Press Articles Loaned by Neville Freeman, CE 1974-7
Neville Freeman…
… was appointed Chief Executive in April 1974 after being with the firm for about a year. Under his management the Elmswell factory enjoyed a remarkable turnaround, as reflected in the published articles reproduced here. He moved on to other pastures in 1977. He returned to Elmswell on retirement in 2010, and kindly loaned me these papers and photographs.
Meat, September 1974
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Meat, May 1975
St Edmunds Revisited
How Neville Freeman is turning Britain’s oldest bacon factory from £500,000 loss to profitability
New management team at St. Edmunds Bacon Factory: Left to Right: Keith Yeates, Work Study; David Neale, procurement; Nevila Freeman; Mark Moorfoot, Accounts; Arthur Humphrey, Sales; John Snell, Accounts.
THE PROBLEM with most case histories presented for study and solution at management colleges is, to state the obvious, that they are not real. Even those based on real life companies facing problems that once really existed, display an unhappy element of unreality. Solving such problems in association with five or six fellow students whom you have not met before and are unlikely to work with again can be fun, stimulating and to some extent satisfying. But it is not at all the same as the everyday battle to keep your own business afloat. So Meat was fascinated to return the other day to a real life company whose problems are to some extent typical of those besetting many other producers at this time. And we are very much indebted to their chief executive, Neville Freeman, for talking frankly about the way in which his company is facing up to the present, and planning for the future.
Problems
When Meat visited St Edmunds Bacon Factory at Elmswell, Suffolk last year it was obvious that things were not entirely as they should be. In the two weeks between our first and second visits, managing director Ken Crook resigned, and marketing director Neville Freeman, who had only been with the company for 12 months, suddenly found himself director and chief executive of a company with some £5 million turnover and a negative profit ratio.
Our conclusion at the time (Meat, September, 1974) was that Neville had a formidable problem on his hands. For years, St Edmunds had existed primarily to maximise and stabilise prices paid to its pig farming owners. This had resulted in a production oriented company making too small and spasmodic a profit to keep in step with its competitors. Back in the early part of 1974 there had in fact been a move to transfer the company into private commercial ownership, but negotiations proved abortive. Then, in April, came the news that St Edmunds had been taken over by the giant Eastern Counties Farmers group, whose profitability record in recent years had been considerably improved by the expertise of its driving force, Tom Thomas. So what now would happen at St Edmunds? Would its problems prove insoluble? Or would Freeman and Thomas be able to make an impact?
Uneconomic
“By the end of last year,” admitted Neville, “we were losing money at the rate of half a million pounds on a turn- over of £5.2 millions. We had to get our skates on.” Much of the loss was coming from the operation of an uneconomic distribution system. And with increasing fuel costs and inflation generally, it was likely to get worse. “At the time we were committed to daily deliveries of a highly perishable product. An analysis indicated that 70 per cent of our business was coming from 6 per cent of drops. We also found that it was costing us £1.50 to take, process and deliver an order, so we decided not to drop anything less than £10. “Chopping costs this way meant reducing our van sales force by two- thirds, but removing the part of the operation committing us to daily deliveries is enabling us to save about £120,000 a year in distribution costs.” One of the casualties of the changeover was school meal contracts, though this was perhaps no great loss. St Edmunds had been making 130 school deliveries a day, some as low as 2lb of sausages per drop. Much more important was the impact this had on production. Bacon factories are usually dependent upon pie and sausage making to use up their trimmings. Presumably then, St Edmunds decided to change over from fresh pies to frozen, thereby enabling themselves to make weekly rather than daily deliveries? “No,” said Neville, “we have stopped making pies altogether. Considering the margins on frozen pies relative to the amount of capital we would have had to spend on a proper operation, it wasn’t on. Margins are low on sales to freezer centres and competition is tight. “I had to see every large customer to say that in four weeks there would be no more pies. Fortunately they understood the position and we have not lost one major customer as a result. Undoubtedly we have lost a few customers, but the turnover we had lost through cutting out pies andsausages was replaced in about five weeks from increased sales of bulk and prepacked bacon, cooked meats, pork including prepacked which we weren’t doing before, and sausages and sausage meat.” Some fresh sausages are still being produced but only for bulk delivery. They are also producing frozen sausages, but as with frozen pies, find the margins on these to be less than encouraging. “We would rather sell a good quality product in relatively small quantities than a poor product in enormous volume,” says Neville. On the other hand much of the turnover lost through cutting out the smaller deliveries has been made up from a subsequent increase in demand for sausages and sausage meat from a leading multiple.
Redundancies
Inevitably, curtailing of the distribution facilities and closure of the pie making plant meant a substantial reduction in the workforce – no small matter when you are the only major employer for miles around. Where, only 12 months before, St Edmunds had been faced with constant recruitment problems, they now had to reduce thejr workforce from 478 to 300. And in doing so they managed to secure the full co-operation of the unions involved. “In one way, it pulled everyone together,” says Neville. “We acquainted the unions and works committee with the financial position last year and have kept them informed every four weeks since then.”
Stopping the buck
Though the redundancies spread right through staff and factory floor, a crucial factor in Neville’s strategy has been to reorganise the management and recruit a new executive team. David Neale, ex-Ministry of Agriculture, has taken charge of all buying of live and deadweight pigs. Having also managed a pig unit, David knows both sides of the business. Arthur Humphrey, ex-Heinz, as sales manager, maintains day-to-day contact with the multiples, although Neville Freeman is still very much involved in negotiations. Mark Moorfoot, ex-Spillers-French, has taken charge of accounting and administration. Phillip Richards, ex-Sainsbury’s and Yorkshire Farmers, has just taken over as Works Manager. George Sanger, ex-Lawsons of Dyce, as Technical manager, becomes responsible for new product development. For the time being, Neville continues to head Marketing. “In this business we have to operate from week to week. Now, when we get the weekly accounts document, the five people who can make an impact on it – David, Arthur, Mark, Phillip and I can sit down together. These are the people with whom our profit or loss lies. They can’t say ‘someone over my head is responsible’. The buck stops.”
Profit-oriented
“We stand a very good chance of breaking even this year, as long as the economic situation doesn’t get any worse,” says Neville. “Everyone is profit oriented here now. It’s not a question of business at any price, it’s selling at the right margin.” Nevertheless, a company of St Edmund’s size needs turnover. Though they quickly made up the £30,000 a week deficit from the elimination of pies and small drops of sausages, bringing them back to the £100,000 a week level (and at a considerably reduced loss), they are looking for £6.4 millions in the current year. This represents an average of roughly f 123,000 a week, and it has to be achieved without the aid of any appreciable capital expenditure.
Cutting budgets
Undaunted, Neville expects to reach his targets largely through the enthusiasm of his new management team, and the philosophy – at least in the current year – of making every penny count. Departmental budgets are being rigorously examined by the manager concerned in co-operation with an accountant and work study specialist. Each manager has to ask himself why he needs a particular item, how much profit it will bring and over what period of time in terms of extra output or savings. For example, if delivery vehicles were previously changed at 80,000 miles, they now have to ask themselves how much extra maintenance cost would be involved in keeping the vehicle for another year. Although this may seem an elementary exercise, it is surprising how seldom these simple criteria are employed in the production of budgets. Managers usually find it more expedient to add a percentage to last year’s figures for inflation plus a little extra – depending on what they think they can get away with – for expansion. Elementary it may be, but St Edmunds are finding that the system of questioning every item of expenditure is already producing results. Managers are deciding voluntarily to cut back their own budgets.
Cooked meats
Cost control alone, however, will not of itself guarantee profitability. By far the highest cost item in a bacon factory is the meat itself. St Edmunds are tackling this in several ways. First priority has been to put in a system to control yields and throughputs to make sure that they are not losing meat along the way. A spin-off from this rethink has been the reduction of massaging times on ham by 50 per cent. Originally – possibly at the equipment manufacturers’ suggestion – they had been using a 24-hour massaging cycle, agitating the meat for 45 minutes in each hour, but they were not entirely satisfied with the texture of the finished product. Now after examining techniques at a continental production unit, they have reduced massaging time to 12 hours, maintaining yields and finding that the finished product holds together better.
Another inexpensive innovation has been to build a cabinet that enables them to load and secure ham pots under vacuum. This minimises the risk of elongated holes in. the finished product. (Quite a bright idea this for ham producers who have not gone over to complete vacuum forming presses.)
Tighter specifications
At the same time, St Edmunds are increasing throughput of Wiltshire cured hams which they used to produce and are now returning to following development of an improved cure which gives better flavour, conformity and texture. Throughput of pigs has been stepped up from 1,500 to 2,000 a week, with much tighter specifications. Where, little more than a year ago. the weight range of pigs coming into the factory was from 7½ to 10½ score (reduced to 7½ to 9½ last April), the new 1975 contracts are from 7½ to 9 score, with a target of 8 to 8¼ score. “We are not in a business that needs a lot of fat trimmings,” says David Neal. “We’d rather deal in high value products than low-margin by- product value. Our retail trade wants a leg of 18 lb maximum against some we were getting at 24 lb.”
So the move is away from heavy hogs to quality cutters. This means that farmers will have to pay more attention to genetics, feeding and weighing, but David believes their new top probe pig with 18 mm maximum back fat is probably more economical to produce anyway, because the producer will not incur the excessive feed costs that accompany the deposition of fat. “At the same time production yields in the factory will improve and in the long term this should bring better margins all along the line,” David maintains.
Trimmings
With the decision to concentrate on bacon and cooked meats, the requirement for trimmings, previously used for sausages and pies has become very modest. Tighter pig specifications will eventually reduce the volume of unwanted trimmings, but what happens to the remainder? “Bacon trimmings are being sold to a meat paste manufacturer,” said Neville, “and fresh meat goes in bulk to pie manufacturers. And, after your article last September, I had a call from an old colleague which resulted in his taking up to 1,500 pigs worth of offal a week for his supermarkets. “We are also developing new products to use up trimmings. George Sanger, our technical manager, has just got corned pork off the ground. Retailers can sell this at half the price of corned beef.” Although their main aim is obviously to increasd turnover on existing products, particularly cooked meats and prepacked pork and bacon, St Edmunds are obviously very keen to develop new lines, both in conjunction with large multiples and under their own label, especiaily where this helps them make better use of trimmings. One relatively new line that caught our eye was ‘fresh pork escalopes’, which if they taste as good as they look, could prove a winner.
St Edmunds, then, having passed through a pretty traumatic year, now look set for a much brighter future. Whatever happens on the economic front, their eventual progress seems assured. But in the long term one wonders whether ownership and operation of a meat processing and marketing plant really fits in with ECF plans. Or will ECF eventually decide to sell St Edmunds to a commercial undertaking?
Time will tell. Super Marketing, July 25, 1975
Croquette game
Farm Kitchen spreads out
DELIVERIES of Farm Kitchen Foods’ new frozen croquettes range began this week and it is fully expected that a further range of pork sausages, prepacked bacon, frozen chops and a new “breakfast fry” will follow.
The new croquettes are available in four flavours: savoury pork; chicken and ham; ham and egg; and liver and bacon. They all contain a minimum of 40% meat and are coated in bread- crumbs before being flash cooked.
Neville Freeman, managing director, describes the new croquettes as a significant shift of emphasis. “At the beginning of last year our operations were severely rationalised for financial reasons and all pies and similar fresh products previously marketed were axed; now with the help of a blast freezer and our ovm 180,000 cu ft cold store we are embarking on a programme of planned expansion.”
Farm Kitchen Foods is the brand name of St Edmunds Bacon Factory, which is owned by Eastern Counties Farmers, a farmer-owned co-operative established in 1916.
Meat, September 1975
FARM KITCHEN FOODS of Suffolk have launched a range of frozen croquettes specially formulated for the frozen food market. The croquettes are available in four flavours – savoury pork, chicken and ham, ham and egg, and liver and bacon. The range will also be extended to include frozen pork sausages, prepacked bacon, frozen chops, a new “breakfast fry” and other pork based products.
Neville Freeman, managing director of the company, sees this as a significant move. “At the beginning of last year, our operations were severely rationalised for financial reasons and all pies and similar fresh products previously marketed were axed. Now, with the introduction of a blast freezer and our own 180,000 cu. ft. cold store, we are embarking on a programme of planned expansion. Frozen foods are an important development area for us, particularly products that are complementary to our main processing operations.”
“We took over a loss situation and a complete reversal of the trend was necessary to just survive”
TRADE TRENDS
St Edmunds Bacon Co Elmswell
When Eastern Counties Farmers Cooperative took over the ailing St. Edmunds Bacon Company at Elmswell in April 1974, it very soon became clear that drastic action was necessary if they were to stay in business.
New Management
A complete change of management took place in the Autumn of ’74 and Neville Freeman was made Chief Executive. ln early 1975 he was joined by Philip Richards, the present Operations Director, and Mark Moorfoot who is now Commercial Director.
Heavy Losses Turned lnto Healthy Profits
Losses of around half a million pounds were recorded for the company’s financial year ’74-’75, and not only has Neville Freeman, (with the help of his able team of managers and the full cooperation of his total workforce), ensured St. Edmunds of survival, but also he has turned those abysmal losses into a £300,000 profit for the year ending December 1976.
Wide Experience in Business
How has this been achieved? Simply by taking a long, cool, objective look at St. Edmunds and then making the necessary, sometimes difficult, changes.
Neville Freeman and Philip Richards are perhaps better equipped than most managers in the meat industry to be objective. Both their careers have given them experience in industries other than meat, which enabled them to define what was required in business terms. They are not hide-bound by the idea that this trade is different, and that normal procedures, applied throughout industry generally, will not work! As far as they are concerned they have a raw material, the pig – which has to be turned into a profitable finished product – i.e. bacon, cooked meats or chops. An excellent middle management at Elmswell, well and truly informed about meat, turns their plans into reality.
Changing Fortunes Due to Several Factors
The ‘about-turn’ at Elmswell cannot be attributed to one specific reason, many factors were responsible.
Firstly it was decided to concentrate on pre-packed bacon, cooked meats, and ‘tailored’ pork; dropping pie production completely and producing less but better quality sausages.
Secondly, the labour-force which stood at about 500 in 1974 was cut back the following year to 300. A difficult but necessary step if jobs for those remaining were to be secured.
Thirdly, they looked at both their customers and their suppliers.
Now, when buying pigs, St. Edmunds have the advantage of their relationship with the ECF Cooperative. Seventeen producers, all members of the ECF, have formed a Syndicate supplying Elmswell with over 60% of their pigs. One producer alone sends 500 pigs per week, and that’s out of a total throughput of 2600 per week. Likewise their customers are now fewer but they are mainly bulk buyers like Marks and Spencer, Waitrose and Safeway. 70% of St. Edmunds trade is with multiples, at the quality end of the market. “With fewer customers, less time is spent on talk alrd discussion”, said Philip Richards, “and with 17 producers giving us 60% of our pigs, it is possible to all get round a table and decide on policies for the future”. Finally at Elmswell, they became mechanised, spending, since 1975, around £250,000 on the modern equipment necessary if they were to compete with other producers in their field.
Yield Improvement a Priority
“Machinery must be justified in terms of money in order to get the board’s agreement” said Neville Freeman. Therefore yield improvement was one of the major priorities when the company embarked on the purphase of new equipment. Here Townsend came up trumps. Their first Townsend Derinder was quickly followed by a second and the 39 Cleaver caused such an increased demand for the products cut on it, (due to improved presentation), that the larger model, the 81 Cleaver was bought 3 weeks later. “We chose Townsend because they are yield-orientated” said Philip Richards. “They are not just selling equipment, they are solving problems. The first Derinder we bought paid for itself in 10 days in yield improvement. Anyway it’s the only machine we know of, that will derind backs without tearing the eye muscle. On top of this production increased. When we boned out and removed the rind by hand it took 3.17 minutes per back, now, with the machine derinding, it takes 2.49 minutes”.
Thumbs Up For Townsend’s Derinders
They have 3 Derinders at Elmswell, 2 of which are Townsend. Anyone who operates the Derinders will tell you the yield from the Townsend machine is far greater. Dick Piggott, Manager, Fresh Pork & Pork Cutting, had this to say:- “From the Townsend machine it is complete rind, from the other it’s fat and rind, simply because the Townsend Derinder does it’s job that much better”. Apart from the yield improvement the job is deskilled which obviates the necessity to employ more butchers as production increases. Also, as Philip Richards pointed out, “As butchers get older they quite naturally slow down and working on a fast deboning line can be a strain for them; even dangerous if they try to keep up with younger men. They can now be used on the less skilful tasks like derinding”. In business terms Neville Freeman summed up like this: “We purchase a very high quality raw material. Bearing this in mind we can’t afford to remove rind and fat – only rind. Hand operation is much less su re of that”.
One Cleaver – Then Two
The 39 Cleaver was bought initially to cut pork chops. St. Edmunds had decided to equip a new department for fresh pork in October 1976, with the object of marketing what they call ‘tailored pork’. This includes retail packs of chops, escalopes, leg and shoulder steaks, as well as family joints of boned shoulder or leg stuffed with sage and onion. The small Cleaver improved the acceptability of the product so much that the increase in volume of sales overtook its production capacity and within 3 weeks a second Cleaver, the larger model 81, was bought.
Now the model 81 is incorporated in the pork cutting line producing pork chops, escalopes apd steaks, whilst the 39 is involved with bacon production cutting gammon steaks and the relatively new and very successful bacon chop. “The Cleaver”, says Neville Freeman, “enables us to provide a product that is acceptable to our very discerning customers. This in turn creates an increase in demand for that same product and happily the Cleaver then copes with the resulting increase in our production “. Before the pork cutting room was re-equipped the chops, steaks and escalopes were cut on a bandsaw. “This produced a lot of bone dust”, said Dick Piggott, “and was much, much slower producing an inferior product. Now we run at the rate of 180 slices per minute. With the bandsaw we were lucky if we got 60″.
Percentage Savings
Philip Richards, who has a maths degree specialising in statistics, is the man to talk to about percentage savings and yield improvements. He will tell you that the Cleaver, merely by cutting out bone dust, gives a 2% saving on yield, and that the Derinder used on backs at Elmswell saves them up to 1.36 lbs per back, due to it’s accurate separation of rind from fat. Apart from this, he is also very enthusiastic about the Cleaver’s speed of operation and the improvement it makes on ” presentation. “The bacon line was always a bottleneck. Now with the 39 Cleaver, operated by a female, it runs smoothly producing gammon steaks at the rate of 12,000lbs per week as well as 6,000lbs of bacon chops. It runs from 7.30 in the morning until 10 o’clock at night, effortlessly”.
5 Year Plan
St. Edmunds plan to spend a lot of money during the five years beginning 1976 on expansion and improvements to premises and machinery. A £1.6 million project (1976 prices) is going ahead. As a result their whole image as a company has changed. They intend to become leaders in meat marketing, not only in this country, but also in Europe. Initially in pork, but in the near future ‘tailored’ lamb is a distinct probability. St. Edmunds hope to build up the same relationship with lamb producing members of the ECF as they have done with the pig farmers. As tar as long-term planning goes beef is also under consideration. Aiming For European Market improvements to the lairage and abattoir to bring them up to EEC standards are underway and they are developing continental products with a view to going into Europe in 1979, with particular emphasis on Germany which is a country that consumes a great deal of pork. Geographically placed as they are, St. Edmunds will find it quicker to export to Europe than to transport to Newcastle.
Automatic Rail For Abattoir
At the moment the pigs are pushed manually along the rail in the abattoir and therefore the Best & Donovan Hog Splitter supplied by Townsend is not able to demonstrate it’s speed of operation to the full extent. However, once the new automatic rail is completed, (it is now being installed), the rate of pigs per hour should rise from 90 to anything from 120-150 and the Best & Donovan will cope easily.
Another 1000 Pigs Per Week By Next Year
2600 pigs pass through the Elmswell factory per week at present compared with 1400 a year ago, but next year 3500 are forecast. This should boost their turnover accordingly which last year reached £7.5 million. £10-11 million is hoped for and with all the improvements already completed, not to mention the planned ones, there seems no reason why this should not happen.
[Cleaver] [Cleaver] [Cleaver] [Cleaver] Click on a picture to enlarge
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MEAT, JANUARY, 1977
St Edmunds move into profit
John Spence
QUITE THE BEST piece of news we received in December was that St Edmunds Bacon Factory at Elmswell has moved firmly into profitability. Two years ago (MEAT Sept 1974, page 21) they were losing money at a prodigious rate, when Neville Freeman was appointed Chief Executive and Director. A few months later (MEAT May 1975, page 23) it had become clear that their losses had been running at the rate of half a million pounds a year on a turnover at that time of £5.2 millions.
Drastic action, including a reduction in the workforce from 478 to 300, cutting out their school meals contracts, closing their pie making plant and van sales service, eventually resulted in a reduced loss of £160,000 on a turnover of £5.7 millions in 1975. In true terms, taking inflation .into account, this turnover was really much lower than in the previous year.
Turnaround
By comparison, then, their net profit, after tax, of around £250,000 on a turnover of £7½ millions up to the end of December, 1976 is little short of miraculous. Though part of the increase is obviously due to inflation, there can be no doubt that it also represents a significant increase in volume. Pig kill is up from an average of around 1700 a week in 1975 to around 2000 in 1976 and they are also buying in meat. “No one thing has turned the business round”, says Neville Freeman. “It is due to a combination of factors. We started with a situation where we decided to do only those things we could do well, which meant cutting out the peripherals. We decided to concentrate on bacon, pre-packed bacon, cooked meats and tailored pork; cutting out pies, and croquettes and reducing our sausage production from 80,000 lb to 15,000 lb a week. We also reduced our number of vans from 32 to 12. The bulk of our business is now done through bulk deliveries rather than van sales. This clarified in our minds the task we had to do – which was selling enough in those remaining areas at prices that would show us a profit.
“We set about it by increasing the amount of business that we were doing with existing large bulk drop customers, mainly ‘own-label’ multiples like Marks & Spencers and Safeway. We also started doing business with Waitrose and Wallis Supermarkets and started packing for other major manufacturers – one of whom provided us with equipment to operate on his behalf.
Thrown out computer
“A major factor in the success of the operation has been the appointment of key executives, particularly Philip Richards (ex-Sainsbury and Yorkshire Farmers) on production and Mark Moorfoot (ex-Spillers-French) on finance and administration. Philip provided us with the ability to plan constructively in a production situation, but also, because he’s intelligent and bright, to contribute to overall policy in the company. Mark’s first job was to sort out and provide the information I required here to make sensible decisions. We had a lot of information floating about here before, but not in a format that enabled decisions to be based on it. He also slung out the computer and replaced it with people. lt was useless and should never have been bought. Getting rid of our computer has saved us money and given us better informatron. It’s far more efficient to do the job manually.”
Cash flow
Improved financial information has also led to a substantial improvement in their cash-flow position. Their bank overdraft has been as high as £340,000 a week; now it touches as low as £80,000, largely, says Neville, due to the understanding of the customers they deal with. “Until it became apparent from the figures”, he told us, “I suppose like a lot of executives, I simply hadn’t realised how important it is to keep your cash flow right and your borrowings down.”
Earlier, comments Mark Moorfoot, they had been going to their parent company, Eastern Counties Farmers, two or three times a week for more money. Since June of 1975, however, with improvements in their credit control procedures and the more recent operating profitability they have been able to finance themselves completely, working well below their overdraft limit. Even so, Neville is looking for an increase in ceiling to half a million pounds, to enable him to finance the expansion in cooked meats sales which he is convinced will be coming in 1977 /78 as the MCA position becomes less favourable to overseas producers. “We believe we are now as efficient as most people in our area”, says Mark. “We are down to 28 days on our sales ledgers, and we know exactly where we are on control of stock levels and work in progress.”
Relationships
But as Neville points out, none of these factors could possibly have produced the turnabout by themselves. One of the key elements has been the all-out co-operation of the unions and the workforce. “ln the initial stages”, says Neville, “we called the entire workforce into the canteen and put the facts to them squarely. I told them that I wasn’t Jesus Christ – I couldn’t work miracles. We were in a backs-to-the-wall situation and could only get ourselves out if we all pulled together. No one person could do it alone.
“Since then, we’ve kept the unions fully informed on sales turnover and profitabitity. We don’t buy a piece of machinery until we’ve consulted with the people who are going to use it – after all, they probably know more about it than the management. “We set out to get our relationships right, and I think we’ve succeeded. I’ve got to know at least 75 per cent of our people by their Christian names, which helps the relationships situation. We’ve also improved relationships with our producers and formed what we call the ‘Elmswell Club’, for the 17 or so producers who provide 65 to 75 per cent of our raw materials. We agreed to pay them competitive prices, but we also bring them round in small groups to explain what is happening. They all have shares in ECF, so indirectly they also own St Edmunds. We hold quarterly meetings for the producers to give a progress report on what we’ve achieved since the last meeting and to tell them what we are planning to do. This gives us the opportunity to explain how it affects them in terms of the quality of product we need. For instance, we are now aiming at lean meat on the legs and shoulders as well as on the middles. This is a slightly different situation to the buying of bacon pigs because not only are we in the bacon business, but also on cooked meats and tailored pork which take the two ends.
Capital expenditure
In a way, it was expenditure on a new cold store and pork cutting line (around £90,000) that brought St Edmunds to crisis point a couple of years back. They’d been banking on a FEOGA grant which didn’t materialise. But apart from those two capital projects, they had been severely handicapped by shortage of funds. Their real capital budget for updating the plant and developing new products had probably not exceeded £50,000 over two years which meant that, at best, they had only been able to afford to buy second- hand machinery and make no structural improvements to their less than adequate production areas.
Since the beginning of 1975, however, there have been considerable improvements, resulting from expenditure of about £250,000 – still very modest in relation to turnover, but high in the boost it has given to morale and customer relationships. At last people can see that the company is becoming successful and that their efforts have not been in vain. Almost all of the investment has gone into cooked meats, the ‘tailored pork’ area and the sausage room. By the spring of 1977 they hope to have started the initial improvements to their slaughter hall which are designed to bring the whole plant up to EEC standards, even though there is no immediate plan to start exporting. In the cooked meats department, they have installed air-conditioning in the preparation, cooking and packing departments. Chilling facilities have been increased and the packing department turned into an aseptic area, refurbished to EEC standards. New equipment includes a Protecon vacuum ham press, a Sumann cooker, a Dixie-Union slicer and an additional Multivac thermo former working exclusively on the pre-packing of sliced cooked meats. Their Fessman smoke cabinets which they were so pleased with two years ago have had to be turned over from rapid smoking to cooking, purely as an expedient to keep up with the increasing demand. In turn, their old smoking chambers, driven by a massive aeroplane propellor and admittedly less efficient, have had to be refurbished and brought out of retirement.
In addition, a new EEC standard room is being constructed to house their massagers. Tailored pork is already being produced in a newly constructed room, again air-conditioned and built to EEC hygiene standards. In it, they have installed a new shrink-wrap tunnel unit for stuffed pork shoulder joints (and later for the shrink-wrapping of boned- out leg loints) and a new production line for pork chops, pork escalopes and, in future, belly slices. This consists of a new Bettcher cleaver, feeding an llapak ‘Cobra’ stretch tray wrapper. Business has been so brisk on tailored pork, and so many new products have been requested by supermarket customers that they have had to treble production, compensating for the usual seasonal decline in cooked meats business. To help cope, they have also installed a larger, additional Bettcher cleaver which handles more loins at a time. Sausages, from the drastically reduced level of 15,000 lb per week a year or so ago, are currently running at around 60,000 lb per week, ‘And now at sensible margins and on a bulk delivery basis’, as Mark Moorfoot puts it.
In the sausage department, reorganisation has now given them two lines; one from four existing batch fillers, the other from a newly acquired KS continuous filler, coupled to a Famco automatic linker. More orders for sausages are expected early this year, which will necessitate further improvements in their packaging lines. Consequently, a new Carrington packaging line is being brought in for trials. The bulk of their production now consists of top quality sausages sold at a premium price, with the remainder being mainly frozen catering sausages, sold under St Edmunds’ own Farm Kitchen label.
Marks & Spencers
Premium grade fresh sausages go mainly on daily delivery to Marks and Spencers, for whom they are currently sole suppliers. In addition M & S take substantial deliveries of fresh sausage meat. “Marks & Spencers have been very understanding during our difficulties”, commented Neville Freeman, “They now represent around 20 to 22 per cent of our business, and we are very happy to continue building up business with them, providing, of course, that we can maintain the current level of profitability. Some of our directors were perhaps reluctant at first about the idea of developing so large a proportion of our business with people who have such enormous buying power, but I think they are now beginning to realise that M & S are scrupulously fair in their dealings and we’ve built up a very good relationship with them. “Because we are shipping so much to them, including, for example, around 4,500 trays of product a week on the Faversham run, we’ve just paid £23,500 for a railed Bonallack refrigerated container and Scania tractor, which can carry chilled and frozen product, and if necessary, carcasses on the rails as well. Our distribution manager waxes quite lyrical about it!”
Right decisions
Looking back, Mark Moorfoot believes the decisions they made during the re-appraisal period were the right ones. The cut-back on staffing and rationalisation of production to cut out non-profitable and low turnover lines and small calls on perishable goods has certainly helped. But the profits have come from expansion of business with existing and new multiple customers, and doing more for them. “Instead of selling tons of whole backs and bacon backs”, he says, “we are now doing a substantial business in pre-packs. I see us carrying on with our expansion, modernising the plant and becoming even more profitable than we are now. We’ll be looking to increase our throughput on pigs. Although we can slaughter 2¼ to 3 thousand a week with our present facilities, we can’t bone that many out. So we are starting training courses and release courses at schools. We have to be prepared for the new situation that will exist in 1977/78 when the MCA position changes.
Lamb
“We are also looking at the possibility of going into lambs; killing, jointing and sending out in consumer packs. We want to develop even more as a food manufacturing unit, and maybe we can achieve this by developing a similar relationship with lamb producer members of ECF to that which we have with pig farmers. Already we have had talks with supermarket chains who understand the seasonality of the lamb trade and who will bear with us. By supplying them with lamb-especially deboned lamb-cut to their specifications we believe we can develop something udsr them that will enable us to earn a profit and gives them better quality. We may also be able to build up a carcase trade with East Anglian butchers.”
Beginning
Neville Freeman is confident that he has built up a team of people who are flexible and can respond to changes in customer demand faster than most other large suppliers. A major advantage when dealing with big customers. The atmosphere at St Edmunds has changed completely. They’ve worked hard and can see that their efforts have been rewarded by success. “My only worry now”, says Neville, “is that some people may now sit back and think they have done enough. That would be fatal. What we have achieved so far is only a beginning. We’ve solved our critical problems for the time being, but there is still a great deal to be done.”
FROZEN FOODS April 1977
Farmers master fleet operations
Transport
by James Hartley
At the end of March, Eastern Counties Farmers Ltd. , the country’s second biggest farmers’ co-operative with 8,800 members, announced a profit increase of just over 50 per cent for 1976, passing the £l million mark for the first time. Actual net audited profits were £l.2l million for the year ending December 3l compared with £953,000 the previous year.
So what, you may well ask, has this to do with refrigerated transport? The answer is simple: it is the reason for this article. How does a small company enter the IQF and refrigerated transport industry? It was only in 1965 that ECF’s subsidiary, St. Edmunds Factory which now trades as Farm Kitchen Foods, first entered the frozen foods business. So let’s read an extract from the ECF report of chairman John Cross. ‘Particularly pleasing’, he said, ‘has been the remarkable turnround at St. Edmunds bacon factory. Although the meat processing industry generally has experienced serious problems during the year and pig producers are still going through a very difficult time, sales of food products from St. Edmunds increased by 3l per cent to £7.5 million’.
New era
He added that St. Edmunds now have a strong and profitable pig marketing operation, and partly as a result ofthe success of the bacon factory, ECF begins a ‘new era’ with the appointment of Neville Freeman of the bacon factory as chairman and managing director, responsible for livestock services on a group basis.
What lies behind this remarkable success story is the entrance of an old fashioned company into the modern world of frozen foods. St. Edmunds was founded in 1911 as a farmer co-operative, designed to produce green or smoked bacon and pork ready for sale in whole sides. The company made reasonable profits through the Twenties, Thirties and War Years until the end of controls when the Danes began to compete in the UK market. By the end of the 1950s and early 1960s it became a different ball game, with losses, sometimes substantial, being incurred. The answer was to diversify. But how and into what?
Pig meat has always needed preservation, whether by traditional brine curing to produce bacon. or by temperature control for fresh pork. Given pig meat as the raw material plus temperature controlled vehicles – which in those days were simply insulated vans with air cooling – it seemed natural to investigate the same market and so a pie department producing Scotch eggs and various pies was opened.
Primitive
Air control was not adequate for these products and so liquid CO2 was introduced. ‘It was very cheap’ recalls transport manager John Millman, ‘and very primitive. It was also very difficult to get any type of serious control at about 35°F which is what we were aiming for’. On short runs with traditional customers on sales vans this worked for a number of years but then the company, which had always had a strong reputation for quality of product, attracted two large new customers with very strong ideas about proper temperature control. They were Marks and Spencer and the United States Air Force. Frozen, instead of chilled, pies were requested. ‘We went to Petters’, said Mr. Millman, ‘because we knew them at Stowmarket and because I thought mechanical refrigeration was cheaper and better. ‘We are still with Petters’, he added, ‘because the service they give us is absolutely first class both in this area and over trunker routes. lf we have a vehicle stuck in Leeds or Southampton, we have always had a service engineer there within a very short period of time’.
As business developed, the company built a new chill room so that products could be pre-chilled before loading. As replacement vehicles for local deliveries were needed the company purchased 2 ton Commers fitted with Hubbard refrigeration units. For short drops the company currently maintains seven of these vehicles fitted with Hubbard H400H units and seven British Leyland 420 FGs which are insulated only.
One of the main problems at this time was loading. Marks & Spencer specified 35°F delivery temperature. The chill room, however, was situated immediately beside the loading bay and heavy duty curtains between chill and vehicle helped to maintain the required temperature.
Business, however, on the frozen food side continued to develop and it became clear to the company that these facilities were no longer adequate, especially as Safeways and other large quality conscious companies wished to develop their trade. At this time St. Edmunds built a completely new cold store. ‘We almost went broke doing it’ said managing director Neville Freeman. This has blast freezing facilities and provided a totally new product capability. Long distance vehicles for large drops into customer cold stores or distribution points were gradually introduced. At this stage it should be noted that no farmer cooperative is ever over-rich in terms of capital, and St. Edmunds at that time was no exception. A new name, ‘Farm Kitchen Foods’, was introduced so that today the company sells its own product as Farm Kitchen as well as handling a large number of own label products.
The fleet of refrigerated vehicles was expanded. Today Farm Kitchen has five rigid frame British Leyland Boxer 1425 vehicles, fitted with 150 Bonallack insulated containers and equipped, on the refrigeration side, with Petters FM20DG units. These will maintain temperatures down to minus 20°F.
Trunker vehicles
As the larger customers have increased, both in number and in size of order, so has the need grown for trunker vehicles. Today, Farm Kitchen has three tractor units , consisting of two Scania F81 units and one ERF, which are used for three semi- trailers, all Bonallacks, two 32 ft. KL20s and one 40 ft. Refrigeration units are Petters. The units are used on runs to Bristol, Leeds, London and Liverpool, and most of them are serviced on a daily basis. The cold store is equipped with electrical points so that the trailers can be temperature controlled whilst awaiting the tractor units. ‘One of our biggest problems’, said Mr. Millman, ‘has been training our drivers to the importance of temperature control.’ He added: ‘We have been very lucky. All our drivers, except one, are local men and they have been quick to appreciate the importance of good control. There is no point having lots of people in a factory working hard to produce good products, if the driver is unable to deliver them in best condition.’
