A knighthood surely beckons for Mark Price if the likeable Waitrose boss has got his sums right. The final piece in his jigsaw announced this week at Clarence House was a unique strategic partnership with The Prince of Wales, in which Duchy Originals becomes, in effect, the superlative in the Bracknell-based retailer's new good-better-best offering.
It was essential, literally, that Price developed a top tier because the Essential range has made it harder and harder for Waitrose shoppers to trade up although The Grocer also reports that the average price of existing products in the new budget range has actually increased by 1% this year.
But the licensing deal looks really quite compelling. Without paying a penny, he's bagged himself a brand that, thanks to its Unusually Superior owner, punches well above its weight. And using cause-related marketing as a point of difference makes the other multiples' mere use of superlatives look suddenly less absolute.
It also looks a good deal for The Prince's charities. Price is too shy to talk about specifics, but sources close to the deal suggest Waitrose has guaranteed a minimum licensing fee of £2m, every year, with a further £1m contribution in the form of marketing for the brand. That may not sound overly generous when you consider not so long ago Duchy Originals was making a profit of almost £1m. The Prince could easily have sold the business for a far bigger multiple.
But it's the long term that interests, not a one-off. And with Tesco Finest products accounting for 5% of total sales at Tesco, Price calculates that a range of 500 products under the Duchy Originals brand should conservatively account for 2.5% of Waitrose's £4.5bn sales. With a licensing fee of about 7% on sales of £100m, the Prince's charities could expect under that scenario to net £7m. Every year. Arise Sir Mark!
It was essential, literally, that Price developed a top tier because the Essential range has made it harder and harder for Waitrose shoppers to trade up although The Grocer also reports that the average price of existing products in the new budget range has actually increased by 1% this year.
But the licensing deal looks really quite compelling. Without paying a penny, he's bagged himself a brand that, thanks to its Unusually Superior owner, punches well above its weight. And using cause-related marketing as a point of difference makes the other multiples' mere use of superlatives look suddenly less absolute.
It also looks a good deal for The Prince's charities. Price is too shy to talk about specifics, but sources close to the deal suggest Waitrose has guaranteed a minimum licensing fee of £2m, every year, with a further £1m contribution in the form of marketing for the brand. That may not sound overly generous when you consider not so long ago Duchy Originals was making a profit of almost £1m. The Prince could easily have sold the business for a far bigger multiple.
But it's the long term that interests, not a one-off. And with Tesco Finest products accounting for 5% of total sales at Tesco, Price calculates that a range of 500 products under the Duchy Originals brand should conservatively account for 2.5% of Waitrose's £4.5bn sales. With a licensing fee of about 7% on sales of £100m, the Prince's charities could expect under that scenario to net £7m. Every year. Arise Sir Mark!
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