Crunch time led to tough decisions

Crunch time led to tough decisions

After a stormy few years involving losses, set-backs and a management overhaul, Seabrook Crisps is finally biting back and ready for growth in 2015, chairman Ken Brook-Chrispin tells Andrew Mernin over lunch

“It wasn’t just tough, it was an absolute nightmare,” says Ken Brook-Chrispin of the tumultuous period his firm has finally emerged from. Floods which ravaged the UK’s potato stock and the disappearance of a core market overnight are perhaps the darkest chapters of Seabrook’s struggles in its modern history.

There was also a management overhaul carried out after it became clear, says Ken, that instructions from the boardroom were not being carried out. An accounting error that led to overpayments being made to Tesco and Morrisons served to only compound matters. But having slumped to a loss of £1.8m in the year to April 2012, this year the Bradford business edged £1.3m into the black, with turnover rising £1.7m to £22.8m. And it now has its sights set on long term growth, with Ken believing a turnover target of £75m by 2017 is a realistic goal.

The appointment of ex-Vimto boss Jonathan Bye in May 2012 has been credited as central to Seabrook’s recovery. That move came on the back of an unsustainable promotions campaign that severely dented earnings and led to the departure of most of the management team.

Ken, chairman and formerly CEO of the business established by his wife’s father Colin Brook in 1945, says: “We had massive promotional deals that were badly founded and were not following the strategy that had been set out. They were trying to grab market share, thinking that they could then put products up to full price and everybody would continue to buy them. But the market doesn’t quite work like that. I didn’t know about it at the time and it was all being slightly concealed. So eventually we had a total change of management and it took me six months to start getting the right people in.”

Other standout setbacks in recent years include the 2012 floods which meant Seabrook was forced to pay £600 for imported spuds, compared to around £150 for British ones. Long before that there was also the seemingly overnight decision by Tony Blair’s government in 2006 to ban crisps from schools, as recommended by Jamie Oliver. That legislation was the enzyme for Ken’s takeover of the business in the same year, as he stepped in to help drive it out of crisis.

“On the Friday our turnover was £16m and by the following Monday it was £11m. We supplied most of the schools in the North of England because we were the crisp of choice for nutritionists, as we used sunflower oil and natural sea salt. We had no warning and had to make eight delivery drivers redundant.”

Under Ken’s watch some good years followed, despite Jamie’s intervention, until the low point of the heavy losses made in 2011/2012.

The group’s latest recovery has been driven by its ability to take the fight to larger rivals in the battle for supermarket shelf space. Walkers is the dominant force and a fierce competitor, while Seabrook sits around fifth in the market with a 6% share, holding its own alongside considerably weightier businesses.

So competitive is the industry that Ken claims he once employed an ex-salesman from a national rival who told him his challenge in his former role was to “destroy Seabrook”. But despite such competition, the company continues to spread its reach nationally.

“We had a breakthrough moment recently when, on a visit to Asda, we suddenly realised we were the only brand with 32g bags in a 25g market. We realised customers were only looking at the fat content rather than taking into consideration the fact that our bags had more crisps. So we decided to match the market and have been able to compete on a level playing ground.”

Meanwhile, Seabrook supplies ‘challenger’ supermarkets like Aldi and Lidl on occasion but, says Ken, “it’s an awkward situation because 75% of our markets are with the big four, so we have the situation where we might upset the apple cart.”

But will the rising forces of supermarket UK become an increasingly important part of the business going forward? “It’s very hard to read the market at the moment. Are the discount supermarkets here to stay, or will their growth just continue for another couple of years until confidence comes back? I know a lot of people who now go to two or three different shops for different items. Will they be bothered when times are better?

“I think there’s going to be an equilibrium eventually where supermarkets will come down to the same level to compete. Aldi and Lidl will probably come up as they get more brands and need to grow bigger.”

Chartered surveyor Ken Chrispin became a Brook-Chrispin when he married the heiress of the Seabrook crisp empire Jane Brook. For someone who, at school, was nicknamed ‘POPA’ after a crisp advert (pop a crisp in – get it?), it’s a quirk of fate that sees him now boss of a crisp business. The ‘C’ initial given to his children – to create ‘C Brook’ should they ever wish to help run the business – is no coincidence. And while his family is intrinsically linked to the business, Ken says the entire Seabrook team is equally passionate about it. “If you go round other factories in our sector, there’s no love there. It’s a machine,” he says.

“We’ve got three or four generations of families working for us that have so much knowledge and dedication to the company. If you took their arm off, it would say Seabrook through it like a stick of Blackpool rock.”

From a commercial point of view, Seabrook’s current resurgence follows its decision to trim down its range of flavours. “We were haemorrhaging money and realised that out of the 26 flavours, 98.5% of profit was from 12. So there were 13 flavours that were more of a service to the people who were used to buying them, often by mail order. So we got it down to 12 and then also launched our lattice product, which has another five flavours.”

With around 128,000 boxes of crisps flying out of the factory every week, flavours have to be spot on and rigorously tested. The company works with a handful of flavour houses, as well as ‘flavourists’ – talented individuals whose services are hotly contested. “Once we’ve set out our spec, such as gluten free, all natural ingredients and complying with 2015 salt content regulations, we have about 15 versions of a flavour developed. We choose one we like but it then takes another hundred attempts to get it right, with my wife, daughter and I in the lab doing the testing.”

The company also uses its staff as guinea pigs to make decisions, noting which pile of different flavoured crisps goes down the quickest in its offices. While Seabrook’s existing markets now look to have solid foundations, the business continues to seek new revenue streams, says Ken. The snack market may not seem the most innovative to an outsider looking in. But Ken insists his is an experimental firm always keen to test boundaries and explore new opportunities. And in the true spirit of the inventor, he’s not afraid of failure.

He recalls the company’s attempt to deliver its now discontinued ‘Goodbye Salt Hello Flavour’ range into chemists. Seabrook developed the products for people with high blood pressure who otherwise avoided crisps due to the dangers of their salt content.

The aim was to have them clearly marked as a health food in a prominent spot in pharmacies. But a breakdown in communication – stemming from issues Ken says are linked with the long since departed former management team – saw them thrown onto crisp aisles up and down the country. “If you don’t have a dog, you don’t go down the dog aisle,” says Ken. “So why did they think people with high blood pressure would find them on the crisp aisle?”

Seabrook also hatched an ingenious plan to develop crisps specifically to be sold by pub landlords that were proven to increase bar trade. Inspired by the old trick of using salty peanuts to get patrons thirsty and ordering more drinks, Seabrook developed a range of especially spicy crisps for pubs.

It even carried out a controlled test – of a dominoes team – measuring drinking speed against crisp consumption. Tests were successful, with the crisps causing a clear shortening of minutes per pint, and talks with the likes of Wetherspoons had begun. But price was the ultimate stumbling block. “They just couldn’t see the bigger picture and how it would boost their trade,” says Ken defiantly.

Not all innovations at Seabrook’s headquarters fail, however, and Ken is optimistic about a top secret health food project aimed at the children’s market. “It’s an ultra-healthy snack that kids will actually want to eat, and will give them part of their five-a-day. We’re looking at launching it in August 2015. That’s all I can say on that.”

Before we wrap up, Ken considers what the future holds for his own career. There’s a note of uncertainty in his voice. “I’m getting too old. I’m 64 now,” he says. But admits that, since none of his daughters are willing to give up flourishing careers elsewhere to commit long-term to Seabrook, his exit would inevitably end the lineage of his wife’s family in the firm. This wouldn’t necessarily compromise the company’s traditional values, he says, but any handing over of power would need to be managed carefully. He adds: “I’ve no plans to exit the business…but never say never.”

For now, though, there’s much to be getting on with as the firm battles back to full strength and fights for its share in a competitive market.