James Pozzi talks to Burton's Biscuits' new chief operating officer Neil Grocock about his appointment and plans going forward at the UK biscuit manufacturer.
You were recently announced as the new chief operating officer of Burton’s Biscuits, moving over from your previous role of chief supply chain officer. What will your new responsibilities include?
In many ways my new role isn’t all that different to my previous one. The catalyst was our change of ownership at the end of 2013, with Ontario Teachers Pension Plan taking us over. This led to a restructuring of the senior team and the board. Before I was looking after everything end-to-end supply chain, from everything from what we buy, to planning functions and the delivery end. But as part of the restructure, I’ve taken on the additional responsibilities of some of the corporate functions in HR and IS. So 80-90% of my role is the same even but with the incremental additions of the two aforementioned functions. Moving forward, I’m really excited by the new position combined with the change in ownership and the emerging plans and ambitions we have for Burton’s Biscuits.
Burton’s has invested heavily in manufacturing in recent years, with the latest investment of £14.75m announced last month. What are the ROI projections for this outlay?
We’ve delivered double digit growth in the last number of years, taking Burton’s Biscuits from a £20m EBIT (DAL) business to a £40m EBIT (DAL) business. A lot of that comes from both efficiency and a return on investment through efficiency capital. But a lot of this comes from growth and improving the mix and the margin of the business. And this can only come from innovating our power brands, and exiting low margin, non-strategic volume and replacing that with our branded innovation volumes. A big play this year has been in our savoury categories, which is a new venture for us after entering just six months ago. We identified this as a serious growth market in the UK. This has gone from 0-17% market share in this period, and that’s just two brands – the relaunched Fish and Chips product and Cathedral City Baked Bites.
Part of this investment includes real time monitoring of the baking process, making Burton’s the first biscuit company to use this. How will this enhance its manufacturing operations long term?
My background was in Unilever, and the concept of centralised control rooms that monitor real time manufacturing is not new – its well established in many food sectors. But when I arrived at Burton’s in 2010, one of the things I saw early on was nowhere in biscuits, anywhere in the world, did the idea of a centralised control room monitoring the real time manufacturing bake process occur. So we launched a pilot at our site in Wales last year, and its a straight forward idea in many senses. You have real time sensing of parameters through the bake process, for example moisture or colour, which is then fed back to a centralised control room to operators monitoring these things. This enables adjustments to be made in real time and prevents waste and increases the consistency and quality of what is made. Applying this to baking in Burton’s has attracted a lot of interest from companies within our peer group at home and abroad. We’ve recently completed installation at our Edinburgh factory and our Blackpool plant is to follow.
Why do you feel the biscuit manufacturing industry was slow to adopt such a technology that could benefit its operations?
My view is that biscuit manufacturing can be quite traditional. It is also an industry perceived to be artisanal, with a lot of black art to a baking process, when actually this isn’t actually the case. You bring ingredients through a defined process and produce a consistent end product, much like ice cream or mayonnaise. Another factor is a lot of the biscuit factories in the UK, between 30-40, are fairly aged with a lot of old assets. Perhaps companies didn’t see value in it before, but we certainly do.
With the change in ownership and new products and investments coming about, what are your key objectives going forward?
We have ambitions as management and with our new owners to transform Burton’s into a major international and UK biscuit manufacturer. We’ll do that through a number of different strategic work streams. Firstly, transformation through international growth. Another will be through consolidating the market withmergers and acquisitions. You would fully with one of our workstreams centred around exquisitive growth. We have owners with the ambition to support management to deliver. Our whole supply chain needs to be transformed to facilitate international growth. Finally, we’re looking at the portion pack convenience sector, which will be another part of our strategy. We’re very actively working on this.