Archives for January 2010

"They can't outspend their rivals, but they can out-think them".
"When the recovery comes, it can't be back to business as usual."
"Don't wait for your ship to come in, swim out to grab it."

Have you noticed it? The cold winter air is thick with warming business mottos. Everyone from the small greengrocer to the funky digital start-up is being urged to "think out of the box".

Nowhere more than here. A new site launched today by Business Link South West. I think of their advisors as the Doctor Finlays of Enterprise; firm but friendly hands guiding small businesses through the tough times. They've been flat out over the last two years of course, but now they think the patient is recovering.

I see dozens of businesses in my job," says Chris Simpson, one of their advisors based in Bath. "Every day they ask me when the recession will end. But I tell them all the same thing: don't wait for the sun to come out."

Chris and his organisation are sure that recovery will not come to firms who wait.

So today their website showcases a "Challenger Business". It's an old fashioned bookshop, Toppings of Bath. Robert Topping hates business jargon so much he won't even use the word "customers".

"They're friends, book lovers, people, for heaven's sake!" And when Chris and I meet him, he explains gleefully how he breaks the cardinal rule in bookselling.

"They call it stockturn. Every book is meant to sell five times a year, so it's not on the shelf for long. That way, by the time you have to pay the publishers for it, you've already sold it. But then you don't have books people actually want."

Mr Topping knows the industry rules from the inside, having worked for Waterstones, who sacked him for being too much of a maverick. His shop is now crammed with books, many of which haven't sold for years. But go in for something unusual, and he'll have it.

I meet a behatted, bookish Bathonian who loves the place. "Nothing is too much trouble," he gushes. "Free coffee, a recommendation, and if they haven't got it - which is extraordinary - they'll get it in for you double quick."

It sounds old fashioned, quaint even. But in the year that Borders went to the wall and high street booksellers really struggled, Toppings made good money.

There'll be another Challenger business along tomorrow, and every day for 100 days.

But what's the point? What's the message?

"Challengers can take on and beat their larger, more established rivals," says Ian Muir, one of the brains behind today's campaign. "They think and act differently. They see niches in established markets or enter new ones unhindered by tradition."

The hallmarks of a challenger? They attract the best people, not by paying more but by making an "inspirational working environment". They beat the competition by "being innovative in everything they do." They have effective marketing "embedded in their DNA".

OK, time for the sceptic-check. Hands up the boss who tries to make their workplace depressing. The MD who hates innovation. The CEO who thinks marketing is a waste of time. Is all this just a fancy piece of Business-Think Motherhood and Apple Pie?

"Every business says it," Chris Simpson, "but these firms actually do it."

In the end, the best proof is the examples. Cult Clothing. Majestic Wine. The Tobacco Factory. Xmos micro-chips. Bart Spices. Bottle Green Drinks. Renishaw Engineering. Ecotricity green power.... West Country firms with inspiring leaders, and remarkably healthy balance sheets.

"We found close on 100 inspirational firms round the table in a couple of hours," Ian goes on. "There are so many, we've been able to pick and choose our examples from across the West Country."

The campaign will be featured regularly on the South West Business site, so if you want to follow the stories it's a good place to check up on.

You'll have your own challenger heroes, maybe your own top tips. Why not share them here? It's not an advertising space - the blogteam will filter out any blatant plugs. But this will be the space where the West's entrepreneurs share their wisdom. And hey, if you still want "blue sky thinking", I recommend my colleague Ian Fergusson's Weather blog.

Sainsbury's want to build a new supermarket. It will be huge. Their largest store in the South West. At 9,300 square metres, it will be bigger even than the huge Asda at Cribbs Causeway. Bigger than a football pitch, which is odd - since it will be built on one.

Bristol City Football Club's dreams of a new stadium rest on this deal. If the council approves Sainsbury's plans, they'll buy Ashton Gate. Then City can build their new field of dreams for the 21st century. Then Bristol might be a World Cup City in 2018.

So the question Sainsbury's are asking in South Bristol can be paraphrased like this.

"Would you like to try a new supermarket today ? If not - no worries, but then you can't have the World Cup either."

Have a browse through all their artists impressions here.

Have council planners ever faced such a tough call? There are, as ever, opponents to the store, even though Sainsbury's already has a big one down the Winterstoke Road.

"We'd rather see a mixture of shops, affordable housing, and even some working units," Cllr Charlie Bolton tells me. He's Bristol's only Green Party councillor, and it's no surprise he represents Southville. The area is very proud of its local shops, its eco-traders, its microbreweries. Famous architect George Ferguson - he of the red trousers - has won national acclaim for turning the old Wills cigarette factory into "The Tobacco Factory", a funky theatre, bar, even farmers' market venue.

So Southville might want to say "no thanks" to a mega Sainsburys. Even though the company is already there, it's used by thousands of locals, and the new store will employ 350 more people. But will anyone listen?

Councillors insist the planning process will be as independent as ever. Sainsbury's insist the consultation will be real. Changes can be made.

But Southville and Bedminster has a strong sceptical streak running through them. And with Bristol's football future riding on this store, it will take a lot to convince the locals the deal is not already done.

So the battle is over. After six months of very public wrangling, Cadburys and Kraft have kissed, made up, and signed a deal. The details are for our city desk, but the fact that Cadburys are recommending the takeover changes everything for Keynsham.

The town's chocolate factory, earmarked for closure this year under Cadbury plans, should now be saved if Kraft keep their promise.

(Kraft's UK Chief Exec, Nick Bunker, speaking in October 2009)

"I'm feeling elated, but jittery", Amoree Radford told BBC Radio Bristol this morning. Amoree's been a lone voice for the past six months, the only Brit backing Kraft. But when Cadburys said they would close the Keynsham factory two years ago, Amoree began a tenacious campaign to "Save Cadburys in Keynsham".

There's been a chocolate factory in the town on the banks of the Avon since 1935. Ironically, it was founded after another merger, this time one in which Cadbury was the predator, taking over the Bristol firm of JS Fry. Fry's Chocolate Cream and Turkish Delight were already household favourites, and Fry's became a tasty treat that the larger Birmingham company took a shine to. Sound familiar?

Over the next 75 years the factory became a central part of Keynsham life. Its 230-acre site is a familiar landmark, not least because much of it is covered in football pitches. My mother-in-law played hockey on the grounds, as have thousands of Keynshamites and indeed Bristolians over the years. The Quaker community principles rooted Cadbury's deep into the fabric of local life.

All that love was lost in a big hurry when Cadbury announced, in 2007, they would close the place. This was to be the plant's last year in operation. Spin forward to 7 September 2009, and tucked away in Kraft's offer for Cadburys was this pledge:

"We believe we would be in a position to continue to operate the Somerdale facility,
which is currently planned to be closed."

So, should Keynsham trust the Americans? Unite, the staff union, is sceptical. They point to Kraft's takeover of Terry's of York, in the 1990s. Go to York today, and union leaders will show you a museum but no factory. The famous chocolate orange is now made in Poland. But in Kraft's defence, they did operate the York plant for 13 years after the takeover. And Keynsham's chocolate factory had been marched right to the brink, so people there tell me Kraft cannot be worse than the Cadbury management.

"Kraft's people seem very nice," Amoree Radford told me this morning. "They employ over a thousand people making Kenco coffee here. Their base is just up the road in Cheltenham. And the Cadbury board have already done the dirty on us. We never wanted to lose the chocolate, we wanted to lose the board."

For now, we must wait and see the details of the deal. But one thing is sure. If you want to find people cheering the takeover of a British chocolate icon by an American food giant, the best place to look is Keynsham.

There have been protests in Birmingham.
Marches in Westminster.
Outside the Cheltenham HQ of Kraft UK on New Year's day, "John Bull" delivered a message to the Americans: Hands off our National Icon.

Ray Egan, or 'John Bull', as he calls himself, is 71 and yet spent January 1st hanging union jack bunting outside Kraft's regency offices. "Cadbury's is a bastion of Britishness", he declared.

So why does Keynsham love Kraft, alone in the UK?

Most obviously, of course, because the US food giant has pledged to keep the town's famous chocolate factory open. Cadbury's will close the plant this year, unless the Kraft bid is successful.

"I do believe Kraft," Amoree Radford tells me. Amoree has run the "Save Cadbury's" campaign in Keynsham since mid 2007, when the closure plans were announced. She is wary of big corporates, but persuaded by Kraft.

"I do really think that they want to put back into Great Britain, and I think that is an absolutely prime location to carry on making chocolate for the British people."

So as the deadline for Cadbury's shareholders approaches to accept or reject the £10bn offer from Kraft, Keynsham alone is rooting for the Americans.

But as you talk to people in the town you sense there's something else at play too. Psychology, a bit of revenge even. First, revenge on the Cadbury board, who many in Keynsham now despise.

Any notion of the firm's Quaker roots are long gone here. When the management decided to pack up and send the work to Poland, appeals to charity and community values fell on deaf ears. They would love nothing more than to see the board lose a fight - and the individuals lose their jobs.

And it's even more complicated for the workers. Big "enhanced redundancy" deals are on the table for staff when the factory closes in the Autumn. Anyone who steps out of line and criticises the management, let alone speaks in favour of the hostile bid, will lose out.

Weirdest of all is the union position. Unite represents workers in both Keynsham and Bournville. While Kraft may be the best bet for the Somerset staff, Unite's national office has backed the UK Cadbury board to the hilt, launching this massive online campaign and organising marches. All of which means I can no longer even talk to the Unite people here, because they must toe the national "We Love Cadburys" line.

City sources tell me that Tuesday, Jan 5 won't be the final deadline. Kraft have told investors to sell or stick by then, but it's likely they will announce a postponement. There's talk of Kraft raising the bid, of Hershey, or even Nestle, entering the fray.

But as Danny Cox of Hargreaves Lansdown told me, "the price isn't right yet. But it looks likely Cadbury's will sell to someone. The only question is to who - and when."

Update 09:07
The dance continues. As predicted, Kraft have circled another date in our diaries, 16 January. The Americans promise details of a new revised offer to Cadbury shareholders by then. It will include more cash - up by 60p a share from the £3 already on the table. The remainder is in shares in the new Kraft / Cadbury business, worth in today's money about £7.40. Full details here.
And strike that line about Nestle - they were more interested in a frozen pizza from Kraft than a Creme Egg from Keynsham. Pah, what taste!