Family-owned bakery firm Warburtons was recently named as the UK’s second-most popular brand. Jonathan Warburton explains how the Bolton-based business has risen from a small regional player into “Britain’s Favourite Baker”.

When the Business Partnership organisation – set up to promote best practice in the North West – was looking for someone to give their advice on brand building, Jonathan Warburton was the obvious choice.

Warburtons’ distinctive waxpapered loaves have long been a favourite in its Greater Manchester heartland, but when cousins Jonathan, Brett and Ross took charge in 1989, its reputation was not all that well established in other parts of the region, let alone the country.

Since then, the company has embarked on an expansion strategy with a distinct set of brand values at its core. The business, founded in 1876, is increasingly becoming a national player and has spent more than £300 million in the past six years opening new bakeries and upgrading existing plant, which makes it the “the best-invested food manufacturing business in the country bar none”, according to Jonathan Warburton.

It certainly seems to be paying dividends. Over the same period, the company’s share of the UK bread market has increased “eight- or ninefold” and turnover has climbed from just over £200 million in 2001 to £420 million this year.
It has recently been described by the Guardian as the grocery trade’s equivalent of “a stealth bomber”, due to the fact that although it is fairly ubiquitous north of the M25, it remains largely unknown in the capital.

Warburtons was recently named as the country’s second-most popular brand at more than 74,000 tills monitored for the annual Checkout survey, beaten only by Coca Cola. Yet at London soirees, the chairman of a bakery business with 4,500 employees is still confronted with ignorance.

“We’re here now,” is his new response, given that the firm has finally begun selling its wares in the capital. “We refer to it as missionary work.”

Jonathan, Brett (now managing director) and Ross (now a nonexecutive) are the fifth generation of Warburtons to run the business. They took charge together when their fathers (who had to deal with interference from the previous generation) took the bold step of resigning collectively on the same day – a lesson Jonathan says that they’ll hopefully remember when their time is nearing to a close.

Although “wet-nursed” by professional managers for the first five years, Jonathan says they had a clear idea of what they needed to do with a business that had begun to lose its way. It owned 100 high street bakery shops – “none of which were called Warburtons” – a fish farm, a number plate business, a pie firm and a jewellery business, among others.

“We realised the only thing we were interested in was the bakery business. It was the only one that had our name on the door.”

The brand-building exercise which followed now looks inspired, but was taken purely because “it seemed like the right thing to do”.

Unlike most of its competitors, Warburtons hadn’t ever produced “private label”, or own-brand products for retailers.

“You only ever rent private label business – you never own it,” he explains.

Moreover, following a conversation with a local market stall grocer who asked permission to charge more than the RRP for the company’s white loaves, the Warburtons realised that people were willing to pay a premium for what they perceived to be a superior product.

“He actually sold more because the consumers understood the product quality advantage,” says Jonathan.

These things gave the company its unique selling points, and Jonathan felt if they could be properly explained to consumers they would be sufficiently “turned on” to the brand.

“It was based on the fact that we’re the only company in the world that contract grows specific varieties of wheat both in Canada and here in the UK,” he explains. “All of our trucks and our distribution depots are heated, which keeps the bread moist. All of this adds on extra cost and we spend a lot of money on our kit and our bakeries.”

However, when explaining the story to a creative director in London, he was “crestfallen” when the old agency hand replied that it was “the most boring story they’d ever heard”.

The agency explained that the fact the Warburtons were fifth-generation bakers was more worthwhile, and it advised using family members in its ads. Jonathan was initially sceptical – the only people who appeared in their own TV ads back then were “Bootiful” Bernard Matthews and Victor Kiam.

However, the commercials in which Jonathan eventually convinced father Derrick and mother Joyce to star, managed to deliver the message of baking knowledge and craftsmanship that the business had been keen to convey.

“It transformed the way we went about promoting the brand, but it was a stroke of good fortune,” he says. “It was literally the creative director telling me that it was so dull talking about Canada.”

Yet the specialist wheat, heated vans and “rational” side of brand development has been equally important for the business when selling to its customers – the major multiples and supermarkets.

Warburtons has undoubtedly been a beneficiary of the growing power of the major retailers, but it has done so on its own terms. For instance, Jonathan reckons that publicly quoted rivals might discount up to 40 per cent of the loaves they make in order to fill bakeries and chase volumes to keep shareholders happy. Warburtons, meanwhile, can afford to take a longer-term view and typically only discounts around five per cent of its product range.

He also recalls a tale of a former trading director at Tesco giving him “a massive bollocking” for spending £54 million on the state-of-the-art 200,000 sq ft bakery it opened at Enfield in 2003 without first consulting the supermarket giant over its plans.

“I sat there like a boxer being knocked around, and the thing I could say to him – which gave me an awful lot of pleasure – was, ‘but it’s my money’.”

He qualifies this, of course, as it isn’t all his. He says he’s been “incredibly lucky” to have such strong support from the small base of family shareholders that owns the business.

“But we’ve been profitable, which keeps shareholders happy, and we’ve become a must-stock item. If you’re not, you’re always going to struggle.”

Brand-building has been equally important within the company, as it has pushed far from its northern heartland via Scotland and the Midlands to the South.

“We have employees in London who have no affinity to the country, let alone the company,” he says. To counter this, the firm has a lengthy induction process and Jonathan spends up to three months a year travelling around the company’s depots meeting small groups of staff members to make sure that its message eventually permeates throughout the organisation.

“We believe it’s a rallying call, and that people working in the business know where they stand. We work very hard at having a clear set of values.”

If this sounds as if it’s disappearing into the world of consultancy-speak, Jonathan makes it clear that the values the company promotes are essentially “northern” – simple, honest and straight-talking. He says cousin Brett, who is responsible for quality control, often finds himself calling into bakeries at odd hours (particularly if Bolton Wanderers have played nearby) and spends much of his time liaising with production staff “who can spot a phoney a mile off”.

Besides, he argues that it’s had the desired effect because a company which once struggled to get people to relocate to Bolton – “I think they thought Timber Wolves would swoop down from Winter Hill for half the year” – now has few problems in recruiting quality people.

He argues that staff affiliation to a brand can be strengthened by “finding someone to hate”. It’s a strategy that’s been used to different extremes by everyone from Richard Branson and Stelios Haji-Ionnau to Alex Ferguson, but developing a siege mentality against rivals can have a galvanising effect and “has been very useful for us”, he says.

“Baking’s a small industry – everybody gets together on an annual basis so we can all lie to each other.”

However, rivals thinking of getting their own back by plaguing him with rogue e-mails sent to the address he reads out at the end of the company’s new series of ads – based on real-life experiences of members of the public mithering them at cashpoints and cinemas with product ideas – won’t be surprised to find out that it’s an alias.

“We were nervous about doing it,” he admits. “And if you e-mail that address it will get to me, but it doesn’t come directly to me.”

That’s a shame. If it’s moneymaking ideas he’s after, we’ve got scores of offers we could forward onto him, even if they are all from sons of deposed African chiefs with sacks of cash they need to export.

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