Duchy courage

These are challenging times for organic, but the Duchy Originals boss remains undaunted. Richard Ford reports


Probably the most threatened species at the moment in the food world.” Andrew Baker pulls no punches about the predicament organic food companies are in at the moment. The Duchy Originals group chief executive readily admits that recession and organics don’t mix.

Yet, he claims in his first interview with the press since he took up the reins 17 months ago, the Duchy business is in a stronger position now than ever having reviewed its brand, its price positioning and, indeed, its whole business model.

The next stage in securing the brand’s survival and growth, reveals the former MD of Cadbury Schweppes for Africa, Middle East and Turkey, will be to align the business to what he describes as his ‘four As’. “We have to be more affordable, more available, more appropriate and people have to be more aware,” he proclaims.

But there’s another set of principles he believes Duchy should adhere to first. Successful businesses – even those with the Prince of Wales as a figurehead – must remember to do three things, he says, referring to American business guru Jim Collins’ book Good to Great. “Only to do things that you’re passionate about, only to do things that you can be the best in the world at and only to do things that drive your economic engine.”

While the passion was evident at Duchy, the company’s rapid growth meant the other two ideals weren’t always followed. “The model had been to proliferate, so there were lots and lots of products,” he says. “We were getting into areas that were a long way from the core of the business, a long way from that starting point of sustainable farming at Duchy Home Farm. A lot of our products were not driving our economic engine and we were not necessarily the best in the world at them.”

In short, the business model that had served Duchy well enough until then had reached the end of the road. It was time to regroup and rethink. Over the past year and a half, Baker has done just that, slashing the brand’s SKUs from 300 to 170, cutting the number of full-time staff from 23 to 16, and fine-tuning Duchy’s supply base.

He is now working on the ‘four As’. A rebrand of Duchy’s entire range from this month will drive awareness, he believes, while a concerted effort to increase the number of independents and appropriate multiple retailers that stock the brand will address availability.

The work done stripping out lines that didn’t fit, including 50 confectionery lines, has already gone a long way toward making the brand more appropriate. “Some of the products were simply not good enough from a quality point of view,” he adds.

However, in the current economic climate, the most important ‘A’, by far, is affordability, says Baker. Tying in with the rebrand, Duchy will be reducing the weight – and therefore the price – of a large proportion of products, starting with biscuits.

As Baker explains, “the problem with affordability was not that biscuit for biscuit we were more expensive, it was that we were the only ones in 250g packets”. Both its biscuits for cheese and its sweet biscuits will be reduced to 150g, and its chocolate biscuits to 100g or 125g boxes. Other lines, including preserves, will be similarly reduced in weight and a wafer-thin ham will be launched.

Baker also hopes to re-establish Duchy’s credibility as a consumer champion, not only for organic, but also for sustainable food. “If we get it right I hope the brand, its success, values and product qualities, inspire other companies and retailers to embrace the same sustainability strategy that we have through their own label.”

Although Baker is keen not to stray too far from Duchy’s farming roots, he is not averse to NPD per se. The business is currently investigating a number of new avenues, including healthy snacking. Baker reveals he has “a well-known celebrity who just happens to be a passionate organic farmer” lined up to work with. He would also like to introduce fish and honey to the Duchy mix. “Our objectives are not to rule the world,” he adds cautiously. “Organic is and always will be the core of our range and our proposition, but where relevant, we’re definitely interested in exploring so-called non-organic areas.”

All this talk begs the question: could the Duchy heraldic shield be put to use as an ethical logo in its own right?

“That would be terrific; the more the merrier. I’d love to see it on M&S bacon,” muses Baker. “It would be a guarantee that a company had taken care to ensure that the packaging was properly sourced, the pricing was ethical and the growing was non-pesticide and non-chemical.”

Baker clearly has high hopes for the brand in the long term and this is reinforced by his confidence that Duchy Originals Ltd will return to profitability next year after an anticipated loss this year. In the year to March 2008, profit was down to less than £200,000 from just under £1m the year before, however, and in the short term the outlook remains tough, he admits.

“The organic market is not suddenly going to ping back the 20% or so it has lost,” he says, adding that the foundations on which organic was built have lost clarity for the consumer. But cheap, mass-produced food is not the answer even in the current environment. “I am surprised, amazed and disappointed at the recourse to tertiary brands and basic own-label brands in the belief that this will be the future of our food industry,” he says. “You must not bogof organic – it’s a complete contradiction.”

The key is to reinforce – not undermine – organic’s core, premium values, says Baker. “I started 2009 much more upbeat about the brand’s future. But it does depend on our ability to spend our very limited resources effectively in building that brand awareness among new consumers.”

Get all this right and, member of a threatened species or not, Duchy Originals will be fit for a prince.