Coca Cola then who? In the UK it’s Warburtons

March 9, 2007


A Nielsen survey ranks Coca Cola as Britain’s best selling grocery brand. It is followed by Warburtons, a rather less well-known fifth-generation family business of bread makers. The firms represent two contrasting stories of built-to-last businesses.

How to grow a perfect English lawn. First you prepare the ground. Then you seed it, treat it, water it, mow it and roll it carefully… For a century or so.

The timescale for creating a certain kind of excellence can be applied to British family firms, among whom Warburtons is now attracting attention. It has moved unobtrusively to the top of the list of best-selling grocery brands in the UK, second only to that mighty purveyor of bubbly drinks, Coca-Cola.

I am not one of the world’s adventurous shoppers. I carry out my supermarket runs on semi-automatic pilot, alerted only when my semi-automatic reach fails to put me in contact with the required item it has been programmed for. At the bread section, I reach for the unfailingly available loaf of Warburton’s (medium sliced, family size). There is something comfortingly familiar in the slightly waxed packaging, and the red white and blue colours (that’s it. They are the Union Jack colours).

Traditional? Maybe. Successful? Definitely. According to Neilsen’s poll for Checkout magazine, it has unobtrusively moved up the rankings to become Britain’s second most successful grocery brand. The two competitive brands, from larger organizations, come in at number four (Hovis) and nine (Kingsmead).

Built to last

Coca Cola and Warburtons have a few things in common. The companies are both obviously built-to-last, to borrow a phrase. Coca Cola can trace its origins to 1884, when John Stith Pemberton invented his Coca-wine, and later the non-alcoholic Coca Cola. George and Thomas Warburton had begun breadmaking a few years earlier.

The similarities pretty much end there. If this were a morality tale, Warburtons would be one of the World’s greatest business empires, and Coca Cola would be a footnote in history, destroyed when the morphine addicted John Stith sold the rights to his company to two differing business groups, while his alcoholic son Charley refused to accept this and continued to manufacture and market a third version of the product.

The Family Firm and the Global Business

The Coca Cola story has been become a business classic, studied and dissected ad nauseam. The fortunes of war, and the business generated from the US forces overseas; the fifty billion servings every day across two hundred countries around the World.

Meanwhile, after George and Thomas, came successive generations of the Warburton family to today’s chairman Jonathon. It has achieved unobtrusive and admirable success as first a local firm, and then through its expansion plans, while remaining utterly dedicated to its one big success factor, bread making.

Is this unusual?

You bet it is. Family businesses largely escaped the notice of business researchers caught up in the romance of giants such as General Motors, Ford, and Coca Cola. Even Harvard Business School, rarely slow to spot a business opportunity, took until the 1980s to offer courses specifically for family businesses.
There is not a great deal of well grounded theory about how family firms work and survive. The few convincing studies suggest that family firms are often badly managed; that any competitive edge comes from the founder, with a distinct possibility that successive generations will fritter way the hard-earned wealth generated by the founder.

This fits with my more anecdotal evidence working on business courses for small-medium enterprises. Founders often brought along their eldest son, and intended successor. In contrast, other founders were vehement in their reluctance to pass ‘their’ company over to someone whom they suspected would ruin it.

So what are Warburtons doing right?

It’s easier to see what they are not doing wrong. They have expanded prudently, rolling out their operations, a region at a time. They did not fail to build a global giant. They haven’t tried. They didn’t copy the marketing strategies of their rivals backed by larger corporate parents. Warburtons may well have had some luck of the genetic dice that has protected them from the inexplicably ghastly family member who would have reliably ruined them.

Hovis has stronger brand recognition though its award winning advertising campaigns that have near iconic status.

Of the recent writers on management, the one closest to offering any insight to the firm’s success seems to be Jim Collins. In Built to Last he outlined how great founders made the prototype for a great firm, not just a great product. In Good to Great, he and his researchers showed the merits of the great product or service within the built-to-last firm. Also he brought the notion of the fifth-level leader. Contrary to the profile of the classical charismatic leader, fifth-level bosses suppress their ego in the interests of their corporations. Which just might help explain why Jonathan Warburton is one of the best things since sliced-bread at Warburtons.