make healthy snacking great tasting.
Will maintains it is inherently possible to market Whitworths' products in the same way he marketed savoury snacks at UB: "The dynamics are all on our side. There's a healthy snacking ladder consumers are climbing to reach a balance of health and taste that suits them. At the same time the Government is pushing the 5 a day proposition, and all sensible parents want healthy snacking for their kids. With all this going for us, the opportunity is enormous.
"The key is to recognise that snacking is a ladder, with room for pure fruit, mixes and snack packs as well as scope to add indulgence and difference, provided we are straightforward about communicating what the products are about. Is there a place for yogurt-coated fruit and nuts and more indulgent fruit-based snacks? I'd say yes, provided we market them for what they are. Our mission is to get more people eating fruits, nuts and seeds. If flavours, juice infusion and coatings help in that aim, that's great. We believe in helping our consumers to access snacks, but you must tell it like it is. Some less healthy snacks out there are masquerading as healthy. "
Whitworths - a name to conjure with
The Whitworths consumer brand still has a role in 2008, Will Carter insists: "The Whitworths name is hugely trustworthy, with a lot of heritage primarily in baking and culinary. However, in our brand development strategy, we recognise that in impulse snacking, stand-alone brands as well as trusted house brands like Whitworths have an important place - hence Sunny Raisin, and our new 'Love' brand, which isn't marketed under the Whitworths name. "
For the uninitiated, 'Love' is a range of great tasting premium priced adult snacks offering 'irresistible goodness', available so far only in bar format but with scope to go virtually anywhere, according to Will: "It's a category that needs investment to make it grow, and we are spending money at point of purchase to build it into an anchor brand. "
The Whitworths consumer in 2008 is primarily female, Will concedes, "but it's a myth that it's solely the home baking audience. Our core consumers use our products for a wide variety of uses. The culinary end of our business is 'foodies, ' including increasing numbers of men. We've done a lot of work in whole food product development, but fruit, nuts and seeds are still our core. Superfoods are a market, and rightly, but the real change will come through greater focus on snacking and convenient packaging. Fruit snacks are currently relatively 'low value-add': there's an opportunity to differentiate and increase convenience with multi-packs, which have the lion's share in salty snacking. We need to mirror that in fruit snacks. "
Clarity on shelf is crucial, says Will: "Within Whitworths' various categories there's too much duplication, and we risk confusing the customer. When you're talking category management, the message is often that less is more. We have several hundred SKUs, and there's an argument for simplifying and reducing complexity, but at the same time you must remember that variety and range are what keeps the shoppers coming back for more.
"We talk to retailers about category management and bringing out ranges and platforms under our brand or the customer brand. In both instances offering consumers clarity is the key. "
There's far less block merchandising of consumer propositions in this sector than with the salty snacks Will is used to: "There's been an absence of category management input. Historically the category has been supply-led, and we really need to see how consumers shop it and what they would find helpful from manufacturers and retailers.
"We're at a similar stage with snacking fruit to when cereal bars were first launched: there was no consistent merchandising then, either. Eventually we expect to see a healthy snacking block, either on the end of the in-home fruits and nuts section or on the end of salty snacks. Retailers are currently considering both routes, and we're exploring the options with them. "
Despite recent culinary 'designer brand' launches from some major manufacturers, Will Carter doesn't see trendy branding as key for the development of the culinary business: "Whitworths already has huge strength in the culinary sector, which we need to unlock. The problem with inventing new brands when you have a heritage like Whitworths is that you risk losing integrity. But we do need to bring new vitality to the brand through both range development and graphics.
One challenge our marketing teams face is the lack of consistent presentation of our brand across our portfolio. We need to further strengthen our identity as well as innovating within our product range.
With such a wide portfolio, you'd suppose it would be a long sales call for the Whitworths team. Will begs to disagree: "It's not as complex a process as you might think. Cereals and pulses are one buying structure, and in and out of home fruit and nuts is another. We also see some snacking buyers. The real dialogue needs to be about developing the categories. Any new product development from here on requires focus in the context of our overall category vision. "
When it comes to consumer marketing, Will Carter believes in investing close to the point of purchase with trial generation, whether through EPOS-based activity, retailer magazines or sampling: "Our retail customers themselves can be our most powerful marketing allies, and retailers play a huge part in range "blocking" and visibility. "
Will won't disclose figures, but does reveal that Whitworths' consumer marketing budget represents a 'very significant' spend for the category: "We run ads for our snacking fruit ranges in targeted press. Most of our investment in the culinary sector is in range development, such as whole foods. A number of retailers are strengthening their ranges for the consumer and ensuring they stand out in store, and we work closely with them to help achieve this. "
One year into the job, Will Carter is clear about his ambitions for Whitworths: "I want us to lead the market in our thinking and category development; developing snacking in all formats and being pioneering in range and space input and creativity and packaging innovation. There is a role for pure whole food and healthier snacking. We also need to play a leading part in the dialogue with the powers that be in terms of issues like labelling. Traffic light labelling for food can be counter-productive, and personally I'm not happy that when you dry a grape it gets a red light all of a sudden, just because the natural sugars get concentrated along with the goodness of the fruit! "
Whitworths' NPD will be around great tasting healthier snacks, Will says: "We've got some savoury products on the stocks but the priority is to give greater taste appeal to our range of healthier snacks and address purchasing-led issues in format and design. This is a category with double-digit growth. We need to recognise the core rules of snacking and provide innovative offerings that go further, be they snack packs, lunchbox items kids want, multi-packs or the 'Love' range. "
As a seasoned marketer, Will says he is "not a great believer in awards for the sake of them, but if in a year's time we're recognised as category leaders in the true sense of the word, I'd be happy. If by then the multiples' trading directors are saying we've transformed the categories we're in, that would be a major achievement. "
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