Cranswick plc

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Cranswick plc

Driffield, East Yorkshire Y025 9PF
United Kingdom
Telephone: (+44) 1377 270649
Fax: (+ 44) 1377 275001
Web site: http://www.cranswick.co.uk

Public Company
Incorporated: 1974
Employees: 972
Sales: £157.35 million ($250.5 million) (2000)
Stock Exchanges: London
Ticker Symbol: CWK
NAIC: 311119 Other Animal Food Manufacturing; 112210 Hog and Pig Farming; 311611 Animal (Except Poultry) Slaughtering; 311612 Meat Processed from Carcasses; 311613 Rendering and Meat Byproduct Processing; 311612 Meat Processed from Carcasses

England’s Cranswick plc has transformed itself from a regional pork and pig feed producer into a diversified company operating in three core yet related markets: agribusiness, food products, and pet and pet food products. The company’s agribusiness company is grouped around its historical pig marketing and pig feed operations, under the Cranswick Mill subsidiary. The company manufactures pig feed at its original Driffield site in East Yorkshire, and at its Wellingore plant, in Lincolnshire, acquired in March 2000. The acquisition has helped boost the company’s production to 250,000 tons per year, while extending its range into the important pig rearing region of Lincolnshire. Wellingore also has enabled the company to extend its feed production to poultry feed. Cranswick Mill oversees Cranswick’s pig marketing operations, buying pigs from pork farmers—many of whom are customers for the company’s feed products—in and beyond its home regions for sale to pork products producers, including Cranswick itself. The company manufactures pork products, including sausages, hams, and other meats, under its Cranswick Country Foods subsidiary. Cranswick Country Foods oversees the vertical integration of Cranswick’s pork, feed, and food operations. The company’s food products, manufactured in five production plants, include a 15 percent share of the U.K. market for premium quality sausages, under the Cranswick, Cranswick Gourmet, George Lazenby (which is also the exclusive licensee for the brand Duchy Original Sausages, produced from the Prince of Wales pig herd), and other company-owned and private-label brands. The company’s food division has overtaken its pig feed division in turnover, accounting for two-thirds of the company’s sales. Cranswick’s third area of operations is linked to its core activities: the company’s Tropical Marine Centre is Europe’s largest importer, breeder, and distributor of tropical fish and invertebrates, as well as a leading manufacturer of fish foods. The Pet division’s other subsidiaries, George Buckton and Magnet, produce bird seed. Cranswick is led by chairman and cofounder Jim Bloom, and by CEO Martin Davey, who has helped lead the company’s diversification since the late 1980s.

Pig Feed to Pig Farmer in the 1970s

Cranswick was founded in 1974 by East Yorkshire farmers Jim Bloom, Mike Field, and others to manufacture pig feed from their farms’ production. Into the late 1970s, the company began to rear and market pigs as well. In 1980, Cranswick extended its operations again, now entering the grain trading market. An outbreak of the highly contagious foot-and-mouth disease in the early 1980s devastated the United Kingdom’s livestock population, as animals were forced to be destroyed. The resulting chaos in Cranswick’s industry, and the industry’s cyclical nature even in the best of times, encouraged the company to seek to diversify its operations by the late 1980s.

Martin Davey, who had joined the company in 1985, was named the company’s CEO in 1988 and was instrumental in transforming Cranswick into a small but growing—and profitable—diversified company. In 1988, Cranswick took its first step beyond its agribusiness core, which operated under the Cranswick Mill name, when it bought a small pork butchery. The purchase enabled the company to extend its operations from pig rearing and pig feed production into the processing of pork cuts for the United Kingdom’s wholesale and retail markets.

In the early 1990s, Cranswick, which went public with a listing on the London Stock Exchange, extended its growth strategy to boost its food production activities. The company remained closed to its core pork-based operations, however. In 1992, Cranswick added new food processing activities with the acquisition of FT Sutton & Son (Rossendale) Limited, a ham and other processed pork products manufacturer that was to form the basis of the company’s Cranswick Country Foods subsidiary. Other acquisitions made in the 1990s allowed the company to extend into packaged retail and branded name products, while remaining close to its focus on fresh and processed pork products. The company also launched its own development team to invent new products, to be sold under the Cranswick name, but also under private labels for such grocery chains as Sainsbury.

Diversified Group for the 21st Century

Yet Cranswick’s feed interests led it to diversify into new areas of operation. In 1993, the company acquired George Buckton & Sons Limited. That company, which had been founded in the early 19th century, originally had operated as a drysaltery business until the mid-20th century. Acquired by Harry Henderson, who had seen his Hull, Yorkshire-based shipping business destroyed in World War I, Buckton became one of the United Kingdom’s leading producers of bird seed, particularly well known for its corn-based feed created especially for the pigeon racing circuit. The Buckton acquisition seemed a natural extension of Cranswick’s existing feed production business. It also led the company into exploring other areas of the market for pets and pet foods.

The company’s new interest in the pet market led it to acquire Tropical Marine Centre, the leading supplier of live tropical fish and invertebrates to the European market. Founded in 1970 by Richard Sankey, Tropical Marine Centre also had developed a manufacturing arm for the production of aquariumrelated equipment, such as UV cleansing and sterilizing equipment. The company also produced fish foods and, in the mid-1990s, began to develop the first successful tropical fish hatcheries. The Tropical Marine Centre acquisition was completed in 1995. A few months later, at the beginning of 1996, Cranswick boosted its pet division with the purchase of Magnet, adding that company’s production of bird food and foods for small animals. Magnet was subsequently placed under the company’s George Buckton subsidiary. These acquisitions helped boost the company’s revenues to £79 million by the end of 1995. They also encouraged the company to dispose of its grain trading business in 1996.

In the late 1990s, Cranswick turned to boosting its pork products activities. The company found new markets for a number of pork products that were less popular in its core U.K. markets. As such, in 1998, the company began seeing growing sales to the Chinese market for pigs’ feet, as well as sales of pork bellies to South Korea and pig tails to the West Indies. In its home market, meanwhile, Cranswick had been building a successful range of gourmet sausages and ham under the Cranswick Country Foods and other brands. These were proving so successful, not only in the United Kingdom, but also in Germany, where the company established its first foreign subsidiary, that its specialty food products now represented its fastest growing segment of operations. The company was expanding its production capacity, adding a new production line in its main pig feed facility.

At the end of 1998, Cranswick boosted its gourmet sausage operations with the acquisition of Cambury Plc, which traded under the retail brand name of Mr. Lazenby. Founded by Richard Lazenby in 1982, the Teeside-based company also held the exclusive license to manufacture the Duchy Original Sausages brand produced from the pig stock of the Prince of Wales. At a cost of £3.5 million, the Mr. Lazenby brand helped fill out Cranswick’s strong position in the high-end market.

Cranswick remained relatively unharmed by the outbreak of mad cow disease in the United Kingdom, which had come to full steam by the end of the 1990s, but remained confined to the country’s beef industry. Indeed, Cranswick was even to profit somewhat by the growing consumer demand for the type of high-end meat products niches the company had carefully chosen, including the development of its own organic meats and meat products. The company continued to add to its specialty operations in 1999, buying a 33 percent share of Gourmet Sausage Co. Founded only in 1995, the young company was renamed Cranswick Gourmet Sausage Co. after Cranswick boosted its shareholding in 2000 to 67 percent.

Another important acquisition for the company came in September 1999 when Cranswick paid nearly £15 million to acquire Pethick & Co. Founded by meat industry veteran David Pethick and a number of friends in 1989, Pethick & Co., which produced delicatessen meats, particularly hams, for such large-scale customers as the ASDA supermarket chain, helped round out Cranswick’s range of processed meat production. By then, the company’s food division had outpaced its original feed production, representing some two-thirds of Cranswick’s annual sales.

Company Perspectives:

The aim of the development strategy has been to focus on specialist, but related areas, in the pet, agribusiness and food sectors, identification of suitable acquisitions with strong management teams and investment in those businesses.

Cranswick’s successful transformation into a diversified, yet unified feed-food-pet group made it a favorite among stock market analysts. The company’s consistent gains in turnover were matched by strong profits. While still modestly sized, Cranswick’s diversified interests helped it ride out the Europe-wide slump in pork prices that caused a number of its closest competitors to go out of business at the end of the decade. Meanwhile, its pet division was seeing strong gains, more than doubling its revenues in the second half of the 1990s. Tropical Marine Centre also was making history with its industry-leading hatchery program—the company had recorded a number of notable successes, including the first successful breeding of fire shrimps (Lysmata debelius) in 1997, then pipefishes (Doryrhamphus multi-annulatus) in 1998, and cleaner shrimps (Lysmata amboinensis) in 1999.

Cranswick continued to grow into the new century. In 2000, the company acquired a second feed production facility, Wellingore, in nearby Lincolnshire, which not only extended the company’s pig marketing and feed production capacity into that important pig farming region, but also added Wellingore’s poultry feed production to Cranswick’s growing operations. At the beginning of 2001, Cranswick prepared to continue its growth, announcing its intention to become sole owner of Cranswick Gourmet Sausage Co. during the year. Yet the company faced new troubles at the beginning of 2001 as the country was once again devastated by a new outbreak of foot-and-mouth disease. Measures imposed in an effort to contain the spread of the disease effectively shut down major portions of the industry, as well as saw a new destruction of the company’s livestock. Nevertheless, Cranswick’s strong diversification throughout the previous decade helped to buffer the company’s losses, particularly as its U.K. consumer base turned more and more toward the high-end organic and gourmet specialties that had become core Cranswick niches.

Principal Subsidiaries

Cambury Limited; Cranswick Mill Limited; Cranswick Country Foods Plc; Cranswick Deutschland; Cranswick Gourmet Sausage Company Limited (67%); George Buckton & Sons Limited; Magnet; Mr. Lazenby’s; Pethick & Co. Ltd.; Tropical Marine Centre Limited.

Principal Competitors

Hazlewood Foods Plc; I£Inc; Moksel AG; Northern Foods Plc; Smithfield Foods Inc.; Uniq plc.

Key Dates:

1970:: Richard Sankey founds Tropical Marine Centre.
1974:: Jim Bloom, Mike Field, and other farmers form pig feed manufacturing company Cranswick; Cranswick eventually extends operations to include pig rearing and marketing.
1980:: Company begins grain trading business.
1982:: Richard Lazenby founds Cambury Plc.
1988:: Company adopts diversification strategy to counteract market cycles; acquires pork butchery.
1989:: Pethick & Co. is founded.
1992:: Company acquires FT Sutton & Son (Rossendale) Ltd.
1993:: Company acquires George Buckton & Sons Ltd.
1995:: Company acquires Tropical Marine Centre; Gourmet Sausage Co. begins operations.
1996:: Company exits grain trading business.
1998:: Company acquires Cambury/Mr. Lazenby’s.
1999:: Company acquires Pethick & Co. Ltd; acquires one-third of Gourmet Sausage Co.
2000:: Company purchases Wellingore (Lincolnshire) feed manufacturing plant; increases share of Gourmet Sausage Co. (renamed Cranswick Gourmet Sausage Co.) to 67 percent.
2001>:: Company plans to acquire full control of Cranswick Gourmet Sausage Co.