Northern Foods

Northern Foods was a British food manufacturing group headquartered in Wakefield, England. It began in 1937 as a family-run dairy business founded by Alec Horsley at Holme on Spalding Moor. During the Second World War, Horsley expanded the operation by acquiring local dairies, turning it into an important dairy business in the Humber region. The company was incorporated as Northern Dairies in 1942 and became a public company in 1956. The business initially benefited from the regulated economics of post-war milk distribution. Government-backed pricing through the Milk Marketing Board generated cash that Northern Dairies used to diversify beyond liquid milk. In 1972, the company adopted the name Northern Foods, reflecting its wider food-manufacturing ambitions. Expansion included interests in ice cream, cakes, flour milling, brewing, biscuits, pork products, prepared meals and other categories. A central turning point was the relationship with Marks & Spencer. Christopher Haskins, Alec Horsley's son-in-law, helped develop the relationship after Northern began supplying milk to a new M&S store in Belfast. The relationship expanded into yoghurt, prepared foods and desserts, including an early fresh trifle supplied to M&S. Northern Foods subsequently became a major producer for the retailer, while also supplying selected products to other customers. The company and M&S are widely credited with helping create the modern United Kingdom chilled-food category. Northern Foods later built the Fenlands Food Factory in Grantham specifically for M&S, describing it at the time as one of Europe's most advanced food factories. Under Nicholas Horsley and Christopher Haskins, Northern Foods assembled a broad portfolio. Acquisitions and investments included Park Cakes, Smith's Flour Milling, Hull Brewery, Fox's Biscuits and Pork Farms, alongside numerous smaller businesses. The group became a significant supplier of chilled prepared meals, sandwiches, cakes, biscuits and other supermarket foods. It also acquired Express Dairies from Grand Metropolitan in 1991. After the Milk Marketing Board was abolished in 1994, falling supermarket milk prices weakened dairy margins. Northern Foods demerged Express Dairies in 1998; the dairy business was subsequently acquired by Arla through a staged transaction completed in 2003. The company faced a difficult restructuring period in the mid-2000s. A takeover approach for Marks & Spencer in 2004 contributed to changes in M&S's supplier strategy, with production volumes distributed more widely among suppliers. Northern Foods issued four profit warnings. Patricia O'Driscoll initiated a major restructuring programme, supported by Stefan Barden, which involved selling or closing several operations and consolidating production. Businesses or activities affected included NFT's dedicated chilled distribution operation, Smiths flour milling, Park Cakes, Fletchers speciality bread and Pork Farms Bowyers chilled pastry. Some sites were closed, and production was transferred to other facilities or external manufacturers. Barden became chief executive in 2007. The company then reported a period of sales growth and margin improvement over 16 consecutive quarters, despite excess food-manufacturing capacity, volatile commodity costs and pressure from major customers. Nevertheless, Northern Foods' pension obligations became an increasingly serious issue. After the 2008 financial crisis, its pension scheme moved from surplus to a reported deficit of approximately £150 million. A proposed merger of equals with Greencore did not proceed. The pension fund supported the protections associated with an alternative offer from 2 Sisters PLC, which completed its acquisition of Northern Foods in May 2011. Northern Foods was delisted from the London Stock Exchange on 13 May 2011. The Northern Foods corporate identity ceased to operate as an independent listed group, although its factories and product activities continued within the 2 Sisters group. In 2020, the Fox's Biscuits brand, formerly associated with Northern Foods, was sold by 2 Sisters to Ferrero. Northern Foods is therefore best understood as a historically important British food manufacturer and corporate house rather than an active standalone brand.

Northern Foods originated in 1937 when Alec Horsley established a family dairy business at Holme on Spalding Moor. During the war years, the company bought several competing local dairies and became a substantial dairy operator in the Humber region. It was registered as Northern Dairies in 1942 and became a public company in 1956. Nicholas Horsley, Alec's son, joined the business as a trainee manager in 1958 and became a director in 1963. One early transaction involved acquiring a stake in the small Mr Whippy ice-cream business and selling it to Charles Forte two years later. The dairy business generated substantial cash under the post-war milk-pricing system administered through the Milk Marketing Board. Northern used that capital to diversify into broader food manufacturing. In 1972, Northern Dairies changed its name to Northern Foods. Christopher Haskins, Alec Horsley's son-in-law, joined the board in 1967, became deputy chairman in 1974 and took the chair in 1980. Haskins was instrumental in expanding the relationship with Marks & Spencer. What began as milk deliveries to an M&S store in Belfast developed into supplies of yoghurt, desserts and other foods. Northern Foods eventually became one of M&S's most important suppliers, helping establish the commercial model for chilled prepared foods in British retail. The group expanded through acquisitions and internal investment. Its portfolio included Park Cakes, Smith's Flour Milling, Hull Brewery, Fox's Biscuits and Pork Farms, as well as other food businesses. It developed major capabilities in chilled meals, sandwiches, bakery goods, biscuits and meat products. In 1986, Northern built the Fenlands Food Factory in Grantham at a reported cost of £8 million, dedicating the facility to M&S production. The plant was regarded at the time as an exceptionally advanced European food factory. Northern acquired Express Dairies from Grand Metropolitan in November 1991. The regulatory and commercial environment changed after the Milk Marketing Board was abolished in 1994, causing supermarket milk prices and dairy returns to fall. Northern Foods separated Express Dairies in 1998, and the dairy company later became part of Arla through a transaction completed in 2003. Haskins left the chief executive role in 2002 and was succeeded by Jo Stewart. Patricia O'Driscoll became chief executive in 2004. During this period, Marks & Spencer faced a takeover attempt from Philip Green and subsequently altered its supply arrangements, reducing dependence on some Northern Foods factories. Northern Foods issued four profit warnings and began a far-reaching restructuring programme in 2005. Stefan Barden joined in 2006 as chief executive designate. The restructuring included disposals of NFT, Smiths, Park Cakes, Fletchers and Pork Farms Bowyers, as well as site closures and production consolidation. Barden became chief executive in 2007. Over the following 16 quarters, the company achieved sales growth and improved margins despite excess industry capacity, raw-material volatility and customer pricing pressure. Its major remaining structural challenge was the pension scheme. Following the 2008 financial crisis, the scheme moved from surplus to a deficit reported at about £150 million. A proposed merger with Greencore was overtaken by an offer from 2 Sisters PLC. The pension fund favoured the protections in the 2 Sisters proposal, and the acquisition was completed in May 2011. Northern Foods was delisted on 13 May 2011, ending its life as an independent listed company. Its factories continued operating within 2 Sisters. In 2020, 2 Sisters sold Fox's Biscuits to Ferrero.

• 2020

  Fox's Biscuits sold to Ferrero

  [1]Northern Foodsen.wikipedia.org

  Ferrero acquired Fox's Biscuits from 2 Sisters.

• 2011

  Acquired and delisted

  [1]Northern Foodsen.wikipedia.org

  2 Sisters completed its acquisition of Northern Foods, which was delisted on 13 May.

• 2005

  Restructuring programme launched

  [1]Northern Foodsen.wikipedia.org

  Patricia O'Driscoll began a major restructuring involving disposals, closures and production consolidation.

• 1998

  Express Dairies demerged

  [1]Northern Foodsen.wikipedia.org

  The dairy business was separated from Northern Foods after deteriorating milk-sector economics.

• 1991

  Express Dairies acquired

  [1]Northern Foodsen.wikipedia.org

  Northern Foods bought Express Dairies from Grand Metropolitan.

• 1986

  Fenlands Food Factory opened

  [1]Northern Foodsen.wikipedia.org

  Northern Foods built a major Grantham factory dedicated to Marks & Spencer production.

• 1972

  Renamed Northern Foods

  [1]Northern Foodsen.wikipedia.org

  The company adopted a name reflecting its expansion beyond dairy.

• 1956

  Became a public company

  [1]Northern Foodsen.wikipedia.org

  Northern Dairies became publicly owned.

• 1942

  Northern Dairies registered

  [1]Northern Foodsen.wikipedia.org

  The growing dairy operation was formally registered as Northern Dairies.

• 1937

  Family dairy business founded

  [1]Northern Foodsen.wikipedia.org

  Alec Horsley founded the business at Holme on Spalding Moor in England.

A diversified British food manufacturer focused on supplying major retailers, especially Marks & Spencer, with chilled, prepared, bakery, dairy, biscuit and convenience-food products.

• Chilled foods

  Chilled prepared foods

  Northern Foods developed a substantial business in chilled prepared meals, sandwiches and desserts for British supermarkets. Its close relationship with Marks & Spencer made it an important participant in the growth of the modern UK chilled-food category.

• Biscuits

  Fox's Biscuits

  Fox's Biscuits was one of the best-known brands associated with Northern Foods' diversified portfolio. It later remained within 2 Sisters after the acquisition of Northern Foods and was sold to Ferrero in 2020.

• Cakes

  Park Cakes

  Park Cakes represented Northern Foods' cake-manufacturing activities, including production associated with Marks & Spencer. The business was sold during the restructuring programme in the mid-2000s.

• Dairy

  Express Dairies

  Express Dairies was acquired in 1991 as part of Northern Foods' dairy portfolio. It was demerged in 1998 and subsequently became part of Arla through a transaction completed in 2003.

• Meat and chilled pastry

  Pork Farms and Bowyers

  Pork Farms and Bowyers formed part of Northern Foods' convenience-food and chilled-pastry interests. The businesses were sold to private equity firm Vision Capital during the mid-2000s restructuring.

• 2011

  Sale to 2 SistersM&A

  Background

  Northern Foods faced a pension deficit after the 2008 financial crisis. A proposed merger with Greencore competed with an offer from 2 Sisters PLC.

  Action taken

  The company accepted the 2 Sisters offer, which was completed in May 2011.

  Aftermath

  Northern Foods was delisted on 13 May 2011 and ceased to operate as an independent listed group.

  Source

• 2005

  Radical operational restructuringStrategy

  Background

  Changes in Marks & Spencer's supplier strategy, excess manufacturing capacity and four profit warnings increased pressure on Northern Foods.

  Action taken

  The company sold several divisions, closed selected facilities and consolidated or outsourced production.

  Aftermath

  The restructuring was completed in 2006, and the business subsequently reported 16 quarters of sales growth and margin expansion under Stefan Barden.

  Source

• 1998

  Express Dairies demergerStrategy

  Background

  The abolition of the Milk Marketing Board in 1994 contributed to lower supermarket milk prices and weaker dairy returns.

  Action taken

  Northern Foods separated Express Dairies from the group.

  Aftermath

  Both Northern Foods and Express Dairies continued as separately listed businesses, with Express Dairies later becoming part of Arla.

  Source

• 1986

  Dedicated Marks & Spencer factory investmentStrategy

  Background

  Northern Foods' relationship with Marks & Spencer had expanded from dairy deliveries into prepared foods and desserts.

  Action taken

  Northern Foods built the Fenlands Food Factory in Grantham specifically for M&S production.

  Aftermath

  The factory became a prominent example of the scale and specialization of Northern Foods' retail-supply model.

  Construction cost. £8 million (1986)

  Source

• 1972

  Diversification beyond dairyStrategy

  Background

  Northern Dairies had accumulated cash from the regulated dairy market and was expanding into broader food categories.

  Action taken

  The company changed its name to Northern Foods and developed a portfolio spanning chilled foods, bakery, biscuits, meat products, brewing and other categories.

  Aftermath

  The change marked the transition from a regional dairy company to a diversified food manufacturer.

  Source

• 2020

  Fox's Biscuits sold to Ferrero[1]Northern Foodsen.wikipedia.org

  M&A

  The Fox's Biscuits brand was sold by 2 Sisters to Ferrero, separating the brand from the corporate group that had succeeded Northern Foods.

• 2011

  Northern Foods acquired by 2 Sisters and delisted[1]Northern Foodsen.wikipedia.org

  M&A

  2 Sisters completed its acquisition of Northern Foods, and Northern Foods was removed from the London Stock Exchange on 13 May 2011.

1. 1Northern Foodsen.wikipedia.org