It’s a great mystery as to why George Weston, one of Britain’s most brilliant businessmen, has made such a mess of the Allied Bakeries business. He ploughed millions into plant and machinery to achieve economies of scale. But somehow Hovis, despite being on its knees, has clung on like Rocky the boxer, and is still taking lumps out of it, even mounting a bit of a recovery of late. And having failed to land a knockout blow, Allied spent millions more – this time on innovation in its Kingsmill brand. But unlike Hovis, it’s not a strong enough brand to support innovation, and its NPD efforts actually took the brand further downmarket.
What next for Allied Bakeries after losing the Co-op contract?
Meanwhile, on the own-brand side, Warburtons has run rings around Allied, through canny distribution deals with own-label bakeries Fine Lady and now Jackson’s. The answer is surely obvious: Allied should just buy Hovis. While competition laws have been cited as a barrier, their combined sales of total bakery are 15%. Amid intense own-label competition, surely even CMA boss Andrew Tyrie could be persuaded. If not, he’s leaving in September…
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