Bonnie bits in the Balmoral

Bonnie bits in the Balmoral

Over the past 17 years, Paul Grant has built up the Mackays jam and marmalade business, based in Arbroath, with a sleeves-rolled up approach, writes Gillian Law.

The Jammy Man – that’s the local nickname for Paul Grant, chairman of Arbroath-based marmalade and jam manufacturer, Mackays. It’s a name that suits his sunny, bright personality as well as it does his choice of business.

But there have been times when Grant must have felt decidedly far from ‘jammy’ – putting all your hopes and dreams into a business only to be told you’ve moved into a dying market sector is an undoubtedly tough wake-up call.

Grant bought Mackays 17 years ago, in 1995, after a highly successful corporate career with United Biscuits. Starting as a management trainee from school, he had worked his way through a wide range of roles and business areas.

“I was always more interested in risky, challenging opportunities. “Never once in my 27 years at United Biscuits did I move to the next ‘comfortable’ promotion – I always moved to a different division, or a different function.”

After working all over the country, in increasingly senior roles, Grant found himself in London as the human resources director of McVitie’s. In his late 40s, he was on the board and in a very influential position within United Biscuits.

But the entrepreneurial urge was beginning to bite – and he could see the ideal opportunity in a little jam-making factory that United Biscuits owned in Angus. As jam was a non-core activity, he knew the company would be interested in selling it, at the right price and to the right buyer.

Here was the chance to do it for himself – to put all the knowledge and experience he had gathered over the past 27 years and put them to use in his own business. It took three years from that first interest to taking over the keys to the factory.

Keen to leave on the best possible terms, Grant worked hard to develop and hand over to his successor within United Biscuits, while also quietly taking over functional responsibility for the jam business.

Finally, the day came when he moved up to Scotland with his wife and three children, and walked into the factory as owner and boss.

“At the time, the factory had 19 people working there. I’d come from a head office with hundreds of people, to that small environment where I had to be ready to get my hands dirty, to contribute at any level. And I was the boss, the owner – it was daunting.”

He also had to take responsibility for financial matters that had been a bit remote to him before.

“In the corporate world you do talk about cash management, and reducing debtors and all these classic things – but there are other people dedicated to actually doing it. When you’re right there, it’s your money – and you need to pay the wages, pay the suppliers … you quite quickly get into the sharp end and [see] what you’ve let yourself in for!”

Having staked his house and future on this business, Grant knew he had to make it work. He had a contract to supply the jam for United Biscuits biscuit filling for two years, but was aware that he would lose half of his turnover when that deal came to an end.

So it didn’t help when buyers shook their heads and asked if he knew what he was doing. “I went round doing my early research and for three of four years buyers said ‘What are you doing?

There are already too many suppliers, we’re reducing shelf space and the last thing we want is a new supplier. We love the story, love the taste of the product but you’ve misjudged the opportunity and the competitive situation.’”

Hardly encouraging. But Grant clung to the fact that people did like the taste of the product. He had stuck to the old fashioned, open-boiling method that had always been used in the factory, and it really did create a better ‘home made’ flavour to the jam and marmalade. He also discovered among his new staff, a ‘Mr Marmalade’ – an employee who had come from the now-closed James Keiller & Sons marmalade factory, home of the famous Dundee marmalade.

“He had come to Mackays as the general manager and he had brought his knowledge of the Keiller recipe with him.

"So when I arrived, although Mackays was just a bulk manufacturer for United Biscuits, he had got bored making jam and had gone and done his own thing. And he had entered competitions and won, for the best marmalade!”

Knowing that the company had such good quality products gave Grant the confidence to carry on.

“I knew we had something there that was a bit special.” The question was, how to make the world recognise how good the products were? Two things turned the situation around.

The first was the development of a new, transparent labelling system, which made Mackays products stand out on the shelves and finally got supermarket buyers excited, and the second was Grant’s determination to take Mackays into export markets.

He had watched Walkers take its shortbread worldwide, and saw no reason why a high-quality, Scottish marmalade and jam business could not follow suit.

“Walkers had created this significant exporting business with an easy to transport, good shelf-life product, and they had led the way.

“I said to myself – I’ve got heritage product, I’ve got a history, I’ve got traditional methods – and I can endorse it with a bit of tartan! As I’ve learned, if you don’t put tartan on a product that you’re exporting, that’s a fundamental error – the UK market might be different, but if you’re an exporter then no tartan on your packaging is a disaster.”

Mackays now sells to over 50 countries internationally. Marmalade is the leading product, popular across the globe in any market that appreciates British heritage and ‘Western’ ways of eating.

Even in Asian countries where people are more inclined to eat rice, people are increasingly choosing bakery products for weekend treat breakfasts – and where there are scones, pancakes or bread, there’s a need for preserves. International sales received a boost from an unexpected source back in 2004, when Mackays won the Queen’s Award for Enterprise.

“When we won, we were pleased, obviously, but we didn’t realise the significance of it. But as we discovered, it gave so much confidence and belief to our overseas customers. The moment we won the Queen’s Award we just became a different level of partner,” Grant says.

Mackays won the award again this year, for sustainable exporting. Mackays also bought the Mrs Bridges preserves brand from Hudson’s International in 2000, giving it a new market in the independent trade, away from supermarkets.

With increased supermarket sales, Mrs Bridges and the international business, Mackays is doing well, but it’s been a long, hard slog, Grant said. He had a real wake-up call when he moved from a large company to running his own.

“When I started I thought, genuinely, that I’d done a great deal with United Biscuits and within three to four years I would be quite wealthy and successful! But that was a dream – that was coming from a corporate understanding of running a business.

“The reality is, seventeen years on, we’ve created a business with potential. We have some great brands, great people, great customers, but we haven’t paid a dividend yet. I think we will soon – but we haven’t yet, because at the end of the day we’ve been investing back into the business.”

That investment included building an expensive new factory in 2008 – needed if the company was to grow, but a massive financial hit at the time. Costs overran, to 25% higher than expected.

However, the company now has a modern, efficient factory (albeit one with traditional copper and steel open pans) and will be able to add shifts and expand production as necessary.

It was a “challenging” period, Grant says, laughing ruefully. “But sitting here today we have a magnificent factory, and in years to come it will prove to have been a very wise decision. As long as the business continues to grow!”

Grant is in the process of handing over control of the business to his son Martin, who has been working his way up through the company for eight years. Although the family has sold some equity to raise necessary funds, it still owns just over 80 % of the business and Mackays remains very much a Grant family concern.

One of Martin’s sisters, Nicola, is business development manager for Mrs Bridges. The handover is going well – a little too well, laughs Grant.

“He’s picked it up very quickly, and is quite keen to get on and make it his own. Which I don’t have any problem with, but it just means I’m having to come to terms with it a bit quicker then I might have thought!”

Whatever happens, Mackays will continue making its traditional marmalade and jams in the old-fashioned style, ensuring the taste stays as close to home-made as possible, Grant says.

That taste has seen its success to date, and brought a recent, dramatic extension of Mackays listing with Tesco and Sainsbury’s across the UK.

“Which is brilliant. All the work of creating the brand, building the factory with extra capacity has now come together. Martin will read this and claim he got the business, and its true – it was his initiative that led to this. But it’s a great conclusion to my era, I say!”