A three Weetabix man
In his first interview since becoming Weetabix CEO in October, Giles Turrell tells The Grocer about his plans for stealing more share of the British cereal market and taking the brand global
It’s a good job Giles Turrell has had his Weetabix this morning. The new boss of Britain’s biggest cereal maker has been up since the crack of dawn for a hectic round of meetings before joining The Grocer for a quick bite to eat. More meetings are planned post-lunch and then Turrell intends to head home and embark on a 6km run. It’s clearly one of those three Weetabix days, much like the majority of the 100 or so days he’s spent in the job so far.
Turrell’s predecessor Ken Wood set a blistering pace for him to follow, presiding over a steady stream of NPD, driving category-busting growth and developing a host of new export markets over a seven-year period. Wood also claimed that Weetabix’s US sales could be doubled to $320m in a matter of years. So how does Turrell intend to deliver on these expectations?
Finding a successor to Wood was an uphill struggle for Weetabix. It took eight months with two candidates falling by the wayside before Turrell (then European president of Kimberly-Clark) stepped up to the plate, lured by what he calls a “great British company with a great portfolio of brands and a great team”. Still, times are tough in cereals. Consumer confidence is low, volatility reigns in the raw material markets and, despite the fact 45.8% of cereals were sold on promotion in 2011 (up from 41.7% in 2010), volumes actually fell 1.1%. Value sales grew 4.2%, though this was chiefly driven by price rises [Kantar 52 w/e 30 Oct 2011].
But Turrell is the eternal optimist. “Everywhere you look there’s bad news,” he says. “Of course the economy is a concern and of course there’s huge volatility in our costs but these are just the rules of the game. The way we deal with that is by having a laser-like focus on our costs. And actually there is a lot of good going on as well. The opportunities are greater than the challenges along the way. Things like the Diamond Jubilee and the Olympics will give everyone a lift.”
Weetabix’s profile is set for a lift in more ways than one this year as it’s also the company’s 80th anniversary. Having slashed its ad spend 27.4% last year to £6.5m [Ebiquity 52 w/e 31 Oct 2011], Turrell plans to increase it sharply again this year. The hike in spend is necessary, he says, to support the central plank of his growth strategy in the UK: innovation.
“Increasing our marketing expenditure is absolutely the right thing to do when you’re launching new products,” he says, pointing to recent high-profile NPD such as Alpen Porridge, apricot, almond and hazelnut Alpen muesli, a new range of Alpen cereal bars and Weetabix Golden Syrup, as proof of how his predecessor’s legacy of innovation lives on (Wood oversaw the launch of Oatibix and Chocolate Weetabix). NPD has been crucial to Weetabix’s recent sales growth - sales climbed 5.8% last year to £109.9m, the strongest hike of Britain’s 10 biggest cereal brands. Stablemate Alpen also posted impressive figures with sales up 9.8% [SymphonyIRI 52 w/e 5 Nov 2011].
It would have been a different story without the NPD, argues Turrell. “Innovation is crucial. There’s no question about it our market share has done really well last year because we had a full year of Chocolate Weetabix in 2011 and then we also had the launch of Weetabix Spoon Size. I am extremely excited about the innovation funnel we have. Our growth is about NPD and it’s about investment in our brands.”
Another key part of that investment is promotions.Last year, Weetabix more than doubled its share of the category’s promotional activity to 12.47% [Assosia December 2010 to Nov 2011] and the company admits that it upped the volumes it sold on promotion from 38% to 45%. Of course promotions offer essential support for brands, but it’s a fine balance. Under-promote - as Kellogg’s has admitted it did last year - and volumes will fall (Kellogg’s two biggest brands, category leader Special K and Crunchy Nut Corn Flakes, saw their sales slump by 3.1% and 9.1% [SymphonyIRI] respectively last year). Over-promote and that hard-won brand equity could be in for a battering.
“It will also impact your profitability, category profitability and overall category growth,” says Turrell. “We are not far from getting that balance right. I’d like the number to be lower but we are not at the extreme end. Some people are promoting more than others. Some people are chasing volumes through promotions.”
The key to successful promotions is ensuring they form part of a wider strategy encompassing NPD and marketing activity, says Turrell. This heady mix is the first prong of Turrell’s attack plan for the future. The second is securing new markets overseas through a combination of joint ventures (Weetabix already operates in markets such as Kenya, where it has a 70% share of cereal sales), partnerships with local distributors and direct selling. The latter path is the one Weetabix has followed in North America, where it operates two production plants - the company announced that both plants would receive a slice of a £20m upgrade fund in February. The US is where Turrell sees some of the biggest growth opportunities but he won’t put a timeframe on hitting Wood’s target of doubling US sales.
“It’s a great aspiration,” says Turrell. “Come and talk to me in three months and I’ll confirm whether it’s realistic or not.”
Looks like more three Weetabix days lie ahead.
Giles Turrell snapshot
Job: CEO, Weetabix
Family: Married to Nicole and has two kids, Ben (15) and Ellie (14).
Lives: Walton-on-Thames Career: Before joining Weetabix in October, Turrell spent 15 years at Kimberly-Clark, rising to the post of president of the company’s European consumer business
Hobbies: Running, triathalons, golf, coaching local youth rugby and cricket teams (“One of the most rewarding things I’ve ever done,” he says), travel (recent destinations include Marrakech, Israel and the Florida Keys) and spending time with the family