UK: SWEET BIRD TAKES WING - BLUE BIRD CONFECTIONERY. - Blue Bird used to be to toffee what Cadbury and Rowntree are to chocolate. After nearly 30 years of decline the brand is back, rescued by a Singaporean tycoon who mixes sentiment with shrewd business

by Jim Levi.
Last Updated: 31 Aug 2010

Blue Bird used to be to toffee what Cadbury and Rowntree are to chocolate. After nearly 30 years of decline the brand is back, rescued by a Singaporean tycoon who mixes sentiment with shrewd business sense.

Even in times of supposed economic recovery it is hard to find a British manufacturer preparing to double output this year. It is even more uncommon to find one planning to raise production tenfold in the foreseeable future. The fact that the company in question collapsed into receivership only a couple of summers ago provides the ingredients for a corporate recovery story with an exceptionally bitter sweet flavour.

Anyone over forty will associate the name Blue Bird either with slabs of toffee you broke with a little hammer, or with the tragic figure of Donald Campbell who lost his life on Coniston Water in Cumbria in the '60s trying to break his own 240mph speed record.

Blue Bird Confectionery used to be to toffee what Cadbury and Rowntree are to chocolate. Blue Bird's founder, Sir Harry Vincent, was in the same millionaire philanthropist tradition as those Victorian Quaker chocolate makers. He made every effort to care for his workforce and, along the way, sponsored first daredevil Malcolm Campbell in the '30s and then his son Donald in the '50s and '60s in their water speed record bids.

Sir Harry had started toffee making in the early 1890s from his home in Birmingham and travelled round on his bike selling his tasty slabs door-to-door from his saddle bag. In 1895 a proper company was formed when he bought the old Lion Works, an iron and steel plant in central Birmingham, and converted it for toffee making.

Such was his success that, by 1925, he decided to move to a greenfield site in theWorcestershire countryside to the west of the city. Here he bought 160 acres of land and created 'Hunnington', a model industrial village community. It consisted of a factory, homes for the workforce, two farms supplying milk for the toffee making and fresh meat and vegetables for the villagers.There was a shop, a post office and even a railway station to link the villagers to family and friends back in the Big Smoke. Cricket pitches, bowling greens and other 'fringe benefits' were all part of the industrial idyll Sir Harry created. It cost £250,000 - over £7 million in today's terms.

Vincent the visionary not only cared for the workforce but also had radical ideas for factory design which, even in the 1990s, still seem progressive. The plant he had built has production lines organised so that raw materials go in at one end of the building and the finished product comes out the other. All production is on a single floor and all processes flow in the same direction to maximise space, energy and time. Sweets leaving the plant have been manufactured less than 24 hours earlier. Even the roof was specially designed with north facing skylights running its length so that the sun never shines directly into the plant. This provides a cool light and pleasant ambiance for the workforce.

In the company's heyday, before the war, Blue Bird achieved world-wide sales of 30,000 tonnes per annum - equivalent in today's values to over £100 million at the retail level. At one time it exported its products to more than 70 countries, building its reputation on the slogan 'Blue Bird - Britain's BestToffee'.

Sadly, after Sir Harry's death in 1952, the company began its decline. His son, Eric, took Blue Bird public a year later but after his death in 1963 the company fell prey to the 'asset strippers' who could see the potential in disposing of the village community assets while retaining the manufacturing unit. Control eventually passed to Edward Nassar, a Swiss-based Lebanese confectionery magnate, who ran the company on a much reduced scale until it was acquired by Hillsdown Holdings in 1986. Gradually the farm, houses, shops and playing fields were either sold or shut down. Dr Beeching was responsible for the closure of the railway station.

Hillsdown committed the ultimate depredation in dispensing with the Blue Bird brand altogether in the UK and replacing it with its other brand, Needlers. The Blue Bird name, however, lived on in overseas markets and that in the end proved to be the company's slender lifeline. After various attempts at revamping the business, Hillsdown decided to pull out of confectionery altogether - selling Needlers to a Norwegian confectionery group and the Blue Bird operation to its management.

Two years ago Jack Chia, a seventy year old Singaporean tycoon on a visit to Britain, read in the Financial Times that Blue Bird's bankers had called in the receivers after sky-high interest rates and lack of finance had wrecked the management buy-out plan.

Geoffrey Hall, who runs the Chia organisation's UK interests, recalls how his boss immediately cancelled all his appointments and ordered Hall to drive him to Hunnington. 'The company had only been in receivership about three days,' Hall says. 'But Mr Chia moved very quickly. During the negotiations in the boardroom I left the meeting to go to the toilet, and when I came back I found a deal had been done.' There is little time for sentiment in business, but Chia had a nostalgic attachment to the Blue Bird name. The 'Britain's Best Toffee' image still lingered strongly back home in Southeast Asia - places such as Malaysia,Thailand and Singapore still regularly imported a lot of Blue Bird product. But sentiment coincided with shrewd business logic in prompting him to attempt the rescue of the business.

The company was by then a shadow of its former self and UK sales had dwindled to less than £1 million. A workforce, once over 600, was down to under 70 and a plant that had produced 30,000 tonnes of sweets a year was by then producing under 3,000 tonnes a year. But Chia could see there was potential to turn the company round. He could restore its fortunes in the UK and make it a bridgehead for entry into European markets for the confectionery products coming out of Chia's own factories in Southeast Asia. His group of 180 operating companies includes interests in property, publishing, engineering and hotels as well as a confectionery business with four factories in Southeast Asia and one in Australia.

Today Hunnington is coming alive again and humming with expectation at the prospect of the big leaps in production ahead. Chia has installed Bruce Murray as general manager of the factory.

Though only 15 minutes drive from the centre of Birmingham, the factory still retains its pastoral setting, surrounded by farms, cricket pitches, tennis courts and bowling greens. Above the imposing entrance with its Doric columns the name Harry Vincent Limited is engraved in bold letters in the stone. None of the subsequent owners ever had the gall to erase it. There is a scent of liquorice in the air.

Inside, the fabric of the factory has hardly changed since the '20s, apart from the installation of the latest in automated machinery including equipment that can wrap brazil nut toffees at the rate of 1,000 a minute. But the suite of offices overlooking the shop floor is eerily empty - mute witness to the way the business has shrunk over the years. At the end of a long, tiled corridor, Bruce Murray sits alone in his office, planning his next move to restore the old glory days of toffee making.

It is immediately clear why Chia chose Murray to revive the business. A jovial enthusiast in his early forties, he now lives in a flat above the Hunnington village shop during the week. He began his career in nearby Bournville as a management accountant with Cadbury. He worked there for 12 years, first on confectionery and then in the tea and foods business. In the '80s he was a general manager for Nestle in Southeast Asia, based in Singapore.

'Chia wanted someone who understood the way they do business in Singapore as well as someone in the confectionery business,' he explains. Murray's immediate boss, Geoffrey Hall, is responsible for all Chia's businesses in the UK including a publicly quoted financial-cum-engineering group called Boustead. But Murray also has direct access to Chia and his right hand man, John Lim. 'It is a very lean organisation at the top and all I need to do is have a word with Geoffrey Hall or John Lim and a decision is made more or less immediately,' Murray points out.

Lim has just visited the plant and given approval for another £250,000 capital spending on air conditioning and new machinery.

Blue Bird now has a range of 18 varieties of traditional toffees and boiled sweets, and in July the first production runs began for 'Hi-Sour', an 'inscrutable' oriental confection imported from Chia's Asian plants. Its initial sharp flavour of citric acid provides a taste contrast to the sweet apple, lemon or jam flavour inside. Murray says: 'They are a bit of a masochistic sweet that makes your ears pop but they have sold successfully as a fad sweet for children in the US and in Australasia as well as in Asia.' Individually wrapped in a laminated, heat-sealed foil pack to resist humidity, they have sold well on test market in the UK and Murray is now getting export orders from Sweden, Spain, Holland and Ireland. In the New Year he plans a TV advertising campaign to promote Hi-Sour more aggressively.

Says Murray: 'Chia could clearly see the potential of making Blue Bird part of his organisation. With a product like Hi-Sour we can drop it on the UK market without having to spend hundreds of thousands on market research. We can test market other products from the Asian factories and then, if they work, produce them over here for the European market. Chia has the capacity to make everything from chewing-gum to compressed tablets like strong mints.' Determined efforts are being made to win back market share lost during the lean years. 'We believe our rivals, Walkers Confectionery, have pinched about 600 tonnes a year of our toffee slab market and we intend to go out aggressively and get it back,' Murray says. A cut-price war is now breaking out. Walkers sells four toffee bars - with a hammer to break it - for between 230p and 250p a pack. Blue Bird now sells three bars for 126p and throws in the hammer free. 'On a gramme for gramme basis we are about 35% cheaper,' Murray claims.

Chia almost certainly realises that Blue Bird can never be a real threat to Cadbury Schweppes's Trebor Bassett which dominates the market for sugar confectionery in the UK. 'But we see no reason why, as a niche player, we should not steal one or two per cent of the market. That is £20 million and equivalent to nearly four times our present turnover,' Murray points out. 'We could then become extremely profitable.' Geoffrey Hall is more cautious: 'It is taking a little longer than anticipated to get the business viable but then it is never easy winning back markets you have lost.' He does not, however, completely dismiss out of hand Bruce Murray's suggestion that Blue Bird, once it is operating profitably on an expanded scale, could again become a publicly quoted company. Half a dozen companies in Jack Chia's empire are publicly listed, including its Australian confectionery offshoot and its UK manufacturing business, Boustead. 'That would be quite a feather in our cap if we could achieve it,' Hall says.

Murray still seethes quietly over the long decline in Blue Bird's fortunes before the new regime was installed. 'We lost well in excess of 90% of our market share over 30 years for one reason or another,' he says. 'But our export market - we sell three quarters of our turnover abroad - remained constant. While the confectionery trade in the UK saw all the shenanigans going on here, the export customers simply pushed through their orders by fax and telex and they continued to be met.' By the end of this year Murray hopes to have doubled overall sales to £12 million. 'It is the story of rebuilding a lost brand,' he says. 'Really it had not been advertised and promoted at all until about six months ago when we began some trade press advertising. We will not hit the consumer market until we have got the product back on the shelves.' Murray does not believe the company can be as strong and financially self-sufficient as Chia insists until it has re-established a reasonable strength in the home market. 'We need a strong UK base,' he stresses. 'We have done quite well in export markets but again, it is the tip of a potential iceberg.' The huge advantage which Blue Bird has is a production plant designed with a logic and vision at least 50 years ahead of its time. In Murray's view it is 'capable of producing 10 times its current output with the equipment it already has installed. We will virtually double output by the end of this year and still have dramatic potential to increase still further.' Obviously, if that happens, a plant which is now at break even can become highly profitable and capable of generating funds to finance a more significant marketing effort for the future. The ever dwindling workforce who stayed loyal to the business through the lean years are already working extended shifts. Factory manager Peter Menzies, the only remaining member of the failed management buy-out team, expects the company to go on to double shifts shortly. It will mean that for the first time in decades the workforce will start to grow again.

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