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Last Updated: Wednesday, 7 March 2007, 23:00 GMT
A family firm that blows its own trumpet
By Anthony Reuben
Business reporter, BBC News

When Jonathan Warburton went to an advertising agency in the late 1980s to discuss the television adverts he wanted to make for the family bread business, his ideas met with a lukewarm reception.

Jonathan Warburton
Jonathan Warburton persuaded his parents to be in the first adverts

"We thought it was going to be about Canadian wheat and the creative director said, 'That is possibly the most boring story I've ever heard - the only interesting thing about you lot is your family.'"

Jonathan Warburton had to persuade his parents to appear in the first adverts.

"It was at the time when Bernard Matthews and a guy called Victor Kiam were doing adverts", he told the BBC.

Mr Kiam was the man who famously liked the Remington shaver so much that he bought the company.

"I was just a callow youth, far too cheeky for my own good, and I think my mother and father took pity on me and thought, 'Ah, bless, we'll do it'."

'So cheesy'

Almost 20 years on, Warburtons is the UK's top baker and second most valuable grocery brand after Coca Cola, according to consumer ratings company ACNielsen.

Part of the fifth generation of Warburton family bakers, Jonathan is now chairman of the company.

The company's first nationwide advertisement features his voice and his dog.

This has caused a certain amount of embarrassment for the sixth generation, with contemporaries of his 15-year-old daughter describing the commercial as "so cheesy".

Nonetheless, the commissioning of a nationwide advert is a sign of how far Warburtons has come.

Less than a quarter of a century ago, the company had no bakeries outside Lancashire, and only a few years ago few people in the south of England had heard of it.

Flat cap and whippets

The growth from a Lancashire local outfit to a national brand - ahead of the two other national giants, Hovis and Kingsmill, both owned by large food groups - has been down to a single-minded focus and a well-tested strategy.

Rank Hovis truck at Warburtons
Warburtons: 514.3m
Hovis: 403.1m
Kingsmill: 282.3m
Source: ACNielsen/Checkout

"We have this sort of flat-cap and whippet routine," says Jonathan Warburton, "where we've gone out and said, 'Ooh, don't worry about us, we're just a little Bolton bakery - we're really not going to cause anyone any trouble'."

The first step to getting into a new market is to open a depot where they can heat the bread to keep it fresh.

If the move into the new region is successful then the company builds a bakery there.

The 250m they have invested in doing this over the past six years has taken them to second place in the ACNielsen top 10 grocery brands, with Hovis at number four and Kingsmill lagging in ninth place.

"I'm hoping that ultimately there will be one dominant brand," Jonathan Warburton says.

"It would just be nice if it's ours. Our aim is obviously that - but so is theirs."

Another factor in Warburtons' strategy, Jonathan says, is its reluctance to go for aggressive price promotion - something, he says, his competitors are much more willing to do.

Instead, the firm has managed to persuade supermarkets to pay more for its products three times in three years, as rising wheat and energy prices have pushed up costs.

"When you go and say 'we're putting our prices up', if you've got a robust case you've got to stick to it because if they knock you back once then every time you go they'll say 'come back in a week'".

Warburtons seems to have got away with raising prices because the innovation and popularity of its products mean that the supermarkets have been unable to resist price rises in the way that they have with commodity products such as milk.

In and out

Crates of bread
Bread goes in crates for Tesco and different ones for everybody else

Still, relationships with the big retailers are still sometimes a little sticky.

"You have to accept that at any one time you're in favour with one and you've fallen out with another," Jonathan Warburton says.

"The trick is to make sure you're in favour and falling out in equal amounts."

Looking round his Back o'th' Bank bakery next to the company's head office in Bolton, the importance of supermarkets is easy to see.

The bagged, sliced bread comes off the production line in plastic crates, which are piled up ready for delivery.

All except for the bread going to Tesco, which has to be removed from the standard crates and put into different, Tesco crates.

Mr Warburton says that he was dragged kicking and screaming into using the new crates, but that he now sees their health and safety benefits and wishes other retailers would use them as well.

Incentive to work hard

Jonathan Warburton's father, two uncles and a cousin all retired on the same day in 1988.

Loaves of bread
The slits in these loaves are made by jets of water fired at the dough

Since then, the family firm has been run by Jonathan and his cousins Ross and Brett.

Last year, the company appointed a new managing director, Robert Higginson, who was an appointment from within the company, but not within the family.

Do the chairman's decisions ever give him any problems at family functions?

"Had we not done very well I'm quite sure we'd have had those unspoken things at family gatherings - 'It was all because we didn't let little Johnnie in - he would have really run the business'.

"But it's a pretty good incentive to work hard, I'll tell you."

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