R&R chief executive James Lambert tells Nick Hughes why he’s not afraid to gun for Unilever’s dominance in ice cream
A siren screams out across R&R's vast Northallerton ice cream factory, sending workers scurrying towards a malfunctioning packing machine.
First on the scene is chief executive James Lambert who sets about lifting boxes of product clear of the faulty belt with the controlled urgency of a firefighter shuttling kids from a burning building.
Lambert's obvious love for ice cream is a lifelong affair. A former dairy farmer, he acquired Cardosi, a Yorkshire ice cream manufacturer, with business partner Jonathan Ropner in 1985, forming Richmond Ice Cream.
A quarter of a century later, following numerous acquisitions and a merger with Italian supplier Roncadin, Lambert is now in charge of the £500m R&R business, with operations spanning the Continent and a portfolio of iconic brands including FAB, Lyons Maid and Thorntons. And now he is attempting to steal a march on Unilever, the industry's kingpin.
R&R has just launched an own-label ice cream that Lambert hopes will check the inexorable growth of Ben & Jerry's. Loaded, which hit Asda last month, bears a stark resemblance to the Unilever brand, right up to the large chunks of inclusions.
It's not a subtle imitation but a provocative play for Ben & Jerry's fans, a charge Lambert is happy to admit. "I wanted to make sure it was as close as possible so people see it having the same fun with inclusions."
Priced at the same level as Ben & Jerry's when the latter is on maximum discount, he rejects the accusation Loaded is devaluing the market. In the two weeks after launch in Asda it racked up sales of £400,000. "Consumers want it. And if they want it they should have it and they will decide whether it's devaluing the market or making Ben & Jerry's more competitive."
Lambert is determined to become an even bigger player in the super-premium market the fastest-growing sub-category in ice cream. R&R is set to launch another retailer brand in time for the World Cup and Lambert expects every retailer to carry a Ben & Jerry's doppelgänger by the end of the year. "Any competition is good competition," he enthuses. "It just drives more consumers into the sector."
Ice cream suppliers have brought in new consumers not just through NPD but also sustained price promotions. With 428 promotions in 2009, R&R's Nestlé brand was the second-most heavily promoted behind Unilever's Wall's. So has ice cream itself become a commodity?
"I wouldn't use the word commodity," says Lambert. "I would say it's increasingly promotionally promiscuous. People will just pick up what's on the aisle end a lot of the time. Some 60% of ice cream is sold on deal, which is great as people try different products. To me commoditised means little innovation and it's just trading on price. That I don't see in ice cream."
Loaded aside, R&R's most recent launch is Aero Bubbles, which Lambert is confident will be a hit. It's not always been the case.
Previous attempts to put both After Eights and Quality Street on to an ice cream stick "didn't really work", he admits, although there have been successes too, notably Kit Kat and Thorntons ice creams, which have allowed it to compete on-shelf against Magnum and the Cadbury-licensed products produced by rival Fredericks Dairies. In fact, with 7.2% value growth last year, R&R handheld singles grew faster than both Fredericks' and Unilever's [IRI 52w/e 26 December 2009].
Along with its hefty scale and acquisitive history, the Nestlé licence, in particular, is crucial to R&R's ability to play in the same park as Unilever, as is R&R's strength in own label, which accounts for 60% of its value sales.
Kelly's, still produced in its native Cornwall, is R&R's tilt at the premium take-home market, which, along with the value end, is the place to be in ice cream as consumers "graze at home" more frequently. Lambert says Kelly's is "growing like hell" with sales doubling in the past year and similar growth predicted for this year.
At the other end of the spectrum, Lyons Maid, part of the Nestlé UK ice cream purchase in 2001, is enjoying an astonishing revival in fortunes. Lambert says its price-marked packs appeal to shoppers at the value end of the market; a point given credence by phenomenal sales growth of 212% in 2009.
Future acquisitions and deals will be brokered, not in the UK but in Europe where Lambert plans to achieve even greater scale by consolidating the supply base. R&R is in the process of buying one major European supplier and Lambert predicts a further two acquisitions by the year-end.
"The trends in Europe are very similar to where the trends were in the UK 10 years ago, which is a very dominant Unilever, own label becoming very much dominant and far too many players, most of which are heavily indebted, who aren't investing in innovation. Lots of those businesses are coming to us wanting to sell."
Where the UK is concerned, he believes ice cream will continue to grow because of its "dynamic players", with the pecking order defined by whoever can conceive the next iconic brand.
"The real key will be who can create the next Ben & Jerry's. Because there will be another brand that comes along." Good news for anyone that shares Lambert's passion for the frozen stuff.
Snapshot
Name: James Lambert
Job title: chief executive R&R Ice Cream
Age: 51 Family: Married with two sons
Lives: Northallerton, Yorkshire
Education: Cirencester Agricultural College
Background: Lambert began life as a dairy farmer before setting up Herdwise with business partner Jonathan Ropner in 1981 "selling semen to dairy farmers". In 1985, the pair acquired Cardosi, a local ice cream manufacturer, forming Richmond Ice Cream. For 10 years they juggled running both Herdwise and Richmond before focusing their attention purely on the ice cream business. Oaktree Capital Management bought Richmond in 2006 and merged it with Italy's Roncadin to form R&R Ice Cream.
Hobbies: Sport, travel, gardening "I'm turning five acres of field into garden over a five-year period".
Favourite R&R product: Kelly's Clotted Cream ice cream 1-litre
A siren screams out across R&R's vast Northallerton ice cream factory, sending workers scurrying towards a malfunctioning packing machine.
First on the scene is chief executive James Lambert who sets about lifting boxes of product clear of the faulty belt with the controlled urgency of a firefighter shuttling kids from a burning building.
Lambert's obvious love for ice cream is a lifelong affair. A former dairy farmer, he acquired Cardosi, a Yorkshire ice cream manufacturer, with business partner Jonathan Ropner in 1985, forming Richmond Ice Cream.
A quarter of a century later, following numerous acquisitions and a merger with Italian supplier Roncadin, Lambert is now in charge of the £500m R&R business, with operations spanning the Continent and a portfolio of iconic brands including FAB, Lyons Maid and Thorntons. And now he is attempting to steal a march on Unilever, the industry's kingpin.
R&R has just launched an own-label ice cream that Lambert hopes will check the inexorable growth of Ben & Jerry's. Loaded, which hit Asda last month, bears a stark resemblance to the Unilever brand, right up to the large chunks of inclusions.
It's not a subtle imitation but a provocative play for Ben & Jerry's fans, a charge Lambert is happy to admit. "I wanted to make sure it was as close as possible so people see it having the same fun with inclusions."
Priced at the same level as Ben & Jerry's when the latter is on maximum discount, he rejects the accusation Loaded is devaluing the market. In the two weeks after launch in Asda it racked up sales of £400,000. "Consumers want it. And if they want it they should have it and they will decide whether it's devaluing the market or making Ben & Jerry's more competitive."
Lambert is determined to become an even bigger player in the super-premium market the fastest-growing sub-category in ice cream. R&R is set to launch another retailer brand in time for the World Cup and Lambert expects every retailer to carry a Ben & Jerry's doppelgänger by the end of the year. "Any competition is good competition," he enthuses. "It just drives more consumers into the sector."
Ice cream suppliers have brought in new consumers not just through NPD but also sustained price promotions. With 428 promotions in 2009, R&R's Nestlé brand was the second-most heavily promoted behind Unilever's Wall's. So has ice cream itself become a commodity?
"I wouldn't use the word commodity," says Lambert. "I would say it's increasingly promotionally promiscuous. People will just pick up what's on the aisle end a lot of the time. Some 60% of ice cream is sold on deal, which is great as people try different products. To me commoditised means little innovation and it's just trading on price. That I don't see in ice cream."
Loaded aside, R&R's most recent launch is Aero Bubbles, which Lambert is confident will be a hit. It's not always been the case.
Previous attempts to put both After Eights and Quality Street on to an ice cream stick "didn't really work", he admits, although there have been successes too, notably Kit Kat and Thorntons ice creams, which have allowed it to compete on-shelf against Magnum and the Cadbury-licensed products produced by rival Fredericks Dairies. In fact, with 7.2% value growth last year, R&R handheld singles grew faster than both Fredericks' and Unilever's [IRI 52w/e 26 December 2009].
Along with its hefty scale and acquisitive history, the Nestlé licence, in particular, is crucial to R&R's ability to play in the same park as Unilever, as is R&R's strength in own label, which accounts for 60% of its value sales.
Kelly's, still produced in its native Cornwall, is R&R's tilt at the premium take-home market, which, along with the value end, is the place to be in ice cream as consumers "graze at home" more frequently. Lambert says Kelly's is "growing like hell" with sales doubling in the past year and similar growth predicted for this year.
At the other end of the spectrum, Lyons Maid, part of the Nestlé UK ice cream purchase in 2001, is enjoying an astonishing revival in fortunes. Lambert says its price-marked packs appeal to shoppers at the value end of the market; a point given credence by phenomenal sales growth of 212% in 2009.
Future acquisitions and deals will be brokered, not in the UK but in Europe where Lambert plans to achieve even greater scale by consolidating the supply base. R&R is in the process of buying one major European supplier and Lambert predicts a further two acquisitions by the year-end.
"The trends in Europe are very similar to where the trends were in the UK 10 years ago, which is a very dominant Unilever, own label becoming very much dominant and far too many players, most of which are heavily indebted, who aren't investing in innovation. Lots of those businesses are coming to us wanting to sell."
Where the UK is concerned, he believes ice cream will continue to grow because of its "dynamic players", with the pecking order defined by whoever can conceive the next iconic brand.
"The real key will be who can create the next Ben & Jerry's. Because there will be another brand that comes along." Good news for anyone that shares Lambert's passion for the frozen stuff.
Snapshot
Name: James Lambert
Job title: chief executive R&R Ice Cream
Age: 51 Family: Married with two sons
Lives: Northallerton, Yorkshire
Education: Cirencester Agricultural College
Background: Lambert began life as a dairy farmer before setting up Herdwise with business partner Jonathan Ropner in 1981 "selling semen to dairy farmers". In 1985, the pair acquired Cardosi, a local ice cream manufacturer, forming Richmond Ice Cream. For 10 years they juggled running both Herdwise and Richmond before focusing their attention purely on the ice cream business. Oaktree Capital Management bought Richmond in 2006 and merged it with Italy's Roncadin to form R&R Ice Cream.
Hobbies: Sport, travel, gardening "I'm turning five acres of field into garden over a five-year period".
Favourite R&R product: Kelly's Clotted Cream ice cream 1-litre
No comments yet