Food industry: Home for little and large

| 12/03/2008 | Reply

Food is big business in West Yorkshire. It is home to two of the UK’s big four supermarkets (Asda and Wm Morrison), the country’s biggest dairy products company (Arla), as well as Northern Foods, one of the UK’s biggest food manufacturers.

At
the same time, a growing band of smaller and more entrepreneurial food
manufacturers, producing everything from bagels and ice cream to Halal
baby food for the Muslim community, are emerging alongside the big food
manufacturers based in West Yorkshire.

Leeds lies at the heart of
a Yorkshire food industry that comprises more than 1,100 food and drink
companies generating turnover of £8bn ($16bn). Although much of the
food manufacturing is done elsewhere in the region, Leeds has become
increasingly important as a headquarters location.

Northern Foods recently shifted its head office from Hull to Leeds, and Glisten, the sweet manufacturer, moved its head office across the Pennines from Blackburn to Leeds.

Close
proximity to the headquarters of two of the country’s biggest
supermarkets is clearly an advantage for food manufacturers, given the
buying power of the supermarkets. It helps explain why Arla, Asda’s
sole milk supplier, continued to retain its UK headquarters and more
than 1,000 staff in Leeds, after its takeover by Denmark’s Arla Group.

There
are considerable similarities in the history of Arla, Asda, and
Northern Foods. All three started off as dairy businesses collecting
milk from local farmers. Asda, which used to be known as Associated
Dairies, diversified into supermarkets in the 1960s, and Northern
Foods, which started out as a family run dairy business in 1937,
changed its name from Northern Dairies in 1972 to underline its
transformation into a food manufacturer.

By contrast, Morrison,
the UK’s fourth biggest supermarket group, has always been a retailer.
It was established by William Morrison, father of Sir Ken Morrison,
Morrison’s current chairman, who set up a grocery stall at Bradford
market in 1899. However, it was Sir Ken who turned a small regional
grocery chain into one of the UK’s most successful supermarket groups.

Sir
Ken, who finally retires this month, has underlined his commitment to
his home town of Bradford by building a new £50m headquarters there in
2005.

There have been fears that the aftermath of Morrison’s
troubled £3bn takeover of rival supermarket group Safeway in March
2004, and the subsequent overhaul of the Yorkshire company’s top
management team, will weaken Morrison’s long-term commitment to
Bradford after Sir Ken’s retires.

However, the experience of Asda, which was taken over by Wal-Mart,
the US retailing giant, in 1999, suggests such fears could turn out to
be unfounded. After a rocky patch a few years ago Asda has recovered
its old growth potential and is once again one of Leeds’ great business
success stories.

It has overtaken J Sainsbury to become the UK’s number two supermarket chain after Tesco.
The number of Asda stores has risen by nearly 50 per cent to 352, and
its workforce is up by more than a third, to 160,000, since Wal-Mart
took charge.

Asda’s above-average growth is underlined by
recently announced plans to open another 22 stores in 2008, creating an
extra 9,000 jobs. Andy Bond, Asda’s chief executive, and his top
management, plus 1,500 staff, show no sign of wanting to exchange their
headquarters in Leeds city centre for the questionable benefits of
being “closer to the action” in London.

The size of the region’s
big food retailers and food manufacturers is not the only thing that
gives Leeds and West Yorkshire a competitive edge in the UK food
industry. It is also home to a growing ethnic food industry.

Bradford’s
large Indian and Pakistani communities have spawned a number of
fast-growing restaurant chains of which Aagrah, set up by Mohammed
Sabir, and Akbar’s, set up by Shabir Hussain, are among the best known
nationally.

But Mumtaz, which has been transformed from a small
Bradford take-away in 1980 and into an award-winning restaurant that
catered for the Queen last year, has the greatest potential to develop
into a sizeable food business.

While most of its competitors have
stuck to the traditional Asian restaurant business, it has diversified
into ethnic food manufacturing. Mumtaz Food Industries, which supplies
its own branded goods to all the big supermarket chains, is now much
the biggest part of the family business, and has recently signed a
contract with the National Health Service to supply Halal baby food to
hospitals across the UK.

Gul-Nawaz Khan Akbar, managing director
of Mumtaz Food Industries, one of two brothers running the Mumtaz
family business, cites Sir Ken Morrison, the outgoing chairman of
Morrison’s, as his biggest inspiration.

Nevertheless, even an
aggressive Yorkshire retailer such as Sir Ken would probably have
baulked at celebrating the Queen’s recent visit to Mumtaz’s Bradford
operation by putting Her Majesty’s face, plus the words “the food was
beautiful”, on the company website.

Category: Europe, Restaurants, Retail

Leave a Reply

Pin It on Pinterest

Share This