How the cookie crumbles: United Biscuits (Part II)

For Part I of this history of United Biscuits, click here.

United Biscuits produces McVitie’s Digestives, Jaffa Cakes, Jacob’s cream crackers and Carr’s water biscuits.

Two Scottish biscuit manufacturers, McVitie & Price and Macfarlane Lang merged in 1948 to form United Biscuits, with a capital of £3.5 million. The businesses continued to trade under their respective names.

The Harlesden, London facility became the first fully-automated biscuit factory in the world in 1948, increasing output by 1000 percent.

McVitie & Price produced around 450 different products in 1939. This had been streamlined to about twelve major lines, with corresponding cost efficiencies, by 1959.

United Biscuits held nearly 70 percent of the digestive biscuit market by 1959. It was also a leader in the sale of Rich Tea biscuits.

United Biscuits was the largest biscuit manufacturer in Britain by 1962.

William Crawford & Sons, the largest privately-owned biscuit manufacturer in the United Kingdom, was acquired in 1962 in a mostly share-based transaction which valued the company at £5.9 million.

United Biscuits increased its capital from £9 million to £13 million in 1963. Hector Laing (1923 -2010) became managing director of United Biscuits in 1964.

United Biscuits entered the packaged cake market in 1964. The company had taken a 14 percent share of the market by 1968, winning market share from J Lyons.

William Macdonald & Sons of Glasgow was acquired in 1965 for £2.8 million in cash and shares. The firm had introduced the Penguin chocolate-coated biscuit in 1932. It was experiencing strong growth, and held almost 20 percent of British chocolate biscuit exports.

The United Biscuits subsidiaries were absorbed into a single operating company in 1965. The company announced plans to close four of its nine factories, and to greatly increase production at Glasgow and Liverpool in 1966.

The McVitie & Price factory in Edinburgh was closed in 1967 with the loss of 541 jobs. The Macdonald factory at North Cardonald, Glasgow was closed with the loss of 497 jobs. The Crawford factory in Leith was closed in 1970 with the loss of 703 jobs, and the Macdonald factory at Hillington, Glasgow was closed with the loss of 497 jobs. The factories that were closed had no room for expansion, and it made economic sense to rationalise production at a smaller number of larger sites.

The Macfarlane Lang factory at Tollcross, Glasgow was doubled in size at a cost of £2.3 million in 1969. The labour force was increased from 250 to 1,350. The factory would supply the Scotland, Northern Ireland and North of England markets.

The Crawford factory at Liverpool increased capacity by 50 percent following a £2 million investment in the 1970.

Sales of the McVitie’s brand doubled between 1962 and 1967, and McVitie’s had by far the most brand recognition in its category. The McVitie’s Chocolate Home Wheat (a chocolate digestive) was its highest seller.

Meredith & Drew was acquired in 1967. Following the acquisition, United Biscuits produced over one third of all biscuits consumed in Britain.

Kenyon, Son & Craven, with the KP salted peanuts brand, was acquired in 1968 in a share exchange which valued the private company at £3.5 million.

United Biscuits was the largest biscuit manufacturing company in Europe by 1969.

Hector Laing became company chairman in 1972. That year, the firm took over the biscuit interests of Cavenham, which included Carr’s of Carlisle and Wright’s of South Shields.

The South Shields factory was closed in 1973 with the loss of 823 jobs.

A total of four factories and four offices were closed in the early 1970s in a spate of rationalisation. The McVitie, Crawford and Macfarlane sales teams were merged in the early 1970s.

United Biscuits acquired Keebler, the second largest US biscuit manufacturer, in 1974.

United Biscuits employed 36,000 people in 1976. Its products were sold in 92 countries. The company controlled 41.6 percent of the British biscuit market, and boasted eight out of the ten highest selling products.

Not every venture was a success however, and United Biscuits was prepared to admit defeat when appropriate; in 1977 the company withdrew from the packaged cakes market.

By 1978 United Biscuits sold 75 million biscuits every day.

In 1980 it was announced that the former Macfarlane Lang factory at Osterley, West London would be closed with the loss of 2,000 jobs.

The Hobnob biscuit was introduced in 1985.

In an admission of defeat in the American snacks market, Keebler was divested for $500 million in 1995.

United Biscuits employed 22,500 people in 22 countries in 1999.

Jacob’s, a Liverpool biscuit manufacturer, was acquired from Danone of France for £200 million in 2004.

United Biscuits was acquired by private equity firms Blackstone and PAI Partners for £1.6 billion in 2006.

In 2012 the snacks division of United Biscuits, including Hula Hoops crisps and KP nuts, was sold to Intersnack of Germany, manufacturer of Pom-Bear crisps and Penn State pretzels, for £504 million.

In 2013 United Biscuits was sold to Yildiz Holding of Istanbul for over £2 billion to create the third largest biscuit manufacturer in the world, behind Mondelez and Kellogg.

From 2014 United Biscuits rebranded all of its sweet biscuits under the McVitie’s name, and all of its savoury biscuits under the Jacob’s name. McVitie’s gained the Club, Fig Rolls, BN and Iced Gems products from Jacob’s, whilst Jacob’s gained the Cheddars snacks products. The Crawford’s name was repositioned as a value brand, and products such as Family Circle were rebranded as McVitie’s.

 

2 thoughts on “How the cookie crumbles: United Biscuits (Part II)”

  1. Used to work in Edinburgh office of McViti e & Price for 8 years till 1960. All my training done there. Left to go to Canada for a few years! Shame British companies like that no longer around. We give away out future prosperity to other countries. But hey, someone makes money!!

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