The sale of Paterson Arran to the UK’s second biggest biscuit manufacturer reflects “just how important Scotland is to us” says Burton’s Biscuit Co Managing Director Simon Browne (pictured).
When news filtered through that Burton’s Biscuit Co had acquired Paterson Arran, the immediate reaction from many retailers was concern that an iconic Scottish brand could be under threat as it was absorbed into the enormous portfolio of the UK’s second biggest biscuit manufacturer.
Paterson Arran is, after all, one of Scotland’s leading independent food companies operating in both retail and foodservice with its own impressive collection of biscuit and chutney brands, including the ubiquitous Paterson’s shortbread but also extending to Brontë, Café Brontë and Arran Fine Foods.
Burton’s Biscuit Co Managing Director Simon Browne, however, is quick to allay those concerns by confirming straight off the bat that “the Paterson brand is here to stay”. Browne is in fact positively ebullient about the potential that exists for the Paterson Arran range as part of a much bigger group. “When we bought Paterson Arran we knew we were getting a great brand and a great portfolio of products but as we’ve begun integrating the two business we’ve realised that what we’ve actually got is an amazing brand with an amazing portfolio of products. We are so excited about how we can help develop and grow the brand, particularly in Scotland, but also across the UK and even into export markets.”
The acquisition is the latest development in what has been a transformative period for the nearly 100-year-old Burton’s business. The company was purchased in 2013 by the Ontario Teachers’ Pension Plan, a Canadian pension fund that was committed to investing in and growing the Burton’s business for the long term. In 2016 the company sold its Cadbury licence back to Mondelez International which represented a major change of direction for the company.
“The Cadbury products had been the jewel in our crown,” explains Browne, “but we believed that maybe a little complacency had crept in and we needed to develop a new strategy to reinvigorate the company and build some fresh momentum. The new strategy we developed was centred around a very simple concept: we wanted to focus on baking great biscuits.”
Browne says that the company also wanted to embrace private label more enthusiastically as it represented a huge opportunity and one that Burton’s was perfectly placed to exploit. That change in direction reaped rapid results; Burton’s is now, for instance, the biggest private label biscuit supplier into Tesco.
“Around that time we also entered a new licence agreement with Mars,” he says. “That has proven to be a great move and we now produce a fantastic range of Mars biscuits that have been extremely popular.”
A key focus in this period, says Browne, was in dedicating more energy to the premium, artisanal end of the biscuits market which the company believes offers some great scope for growth. He explains: “The traditional market for biscuit barrel type products is huge and important but it’s not growing, so we wanted to move more proactively into the premium end of the market.”
That strategy led to Burton’s acquiring the Thomas Fudge’s business, a £10m turnover company that specialises in high end, high quality biscuits and bakery lines. The strategy ultimately also led to the very recent acquisition of Paterson Arran.
Paterson Arran employs around 200 people and runs two production facilities: the Royal Burgh Bakery in Livingston, West Lothian, which produces an award-winning range of shortbread, oatcakes, biscuits and cookies and the Old Mill, Lamlash, Isle of Arran, which primarily produces a range of delicious chutneys, mustards and preserves.
Browne explains the thinking behind the deal: “Firstly, we weren’t very strong in shortbread, other than in private label where we supply M&S for example, but we had no strong branded offering. Secondly, we ween’t very strong in foodservice and that’s a fast-growing market that Paterson Arran is expert in. And lastly, regionality wasn’t something that we had been particularly focused on, we tended to take a national UK-wide approach. Paterson Arran ticked all three boxes and it also came with some other very significant attractions for us.”
Those significant attractions included some state of the art production facilities, a very experienced and successful team of people, and expertise in smaller portion packs.
While there will undoubtedly be some consolidation, Browne insists that the plan is to grow production across the entire enlarged company and has already unveiled plans to invest in existing Paterson Arran sites in Scotland.
He says: “There is a very small amount of duplication across the two companies so a very limited amount of consolidation will inevitably be required but we bought Paterson Arran as a platform to grow the enlarged company, to increase production and to leverage the power of the bigger business to grow in the future.”
And the acquisition doesn’t mean that it’s all one-way traffic, says Browne. “We’ve been consistently amazed with the Paterson Arran business. The team are phenomenal, their expertise is superb and a lot of that expertise is in areas where we have traditionally been weak at Burton’s so we see lots and lots of benefits to the wider team now working together.”
So, far from losing focus, Scotland is set to be more important than ever for Burton’s, as Browne explains: “For us, it’s all about baking great biscuits and Paterson Arran are doing just that. They have invested in some really cutting edge technology and over the last few years they’ve been doing some really impressive reformulation work on their core products. Their relationship with Scottish retailers and the Scottish market is something we admire and want to build on.”
He even goes as far as to say that he hopes to be able to “sprinkle some of the Paterson Arran magic onto the Burton’s brands in Scotland”.
It’s worth noting at this point that Burton’s has had a long commitment to Scotland. It has had a bakery in Sighthill for over 60 years and recently opened a new development kitchen in Edinburgh.
So it may be the end of an era but it’s also the beginning of what looks to be an exciting new chapter for Paterson Arran and indeed for Burton’s.
Private label will continue to be a key opportunity with the combined company supplying everyone from Asda to the majority of the symbol groups, while the opportunities that abound for the branded side of the business are now far more likely to be fully exploited with the weight of a much larger business behind it.
“There’s massive scope for growth for the Paterson Arran business, massive,” concludes Browne. “We can see growth coming in Scotland and across the UK and we also believe there is significant scope to target export markets. Burton’s already has a major export network and we can make use of that to take the Paterson Arran range to export markets across the globe.”
Closer to home, however, it looks like Scotland’s local retailers can rest assured that the Paterson Arran brands aren’t going to disappear any time soon and, with the might of Burton’s behind them, there will be plenty of scope to grow sales and profits through these iconic brands.
