Prince Charles takes Duchy Originals to America
Prince is spreading his Duchy Originals brand to America and India to promote
organic food and help farming communities.
22 June 2008 The Sunday Times
In the tranquil surroundings of Home Farm in Gloucestershire, Andrew Baker maps
out the future of Duchy Originals and Britain’s organic-food industry.
The new chief executive of the Prince of Wales’s agricultural business is in upbeat mood. He has recently announced plans to launch Duchy Originals in America and India as part of a five-year plan to quadruple annual turnover from £50m to £200m.
Prince Charles launched the company in 1990 to provide natural, high-quality organic farm products in a way that emphasises sustainable production, natural ingredients and traditional skills. Among its products are free-range meat and poultry, real ale, biscuits and preserves.
Baker, 49, took the top job at Duchy last September, having worked at Cadbury’s as managing director for Africa, the Middle East and Turkey.
He has a clear strategy to multiply sales: “We know from research that Duchy consumers buy infrequently and rarely shop across the range. First, we plan to promote the range to consumers through new packaging. Second, we have relaunched our website and will be offering online sales. And third, we will be moving into new areas such as food service [tea shops and hotels] and travel retail.”
Baker also intends to cut the existing range of 300 products by as much as a third in the next year. “This will eliminate weaker lines and reverse the proliferation that has diluted earnings,” he said. “A focused offer will make our proposition much stronger with the consumer.”
As part of Baker’s overhaul he has invested to improve its structure, reset the com’s goals and brought in new blood.
As commercial director he has hired John Luck, who had worked at Coca-Cola and Time Out. The new business development director is Robert McKinnon, who joined from the Marakon marketing consultancy, and the new finance director is Julie Barker, who was at Jaeger.
Unlike other companies, Duchy Originals gives its profits to charity, without creating reserves, and Baker acknowledged the restructuring would affect its bottom line in the short term.
Baker admitted he joined at a challenging time when food costs are soaring and there is growing concern about the environment.
He studied the organic food market, talked to producers, to the company’s main retail partners, Waitrose and J Sainsbury, and commissioned the largest consumer survey undertaken by Duchy Originals. He was surprised to discover that many consumers place a high value on animal husbandry.
“Some 26% said their first criterion in any purchase was animal husbandry. “I knew that animal lovers form a big percentage of the UK population, but I didn’t expect it to be so significant.
“That’s a very good thing for Duchy Originals because our standards in animal husbandry are second to none.”
Besides ensuring that the animals are treated well, Baker wants the company to lead the way in a whole range of sustainability issues, including packaging. It has projects with Wrap (Waste Reduction Action Programme) and plans to cut the weight of packaging and use new materials.
He said: “The global increase in food commodity prices is inevitably a challenge, but it’s not one that will knock us off course because we are operating in the premium sector of the food industry, which is generally resilient in such circumstances.”
Baker said the organic food market remained buoyant. “The UK market is worth £2 billion per annum and is growing at 20% a year. If we are looking to grow fourfold in five years that equates to a growth of about 30% in a market that’s already growing at 20% a year.”
Given the credit squeeze there is also an argument that consumers will eat less at restaurants and spend extra on a decent meal at home.
Home Farm was bought by Prince Charles in 1980 and encompasses 1,100 acres around Tetbury. Manager David Wilson masterminded the farm’s conversion to organic from 1985 over an eight-year period. The first Duchy product was Oaten Biscuits baked with organic oats and wheat harvested at the farm.
“Home Farm is really important,” Baker said, “because this is where it all started and, symbolically and metaphorically, this strategy is about reconnecting with the land, with British agriculture and with the true values of sustainable food production.
Baker also wants to set standards on other key sustainability issues. “Our new standards are enshrined in Duchy’s Good Food Charter and include measures to protect our planet, our rural communities and the great taste of our food. The standards also include our commitment to donate profits to good causes, building on the £7.5m already donated to the Prince’s Charities Foundation.”
Last month, Duchy USA Inc was formed and the company’s present finance director, Michael Bailey, will move to Washington in August to manage the project. Baker is undeterred by the failure of other British companies to break into the American market.
“We have secured sufficient local financing in America to ensure we can develop a sound business. The market for organic food there is four times bigger than in the UK and we believe that our new strategy will be equally effective there.”
As in Britain, the company’s key aim is to protect local farming communities, encouraging them to grow food in a sustainable manner and then helping them sell their products under the Duchy brand.
“It’s much more than selling a quality English brand into America. We want the pr’s original concept of a virtuous circle to be brought to life through our American products,” said Baker.
“The Prince of Wales is well respected as a spokesman on the environment and his views are well known and understood there. This will be a big advantage for our brand in America.”
This view extends to India, where Duchy plans to set up a company by the end of the year.
“We’ve also taken steps to establish a Duchy presence in India linked to the Pr’s Bhumi Vardaan Foundation, established to help the poorer farmers of the Punjab.
“Our intention is to establish Duchy India as a commercial vehicle for the organic produce of farms supported by the foundation. Prince Charles is incredibly passionate about this business and about all the values enshrined within the charter, the logical extension of his vision 20 years ago.
“Then, most people thought he was mad, and it is a testimony to his vision that he has now been proven right.” Milked dry, News Review