20th century
The business was founded by Alec Horsley in 1937 as a family-run dairy business based in Holme on Spalding Moor.[6] During the war years, Horsley bought up many competing local dairies to become a major dairy force in the Humber region.[6] In 1942, the business was registered as Northern Dairies and became a public company in 1956. In 1958, Alec's son Nicholas Horsley joined the then Northern Dairies as a trainee manager, becoming a director in 1963. His first business success was to acquire cheaply, a stake in a small ice-cream company called Mr Whippy, which he sold on to Charles Forte for a high price two years later.
The dairy was generating large amounts of cash, as many dairies were at the time, due to the government backed guaranteed pricing created by the Milk Marketing Board, itself a legacy of post-war food shortages.[7] That cash was used to fund diversification into foods. In 1972, Northern Dairies changed its name to Northern Foods.[8] Nick Horsley's brother-in-law, Christopher Haskins found himself on a plane next to Marks & Spencer (M&S) executive who was setting up a new store in Belfast. M&S began buying milk for the store from Northern Foods, followed by yoghurt deliveries and food, including the first fresh trifle for M&S.[9] The contract developed into food sales to M&S that were eventually worth over half a billion pounds a year.[10] Northern Foods also made some non-competing products for other retailers. Since then its strategy has been to buy up and consolidate M&S suppliers.[9]
In 1986, Northern Foods built Fenlands Food Factory in Grantham, for £8 million, dedicated entirely to M&S.[8] At the time it was regarded as the most advanced food factory in Europe.[8]
Nick Horsley had successfully diversified the business, widening Northern Foods' portfolio into Marks & Spencer cakes (through Park Cakes), Smith's Flour Milling, brewing (with the purchase of Hull Brewery), Fox's Biscuits, Pork Farms and many other smaller firms. It was during this period that the company pioneered the market in chilled, prepared meals and sandwiches in supermarkets.
Nicholas Horsley took early retirement due to a rare genetic wasting disease, and by 1986, Haskins had become chairman of Northern Foods.[11] In November 1991, the company acquired Express Dairies from Grand Metropolitan.[12]
In 1994, the Milk Marketing Board was abolished and milk prices in supermarkets fell.[13] The loss of the high return on milk made a measurable impact on all dairy companies including Northern Foods. Northern Foods demerged Express Dairies in 1998 as the depressed margins were dragging the share price down of the overall group. Both businesses were listed to the FTSE 250.[14] Express Dairies was later bought by in a staged acquisition, finalised in 2003, by Arla Amba a Danish and Swedish co-operative.[15]
