As it approaches its 20th birthday, Duchy Originals, the UK food company set up by the Prince of Wales, is undergoing something of a rebirth. Under new chief executive Andrew Baker, Duchy plans to return to its roots as a champion of sustainability, while looking to break into new markets, including the US. Dean Best spoke to Baker about his ambitions for the company.
Duchy Originals, the UK firm set up almost 20 years ago by the Prince of Wales, is getting back to basics.
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The company, founded in 1990, was based upon the principles of organic farming and its ties to rural communities. Duchy, however, had lost its way, selling an expanding but unwieldy range of products that was becoming less closely linked to the origins of the business.
Late last year, ex-Cadbury man Andrew Baker took the reins at Duchy. Cadbury, the confectionery giant, has in the past faced charges that it was simply selling too many brands and Baker, who was MD of Cadbury’s businesses in Africa, the Middle East and Turkey, found a similar problem when he arrived for his new job back in the UK last autumn.
“I found a company with a really strong brand asset but with a business model that had begun to run out of life,” Baker tells just-food. “The growth of the business had really been fuelled by a new product development programme that was more about proliferation than refreshment.”
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Baker points to the “over 50 SKUs” that Duchy had in its range of chocolates which, he argues, led to a lack of focus among the company’s sales force and made the portfolio difficult to manage. “When you lack focus, people begin to get distracted, buyers and consumers get confused and the whole proposition is weakened. If you have one or two categories misfiring, it devalues the whole brand and proposition.”
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By GlobalData
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| Andrew Baker, chief executive, Duchy Originals |
Warming to his theme, Baker says Duchy’s “proposition” had also been hurt by an insufficient focus on the company’s roots . “The business had concentrated a little too much on its premium ambition more than its more activist, organic past,” Baker says. “The message of the brand had been diluted away from being an activist in favour of organic agriculture and organic products, more to being a slightly me-too, premium brand.”
Upon taking the helm at a company, an easy task is identifying what needs to change. Far harder is carrying out that change. Baker believed Duchy’s portfolio was focusing on the wrong areas and therefore, in some areas, cuts needed to be made. As a consequence, some of Duchy’s suppliers fell victim. One such firm was UK meat processor Cranswick, which had supplied Duchy for 12 years, but which parted ways with the company earlier this year.
Baker, however, says the decision needed to be made, even if it caused anxiety among Duchy’s suppliers. “In that category, we had one too many suppliers and that was making us less efficient in the way that we integrated our pork business from farm to fork. What made some of the suppliers nervous was the reaction to that decision that the press picked up from Cranswick.”
The company, however, has tried to assuage those concerns. Last week, Baker hosted a conference for Duchy’s suppliers at the home of the Prince of Wales, Highgrove. At the meeting, Baker unveiled three new suppliers to the company, a move, he says, that helped “settle any lasting nerves” among its producers. Nonetheless, he adds that Duchy will continue to look to rejig its product portfolio. “I made it clear to each supplier that, in some instances, they’ve just got too many products out in the market to be commercially viable for themselves or for us. That’s what we’ll tackle in the near future.”
Under Baker’s stewardship, Duchy has also set about revamping the sales and promotion of the products sold under its trademark. Responsibility for selling Duchy products now rests with its suppliers, although Baker and his team will handle sales in selected categories.
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| The Prince of Wales, who founded Duchy Originals in 1990 |
“We were trying to sell products across more than 40 categories with a very limited sales force. We ended up being jack of all trades and masters of none,” Baker admits. “We were not very good on category management, we had no particular consumer or market knowledge to pass on, and we were pretty inefficient at running retailer promotions. Producer partners, in many instances, have very good category knowledge, understand their particular market sector extremely well, have good relationships with buyers and can influence the category’s development for the benefit of the retailer and the Duchy brand.”
At the Highgrove conference, Baker also outlined his ambitious plans to quadruple the size of the business over the next four years. Duchy, Baker says, is worth around GBP55m (US$107m); his aim is to see the company grow to around GBP220m. To do that, Baker wants to more closely align with what he sees as Duchy’s roots as a “consumer champion”. Moreover, he wants to further expand the business overseas.
UK shoppers, Baker asserts, had looked to the Duchy brand because of its record on issues including organic agriculture and animal welfare. He believes that, despite concern over the economy, and despite the price premium on some of Duchy’s products, those kinds of issues are still important to consumers.
“I would like to re-establish [Duchy’s] ability to communicate with consumers as a respected voice on all things connected with sustainability. I hope that consumers come to see us as a champion of sustainable food production and that’s certainly where we’ll be investing in our brand,” Baker says. “People often say that when money is a bit tight, you make your choices more carefully about how you spend your money on food. There is a definite move towards understanding the product and the values that stand behind it, especially when there is a credit crunch on. It makes it all the more important to make the right choice.”
And Duchy’s biggest retail customers, including Sainsbury’s and Waitrose, stand behind Baker’s plans, he says. “The multiples were among the first people I went to talk to when I took this job. I’ve shared the strategy at every step with our key retail partners and they’ve all bought into it very positively.”
The bosses at Sainsbury’s and Waitrose were not the only ones to have been involved in the new dawn at Duchy. According to Baker, the Prince of Wales is “very involved” in “every aspect” of the Duchy Originals business. “He was involved with me in writing the brief for the strategy development programme that we’ve been through,” Baker says. “He’s been involved in every aspect and has been incredibly supportive during this slightly difficult phase of restructuring and rebuilding for new growth.”
And Baker believes international markets can be a key driver for any growth the company sees in the years ahead. Duchy exports its products to around 15 markets but, outlining his international goals, Baker says he plans to take the business into the US and India and, tellingly, encourage local production of organic food in these markets – rather than merely importing goods from the UK.
“It will signal an end of trying to force marmalade on a country that never eats marmalade but instead making what appeals to them locally in the right way,” Baker says. “That means encouraging local farmers to grow their crops in a sustainable manner and then take them to the local market through local manufacturers. In the US, for example, although there will still be a proportion of imported products from the UK, at maturity that business will be primarily US small farmers growing sustainably-produced crops to make US products locally.”
Sustainability is, perhaps, the watchword of Baker’s strategy for Duchy. During his review of the business, he found a company which lacked sustainability internally, in terms of its product portfolio and its worsening relationship with its retail customers. Baker now hopes he has got Duchy’s internal structure in the right place to push forward with his ambition of promoting the company’s sustainability agenda.
“We want the shield of the Duchy Originals logo to symbolise a trust in a company that has made its best effort to do the right thing by ethical trading, sustainable farming, organic agriculture and animal welfare,” Baker says. “So many people have a view on sustainability and if our brand can become a badge for good about sustainable agriculture, then we would have achieved our objectives.”
