Miles Salter talks to David Kappler, non-executive chairman of Premier Foods, about the takeover of Marlow Foods and vegetarian brand Quorn
When Premier Foods announced its takeover of Marlow Foods on Monday, June 6, the impact was immediate - the share price rose 6.93% in one day. It was a welcome piece of news for Premier, which is still struggling with the fallout from the Sudan 1 food scare. It was also a shrewd and decisive move into a traditionally vegetarian market for a business largely associated with traditional, no-nonsense English foodstuffs such as Typhoo Tea, Hartley’s Jam and Branston Pickle.
While Premier was announcing the £172m deal to the press in London, its non-executive chairman, David Kappler, was at Marlow Foods’ base in the north east of England, talking to the staff about the changes that could soon be taking place.
“Having been on the receiving end of a takeover bid, I know that for a lot of people it can be an uncertain time,” he says in an exclusive interview with The Grocer in the week after the deal. “They don’t necessarily know about the deal when it is announced, and there will be a lot of questions. If I can be there as a face for Premier, it’s the best use of my time. If I was working at Marlow, it’s how I would like to be treated. I’d like to see someone senior from the acquiring company take the time on day one to come and explain what’s happening.”
Kappler also reassured the Marlow Foods workforce that their jobs were in good hands. “In this instance, we can say that for the vast majority of them, their jobs will be secure, because it is a complementary business to Premier,” he explains.
Kappler believes the acquisition of the Quorn brand, which at £95m becomes the biggest in the Premier stable, makes the business relevant to a broader base of consumers looking for healthy foods. “I think it is right that a company looks for growing markets adjacent to, if not in, their core area,” he said. “Our products are mainly ambient rather than chilled or frozen. We need to expand ourselves into some faster-growing food markets, and hopefully buying Marlow Foods will bring us into some of those areas. That’s really important. There’s real growth potential there. It’s a nice business, but we don’t think it is as commercially developed as it could be. We’re confident we can develop it well.”
Kappler is also confident that the Sudan 1 incident will be fully resolved and, while he is unsurprisingly coy about the debacle, he insists that the issue of contaminants in the food chain is an issue for the food industry as a whole. He adds: “There’s a lot of fear and the facts are difficult to come by. The facts often do not lead to the solid black and white conclusions that people might like, whether it’s over GM crops or the debate about the effects of sugar. Even potatoes have been perceived to be both good and bad over the years. These arguments will be with us forever now, because a whole industry has grown up around it.”
The industry today is very different to the one in which Kappler grew up. After leaving his local grammar school in Lincoln, he joined Cadbury in Bournville, Birmingham as a trainee accountant in 1965. “For an 18-year-old it was a wonderful environment,” he says. “There were lots and lots of sporting activities.”
Away from the sports field, Kappler’s potential as a future leading light didn’t take long to emerge. In 1968 he won a prize when he came top in exams for the Chartered Institute of Management Accountants. “It made people sit up and take notice,” he says. “I was ambitious, reasonably bright and hardworking. And I picked up a lot of good working habits from the people I worked with.”
Kappler left Cadbury to become finance director of the Trebor Group from 1984 to 1989. The family asked him to help oversee the selling of the company and in 1989 Trebor was sold to Cadbury Schweppes. In 1995, he became the finance director of Cadbury Schweppes, a position he held for nine years.
Kappler relished the cut and thrust of striking big deals. One of the biggest was Cadbury Schweppes’ takeover of the Adams chewing gum business. The company was the second-biggest in the global chewing gum market, and the deal was worth a staggering $4bn, so big that the Cadbury Schweppes Group had to be re-financed for it to work.
The megadeals came to an end in March 2004, when Kappler retired from Cadbury. Now 58, he is a non-executive director for several companies, including HMV, Shire Pharmaceuticals and InterContinental Hotels.
Despite the Sudan 1 scare and anxieties about the fear culture that is developing around food, he remains confident about the future. “People do enjoy eating and preparing food,” he says.
“We’ll never get into the pill-popping scenario that you see in science fiction films. I think food and quality food will be with us forever.
“But we are seeing trends away from formal eating to snacking. People don’t eat at the same regular times that they used to 50 years ago. We’re seeing a rise in convenience foods, and greater speed of preparation. People aren’t prepared to peel the spuds as they used to.”
Nevertheless, Kappler admits he feels uncomfortable with the way the big retailers dominate the supply of food. “You can see it with asparagus or broccoli. Florets are required to be so many inches maximum in diameter, or asparagus can’t be more than so many quarters of an inch thick. All these parameters are dictated by the supermarkets to suppliers. I question if this is right, or good economics. Is this a helpful trend? I’m not convinced.”
When Premier Foods announced its takeover of Marlow Foods on Monday, June 6, the impact was immediate - the share price rose 6.93% in one day. It was a welcome piece of news for Premier, which is still struggling with the fallout from the Sudan 1 food scare. It was also a shrewd and decisive move into a traditionally vegetarian market for a business largely associated with traditional, no-nonsense English foodstuffs such as Typhoo Tea, Hartley’s Jam and Branston Pickle.
While Premier was announcing the £172m deal to the press in London, its non-executive chairman, David Kappler, was at Marlow Foods’ base in the north east of England, talking to the staff about the changes that could soon be taking place.
“Having been on the receiving end of a takeover bid, I know that for a lot of people it can be an uncertain time,” he says in an exclusive interview with The Grocer in the week after the deal. “They don’t necessarily know about the deal when it is announced, and there will be a lot of questions. If I can be there as a face for Premier, it’s the best use of my time. If I was working at Marlow, it’s how I would like to be treated. I’d like to see someone senior from the acquiring company take the time on day one to come and explain what’s happening.”
Kappler also reassured the Marlow Foods workforce that their jobs were in good hands. “In this instance, we can say that for the vast majority of them, their jobs will be secure, because it is a complementary business to Premier,” he explains.
Kappler believes the acquisition of the Quorn brand, which at £95m becomes the biggest in the Premier stable, makes the business relevant to a broader base of consumers looking for healthy foods. “I think it is right that a company looks for growing markets adjacent to, if not in, their core area,” he said. “Our products are mainly ambient rather than chilled or frozen. We need to expand ourselves into some faster-growing food markets, and hopefully buying Marlow Foods will bring us into some of those areas. That’s really important. There’s real growth potential there. It’s a nice business, but we don’t think it is as commercially developed as it could be. We’re confident we can develop it well.”
Kappler is also confident that the Sudan 1 incident will be fully resolved and, while he is unsurprisingly coy about the debacle, he insists that the issue of contaminants in the food chain is an issue for the food industry as a whole. He adds: “There’s a lot of fear and the facts are difficult to come by. The facts often do not lead to the solid black and white conclusions that people might like, whether it’s over GM crops or the debate about the effects of sugar. Even potatoes have been perceived to be both good and bad over the years. These arguments will be with us forever now, because a whole industry has grown up around it.”
The industry today is very different to the one in which Kappler grew up. After leaving his local grammar school in Lincoln, he joined Cadbury in Bournville, Birmingham as a trainee accountant in 1965. “For an 18-year-old it was a wonderful environment,” he says. “There were lots and lots of sporting activities.”
Away from the sports field, Kappler’s potential as a future leading light didn’t take long to emerge. In 1968 he won a prize when he came top in exams for the Chartered Institute of Management Accountants. “It made people sit up and take notice,” he says. “I was ambitious, reasonably bright and hardworking. And I picked up a lot of good working habits from the people I worked with.”
Kappler left Cadbury to become finance director of the Trebor Group from 1984 to 1989. The family asked him to help oversee the selling of the company and in 1989 Trebor was sold to Cadbury Schweppes. In 1995, he became the finance director of Cadbury Schweppes, a position he held for nine years.
Kappler relished the cut and thrust of striking big deals. One of the biggest was Cadbury Schweppes’ takeover of the Adams chewing gum business. The company was the second-biggest in the global chewing gum market, and the deal was worth a staggering $4bn, so big that the Cadbury Schweppes Group had to be re-financed for it to work.
The megadeals came to an end in March 2004, when Kappler retired from Cadbury. Now 58, he is a non-executive director for several companies, including HMV, Shire Pharmaceuticals and InterContinental Hotels.
Despite the Sudan 1 scare and anxieties about the fear culture that is developing around food, he remains confident about the future. “People do enjoy eating and preparing food,” he says.
“We’ll never get into the pill-popping scenario that you see in science fiction films. I think food and quality food will be with us forever.
“But we are seeing trends away from formal eating to snacking. People don’t eat at the same regular times that they used to 50 years ago. We’re seeing a rise in convenience foods, and greater speed of preparation. People aren’t prepared to peel the spuds as they used to.”
Nevertheless, Kappler admits he feels uncomfortable with the way the big retailers dominate the supply of food. “You can see it with asparagus or broccoli. Florets are required to be so many inches maximum in diameter, or asparagus can’t be more than so many quarters of an inch thick. All these parameters are dictated by the supermarkets to suppliers. I question if this is right, or good economics. Is this a helpful trend? I’m not convinced.”
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