This summer's purchase of the Wotsits brand by Walkers will bring major benefits to independent retailers and wholesalers as the new owner works its magic on the declining brand, according to Walker's president Martin Glenn. However he concedes the other element of the deal - its takeover of Golden Wonder's van fleet - could lead to an increase in competition for wholesalers.
Although the issue of the van fleet has attracted most attention since the deal, Glenn insists Wotsits was the much greater attraction. "We have huge respect for the Wotsits brand. Everyone knows the name and that's what we spent the money on ­ the goodwill component of the purchase price was pretty significant."
Although Walkers' parent company, Pepsico, has been highly successful in many other markets with its Cheetos brand, Glenn says it's been unable to make any impression in the UK, adding: "The only way we were ever going to do well in that market was to buy the Wotsits brand off them."
But Golden Wonder had been unable to develop the brand and Glenn says: "We believe if we apply some of the Walkers' magic in terms of significantly sustained quality increase and marketing, we can grow the brand in a way they could not and that's where the value of the deal is."
Walkers is gearing up for a "product quality-based" relaunch of the product early next year. It is building a new production line at its Coventry plant and production will be transferred there from Corby and Scunthorpe. He adds: "We had a good idea about what was needed in terms of making a great brand grow again and it starts and ends with the product."
Financially the van fleet was a minor part of the deal, but it stirred up a hornets' nest of concern among wholesalers. There was speculation that Walkers would bypass wholesalers and sell direct to retailers, but Glenn refutes this. "The vans are focused on an area where we and cash and carries haven't been able to get much distribution ­ licensed and leisure,". Besides, he says, it's not as if this is an additional 250 vans. Golden Wonder had been running the fleet and working in parallel with wholesalers for many years. There are no plans to increase the fleet, he adds.
He does concede that the fears were understandable given that Walkers has also been running a test in the south of England called Walkers Local, which involves 25 vans in a direct to store system. But he insists: "We have good relationships with the senior wholesaler trade. They are always going to be important to our business as is the whole impulse sector. We do not have any plans to bypass wholesale/cash and carry." He also points out that Booker and Batleys act as the depots for Walkers Local.
Other industry figures feared Walker's vans might undercut the wholesalers, but Glenn says he can prove they won't. "We have open and transparent price lists. We are not using predatory pricing here to squeeze any one out.
"Independent van operators who buy a certain number of cases get a certain price. It won't be as good as the price a Booker or a Palmer & Harvey gets because they buy more."
Walkers also has a sales force based at Booker depots, which Glenn describes as an expensive resource, but he says this demonstrates his company's commitment to the wholesale sector and to the independent sector as a whole.
Glenn is dismissive of a complaint by a smaller wholesaler who said that although Walkers was his biggest supplier, now that it had a van fleet it was also his biggest competitor. "It's the same as me and Tesco. Tesco is my biggest customer and my biggest competitor in terms of private label. It's no one's God-given right to have a monopoly access to the end customer."

Fleet will compete for some retail custom
And the van fleet will compete for some retail custom, he admits. Glenn estimates the split is about 85% licensed and leisure and about 15% overlap into retail, although this may vary in some local areas. Walkers is investing in its van team, providing them with new uniforms, training and merchandising tools. The aim is not only to sell product to the retailer, but to help them display it, and the category better, so they sell more.
Glenn says the Walkers Local test in the southern region has helped to grow the salty snacks market there by 9%. "Local test market retailers say they love it and they sell more. We will be chosen by retailers on the basis of service and what we can offer."
Before Walkers could go ahead with the Wotsits/van sales deal it had to be scrutinised by the Office of Fair Trading, and Glenn says he expected opposition. Competitors complained that it would make the most powerful player in the sector even stronger, but the OFT ruled that Walkers was not in a dominant position. Supermarkets also complained about a supplier becoming more powerful, but Glenn says the OFT had only recently scrutinised the buying power of the multiples and knew where the true balance of power lay in that relationship.
Nevertheless, the OFT said it had received complaints from competitors about certain trade practices and this riles Glenn. "We have scrupulously legal trade practices. We even have advice on good practices on selling the Walkers range on our intranet site."
With the deal concluded and Walkers already investing in its new purchases, Glenn is confident about the future: "We've sat down with all the key players to explain what we are doing and most are excited by the idea. They would like to see what Walkers can do to a big brand like Wotsits. If we can get it growing again there's money in it for everyone."