With a two-litre tub of vanilla and some 'creative pricing' Tudor Dairies has taken a large scoop of the British ice-cream market.
Neil Smith may have spent the best part of his working life in New York, but his recollection of the day he bought his own company, back in the old country, is still doggedly coloured by that most hardy of British perennials: the weather. 'I was staying in a little guest house up the hill,' gestures Smith, abstractedly, 'and I woke up the day before the MBI (management buy-in) actually came through to find nine inches of snow on the ground. By the time the great day itself arrived, we were completely snowed in. I had to plough my way across the fields to get here at all. A foot and a half of snowdrifts', Smith grunts, 'and I'd just bought myself an ice-cream manufacturers.' And that was the good news. The day before, on 10 February 1991, interest rates had peaked at 16% - not, perhaps, the ideal circumstances for a buy-in ingeniously (or so it had seemed) financed entirely on bank debt rather than institutional equity. Then there was the little matter of raw materials for Tudor Dairies' - for such was the name of Smith's happy acquisition - main product line. Thanks to the collapse of sterling against the Deutschmark and the gymnastic cavortings of the EC agricultural green pound, the price of raw materials for non-dairy ice-creams had risen by 50% more or less overnight. A dark moment? Smith snorts: 'Before I found Tudor, I'd turned down a used tyre company and nearly put together what would have been the biggest MBI ever done out of Manchester, a £39-million car alarm business,' says Tudor's new chairman. 'I'd been living on my savings for two years while I looked for something to buy. After six months, friends say, "Is everything OK?" After a year, they stop asking. What do you think?' Galling enough for mortal man, but wormwood for a Harvard Business School graduate and ex-New York McKinseyite such as Smith. Before you reach for the tissues, however, consider the rest of the story. Within six months of buying Tudor Dairies from food giant UB Ross Young, the firm had converted its typical operating losses into a £500,000 profit. It also found itself in a position to pay off its buy-in debts - 'I'd said to Ross that I would like them to leave some money in the business,' notes Smith, with a gift for euphemism of which you shall hear more later - and had managed to get its product into all the major British retail food multiples, including Asda, Sainsbury and Iceland. That year, Tudor's turnover topped £5 million. The latest figures will show that to have more or less doubled, making it the fourth biggest ice cream manufacturer in the UK.