Will Carter talks about the post-merger culture at UBUK with Liz Hamson

Last year was crunch time for United Biscuits. It could either watch its biscuits business continue to fight a losing battle against deflation and the rising cost of raw materials - or send in the reinforcements.
Unsurprisingly, the £1bn company decided on the latter and in December KP Snacks was merged with McVitie’s under the umbrella identity of UBUK, with KP MD Will Carter at the helm. In his first interview since taking the reins, Carter talks about the benefits of operating as a single entity, outlines the company’s new simplified strategy and explains why he believes cakes could be the new biscuits.
In its 2003 trading statement, United Biscuits reported sales of £1.3bn - up 1.8% on 2002.Unseasonally good weather, however, meant the biscuits business was struggling. “In 2003, it did have a poorer year,” admits Carter. “The category as a whole was faced by a fairly significant issue in a summer to beat all summers, which was never going to do it many favours.” Neither was continuing to operate as two separate divisions.
Cue a structural rethink. “We looked at how to generate maximum performance,” says Carter. “Some of the boundaries between the categories were blurring. We wanted to look at our presence in the wider snacks fixture. We also believed that in terms of our relationship with our traditional customers, there were going to be significant benefits in operating as one company, as one selling organisation.”
The first obvious benefit has been single customer accountability, says Carter. “We are able to have more strategic dialogue with [retail] customers to help them optimise their sales and earnings potential. And we can leverage our [shopper] insight better.”
As with any major structural shake-up, there have been personnel changes. McVitie’s UK MD Colin Hutchison, commercial director Gary Biggs and sales director Martin Perkin left, while there were new appointments in the form of Jon Eggleton and Sarah Heynen, from Bulmers, and Martin Totty, who joined as sales director from PepsiCo earlier in the year. But the big shift has been cultural. “It is surprising how separate businesses develop individual cultures even within the same building,” says Carter. “We had to be alert to the cultural change. My leadership style might be different from the people on the biscuits side of the business.”
By his own admission it is. A fan of a flat hierarchy and swift decision-making, Carter believes that the old biscuits division lacked focus. “They had good brands and a wealth of development ideas but the question is, what are the handful of things that work. We need to make sure our innovation is properly focused. Some of the ideas they had were fantastic but there weren’t enough big supported launches like McV a:m nor continuous innovation with the big brands.”
That said, the category was not helped by a harsh pricing environment. How does Carter plan to tackle the deflationary spiral? “The term may be an overstatement, though there has undoubtedly been some deflation in the heartland,” he says candidly.
“Simplification will make a difference. At the moment, biscuits have too many SKUs and there are too many big brands out of stock. Innovation will also make a difference. My definition of innovation is, let’s do fewer but bigger things.”
To that end, Carter promises “big improvements” to core brands in a similar vein to the Jaffa Cakes brand extension. In the wake of its success with Mini Jaffa Cakes and the Jaffa Mini Roll, UBUK has launched a range of McVitie’s cakes and flapjacks across key brands. “Sweet snacks are a burgeoning trend and an opportunity through convenience and foodservice outlets whether [we’re drawing on] our biscuit or cake technology,” says Carter.
There’s all to go for in foodservice, he adds, highlighting the appointment in October of Jennifer Kirkwood and Abi Gray to bolster its presence in the sector. “Ultimately the size of the pie runs to hundreds of millions of pounds - but we’re starting from a low base.”
And what about savoury snacks? Carter defends the decision in January to pull Shoks. “As a compact product in a compact pack format, Shoks confronted packaging conventions and through the development phase was exciting to the trade and consumer.” However, the downside was also linked to its compact format which, on a crowded fixture, adversely impacted visibility and perceived value for money.
Shoks’ failure has clearly not dented UBUK’s ambitions in the snacks category. Innovations in The Real McCoy’s, Mini Cheddars and Hula Hoops are expected to hit the shelves this month and the company has invested some £44m in a marketing programme for its core brands for 2004 - 30% more than last year.
Carter also wants to sharpen the company’s merchandising tactics. “We have a powerful range of sweet and savoury snacks to go but we haven’t optimised POP. Our biggest single opportunity is what happens when the shopper walks in.”
In the new look UBUK stable, there is no room for also-rans. Carter admits “there will be some culling of secondary and tertiary brands”. But, focus is the key to growth, he points out.
“Our top line target is accelerated growth. We are not expecting it to leap to 9%. But we do have to improve on low single digit figures. We’ve got great brands and we’ve got great people. There is a real opportunity to accelerate what we get out of them.”
Now that really would take the biscuit.