Meat firm Tulip targets the number-one spot in UK

• New approach 
• Chilled ready meals growth
• Skilled workers

When companies in market-leading positions start to lose their way, it’s often the fault of the same group of people – those at the top. That at least, is the view of Steve Francis, turnaround specialist and recently appointed chief executive of Tulip, the UK subsidiary of Europe’s largest pork producer, Danish Crown Group.

“More often than not, those human failings are very similar. The management loses focus on what the customer wants, and the values of the company start to break down,” he explains.

Few would dare disagree with the man who has revived a number of underperforming businesses during his career – including, most notably, Dutch pork producer Vion, and most recently, print services provider Danwood.

Now, together with Jais Valeur – the former Arla boss who took on the top job at Danish Crown in 2015 – Francis has hatched a plan to make the business more in-tune with the needs of both customers and consumers. And, in doing so, reverse declining sales and help return Tulip to its former glory.

Both men took time out to speak to Food Manufacture at Tulip’s head office in Warwick, a site Francis suggests is a reflection of the “centralising mode” the company had got into.

“It’s a very nice office, but it’s a little symbolic of how the company was – focused on building big central marketing and innovation teams,” he says.

Following his arrival, Tulip’s 16 UK sites were reorganised into four divisions – Tulip Fresh, Tulip Added Value, Tulip Agriculture and Dalehead Foods.

Francis says this “rebuild” is the first step in helping the company – which lists Danepak, Cherry Tree Farm and Adams among its brands – reconnect with its customer base.

“When we arrived, both Jais and I spent time talking to customers, and we both got consistent messages – be more responsive and more innovative,” he explains.

New approach (Back to top)

“They also want to develop long-term strategic partnerships, where we operate in our joint best interest. That was a mode of operation we had fallen out of.”

Tulip’s struggles were symptomatic of wider problems at Danish Crown, which Valeur says had placed too much focus on the farmer and abattoir, at the expense of the customer and the consumer.

“The new strategy is about rebalancing that, and placing more focus on process and the value-added side,” he adds.

The new approach includes closer working ties between Tulip and its parent, and Valeur maintains that the UK – despite Brexit – is to remain a core market for the group, along with Denmark, Sweden and Poland.

It’s also a market where primary pork sales are in decline. According to the most recent Kantar Worldpanel data, volumes of primary pork sold by UK retailers fell 4% in the 52 weeks to March 28, while total retail spend fell by 8%. Bacon retail spend, meanwhile, fell 5% for the year.

The news isn’t all bad, however. Retail sales of pork chilled ready meals grew by 4% in volume and 8% in price, and there were positive figures for pre-packed sausage rolls and pork pies.

The figures reflect what Francis says is the wider ongoing changes in consumer shopping habits, namely the growth in food-to-go and pre-prepared meals. “It’s also important to remember that bacon is in strong growth in non-retail,” he adds.

Chilled ready meals growth (Back to top)

To capitalise on this trend, Francis is seeking customers that want “higher quality materials”, namely pork that is outdoor-bred and British.

“Our core partners at the moment are The Co-op, Waitrose and Marks & Spencer, and they have all moved to 100% British pork,” he explains.

“But we are also targeting the likes of Greencore and McDonald’s – companies that are operating in the right markets, and transitioning more and more to British meat. As the number-one pig farmer in the UK, we’re well-placed to meet that demand.”

Francis says Dalehead’s relationship with Waitrose is an example of mutually beneficial collaboration. The Tulip division operates five sites in the south and east of England, and supplies Waitrose with more than 400 fresh and value-added pork and lamb products.

“Walk into those factories, and you feel like you are in a Waitrose – and that’s not just because the colouring is the same,” Francis says.

“The long-term contract we have with them is founded on shared values, and we continually strive to understand where they want to take their business, and act as an influential partner.”

While the value-added approach is a cause for optimism, there are clear challenges ahead for Tulip, Danish Crown and the meat sector in general. Brexit’s potential impact on farm subsidies, labour supply and import prices is a “big concern” for Valeur, but he feels the group is well-placed to ride out the storm.

Skilled workers (Back to top)

“If I was simply an exporter to the UK, I don’t think I could sleep. But given that we are so well-positioned, with 16 factories and a 7,000-strong workforce in the UK, I’m quietly confident about the situation.”

He has no plans to reduce either the number of UK sites or workers, but claims access to skilled labour, “whether from Britain or anywhere else” is critically important.

Tulip is certainly doing its part, after reportedly hiring 48 apprentices in 2016. Its apprenticeship numbers for this year are expected soon.

Another likely impact of Brexit, coupled with the new National Living Wage, is that labour costs will go up, Valeur assumes. This, he believes, will result in the need for more automation.

“Our UK capital expenditure is about £35M every year, and you can get a lot of automation for that,” he says. “But it’s important to remember that butchery is still a craft, and when you automate, the flexibility goes down. So it’s a continual cost verses flexibility dilemma – and it’s about getting the balance right.”

However the future pans out, Valeur insists his company retains a “strong commitment” to the UK market, and is focused on returning Tulip to the number one position.

“The process of finding our way back to our roots is well underway. If we stay competitive, and stay close to our consumer and customer, I think we’re going to be ok.”