UK: BANGERS AND CASH. - Mr Lazenby's premium sausages are filled with quality ingredients, and contain no beef. But holding on to market leadership needs hefty investment.

by Charles Darwent.
Last Updated: 31 Aug 2010

Mr Lazenby's premium sausages are filled with quality ingredients, and contain no beef. But holding on to market leadership needs hefty investment.

Pathogens? Just don't talk to Richard Lazenby about pathogens. Been there? Done that? Lazenby's got the T-shirt. 'I've nearly been wiped out twice,' he says, with the casual air of a big-game hunter recounting particularly sticky moments out on the veldt. 'First time was listeria, back in July 1989, which killed off our pate. Then there was the big salmonella scare four months later, and that did for black pudding and all our cooked meats. There was basically nothing left. It was a bloody awful year.' Now - just when things seemed to be chugging along nicely on the microbe front - Lazenby and his colleagues in the British meat industry are having to face down a bug that makes mere bacteria seem positively cuddly: the prion that is responsible for BSE in cows and, possibly, Creutzfeldt-Jakob Disease in humans. To say that for Lazenby this situation has called for a certain amount of brushing up on crisis management skills is to understate the case just a little.

Curious, then, that Lazenby's ruddy face is creased not so much with worry as with evident good humour. If you are a sausage eater, Lazenby's ear-to-ear grin will already be familiar to you. It has beamed out at a carnivorous public from the packaging of his eponymous brand of bangers since 1989: first locally, in the Teesside area, and then nationally in Asda, Safeway, Co-Op and Waitrose all over the UK. In a daring reversal of the time-honoured dictum, Lazenby has put his mouth where his money is. If there is such a thing as the face of British sausage-making, Richard Lazenby is arguably it.

Why, then, does his portrait not now have tears coursing down its roseate cheeks? Lazenby ponders the question for a moment and beams the more broadly. 'Because our sales have gone up 9% overall in the last two months,' he says. 'We did £7.1 million worth of business last year, and that's going to top £10 million in 1996, BSE or no BSE. What have I got to cry about?'

Lest Mr Lazenby's sales figures suggest that mass suicide may be a hitherto unsuspected symptom of BSE, it should be pointed out that the outbreak of Creutzfeldt-Jakob Disease offers (admittedly rather extreme) proof of something the company's MD has been saying for years: 'The sausage industry in this country needs to clean itself up'.

Lazenby's statement is meant entrepreneurially rather than morally. If the large-scale Yorkshireman is known to the world as Mr Sausage - and what at first sight appears to be a gilded marital aid on his desk turns out to be this year's Sausage Appreciation Society's equivalent of an Oscar - his triumph has been of a particular sort. Having, it seems, already invented the first British a la carte bar menu at a hotel restaurant in Harrogate in the 1960s ('It was a way of using up leftover lobster,' beams a cheerfully immodest Lazenby), the one-time chef set about saving the British sausage from the unfortunate decline into which it had fallen in the same decade. 'When I was a lad,' says a misty-eyed managing director, 'bangers were great. But by the time I became a chef, there wasn't a quality sausage available on the market. During the '60s, there had just been more and more pressure to mass-produce, to sell on price.' This same pressure was, of course, the cause behind British dairy farmers feeding their cows on a pelletised version of their ovine kin, a habit that may have been responsible for the food industry's latest crisis. Whatever the truth of that particular matter, however, both tendencies were, ironically enough, to bequeath Lazenby a commercially useful inheritance.

Starting in 1983 with a lone Dicker-filler (a hand-operated sausage machine, should anyone imagine otherwise), Lazenby set about 'recreating the British premium sausage market from scratch'. 'The problem was the only sausages you could get in supermarkets were selling at 49p to 69p,' recalls a feisty Lazenby. 'Ours were going to go for 99p to £1.05, and all the multiples said, "There's no such thing as sausages at over £1". But we were determined that they were going to be full-blown, profit-making products from the start.' It took five years of sticking to his guns before Hinton's, a local Teesside chain, caved in and agreed to list Lazenby's product.

'It was the first time sausages had sold at over £1,' notes a happy bangeriste.

'It was also at that point that we hit on the idea of creating me as a brand.' Thus it is that, since 1989, every packet of the company's sausages - 100 tons of them a week at peak output - has carried a picture of their smiling creator, his head squeezed into a pork-pie hat.

Whether you choose to interpret what happened next as evidence of good luck or good management on Lazenby's part, the fact of the matter is this: at the very bottom of the Thatcherite recession, demand for premium bangers suddenly skyrocketed. Whether sausages were the ultimate comfort food - allowing yuppies to retreat into the security of the nursery even as they watched the negative equity on their Docklands flats expand exponentially - or whether Mr Lazenby's newly exoticised product (flavours include Cajun, tandoori and venison with orange) allowed a battered British public to feel it could still afford to live high on the hog's back, the company's sales figures grew in inverse proportion to the national unemployment totals.

'In 1983, you'd have been lucky if the entire premium market totalled £5 million a year,' says Britain's sausage saviour. 'It's now worth over £100 million in an overall annual sausage market of £400 million. It's also the only section of that market that is still growing year on year.'

None of this, however, quite accounts for the continuingly unfurrowed nature of Lazenby's brow. And yet operating in a business whose misfortunes have been played out night after night on prime-time television might be reasonably supposed to make the problems involved in finding a dash of benzene in your bubbly water seem positively trivial by comparison.

Apparently not. 'Just because you call your product a premium sausage doesn't mean that it really is one,' says Lazenby in a low voice. He goes on to explain that Mr Lazenby's has played it straight, paying for quality ingredients, but that others have not, and it is they who are now getting their come-uppance.

'We may make more sausages now than in 1989 but they are still exactly the same product as came out of my Dicker-filler all those years ago - 100% pork, natural skins, real flavourings.' Others, meanwhile, have thought it sufficent to price their sausages as if they were premium goods. 'Let me tell you a story,' begins Lazenby. 'When x (he names a well-known meat products giant) introduced their so-called premium sausage two years ago, they put it on the market at 99p. Nobody bought it. They thought, "By 'eck, what do we do now?" Then they put it back on at £1.39. It sold like hotcakes. People assume expensive sausages are good sausages.'

One of the things which separates the (as it were) sheep from the goats in British premium pork sausage-making is whether the makers in question choose to take advantage of a legal right to include up to 10% of beef in their product - a sleight of hand that does, however, have to be confessed on its labelling. The fact that Mr Lazenby's has always sniffed at such chicanery means the company suddenly finds itself in the happy position of being able to stamp its packaging with what may be the three most commercially useful words in modern British history: 'contains no beef'.

(What happens to those unfortunates who have been slipping defunct milkers into their sausages? 'They're in the shit,' suggests Lazenby, struggling to suppress obvious Schadenfreude.)

The company has enjoyed other BSE spin-offs, too. If an immediate decision to drop the line of beef hamburger patties which had previously accounted for 2% of Mr Lazenby's turnover might have hurt, the pain was soothed by the company's most recent innovation, the porkburger. 'Sainsbury's has gone mad on them,' says Lazenby, in an untimely choice of phrase. 'It's one of the main reasons we've managed to increase our sales even though we've dropped an entire product line.'

Not all has been good news from the world of the mad cow, however. For one thing, the sudden desirability of pork on the British market has pushed prices through the roof. So, too, has the increased cost of abattoir slaughtering caused by the tightening of Government regulations. 'This is not the time for price rises,' says an uncharacteristically sombre Lazenby. 'But we've just had to take it.'

The reason for this rapid disappearance of Lazenby's smile lies, oddly enough, with his company's expanded customer base, or, rather, with the continuing war between its various parts. 'The real problem that we're having to cope with is margin erosion,' he says in a sudden outburst. 'The major multiples keep saying to us, "Sorry, but you're going to have to cut your prices somehow". I know for a fact that one major British supermarket chain is making margins of 45% on our products - and 90% of that is profit - but it's always the supplier who ends up having to carry the can.'

The timing of all this for Mr Lazenby's could scarcely be less opportune. If the company has seen average year-on-year growth rates in the order of 70% throughout the '90s, they have nonetheless been bought at the cost of heavy investment. 'We've spent over £2 million on our plant in the last three years alone,' says Lazenby, 'and that's likely to continue.' This is not entirely a by-product of entrepreneurial folie de grandeur. The adage that number two has to try harder may be an old one, but it is not always true. 'You see the same problem happening again and again in niche markets like ours,' says Lazenby.

'The niche just gets too big. We want to grow our sales to £20 million a year by the end of the decade. To do that we will have to retain our current market share of about 10%, which means that we have to remain the market leader, which means that we have to grow to push the market forward, which means heavy investment.'

The trouble with this is the form that investment is likely to take.

The company's profits have certainly grown (from £75,000 in 1991 to over £300,000 last year) but not sufficiently to underwrite the kind of expansion Lazenby has in mind. Even with the happy irruption of Messrs Creutzfeldt and Jakob into the drama, banks are unlikely to satisfy all of Lazenby's investment needs for the next four years. Britain being Britain, this will most probably mean finding some other form of backing, which in turn suggests those two words so dreaded by independent entrepreneurs of Lazenby's stamp: equity participation.

Nor is his distaste for such a departure simply a symptom of Yorkshire pig-headedness. In brand terms at least, Lazenby's face has been his fortune.

Whatever the reality of the matter (the company's sausages are actually produced in a desperately hi-tech plant on the Teesside Industrial Estate), the fact is that Mr Lazenby's sausages need to look as though they come from a butcher's shop in the Dales. 'We have to grow,' reasons its MD, eyeing his sausage Oscar with a frown, 'but we also need not to lose the personal touch. How do we do that? You tell me.'

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