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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.

 

How the cookie crumbles: United Biscuits (Part I)

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

Macfarlane Lang

James Lang established a bakery business at Gallowgate, Glasgow in 1817.

The firm became Macfarlane Lang in 1841 when Lang’s nephew, John Macfarlane, joined the business. An energetic and progressive manager, Macfarlane eventually assumed control of the business.

John’s son, James Macfarlane (1857 – 1944), joined Macfarlane Lang & Co in 1878. He was joined by his two brothers, George William and John Lang Macfarlane.

A large new factory, the Victoria Works, was established in Glasgow in 1880.

Originally bread bakers, the firm began to manufacture biscuits from 1885.

The firm became a limited liability company from 1904, but essentially remained a family business. James Macfarlane became chairman in 1908.

John Lang Macfarlane died in 1912 with a personal estate valued at £284,563.

Macfarlane Lang was one of the largest manufacturers of biscuits in Britain by 1914. A factory in Glasgow covered four acres, and a West London factory covered five acres, employing a total of 2,500 workers. Success was based upon high quality which stemmed from experienced management, skilled labour and strong investment in machinery.

George William Macfarlane, deputy chairman of Macfarlane Lang, died in 1938 with a personal estate valued at £415,479.

Sir James Macfarlane died in 1944, and left a personal estate of £172,180.

McVitie & Price

Robert McVitie (1809 – 1883) was advertising himself as a baker and confectioner in Edinburgh by 1856. He was a master baker employing six men, four boys and three women by 1871.

The firm was inherited by his son, Robert McVitie (1845 – 1910) in 1883. Charles Edward Price (died 1934), a former salesman for Cadbury, joined him in partnership in 1888 to form McVitie & Price.

McVitie & Price introduced the first digestive biscuit in the world in 1892.

The firm ranked among the second tier of British biscuit manufacturers by 1899, behind Huntley & Palmer and Peek Frean, but alongside Carr & Co.

McVitie & Price established a factory at Harlesden, London in 1901. Price retired in 1901, and Alexander Grant (1864 – 1937) was appointed general manager.

Robert McVitie died in 1910 with personal estate valued at £227,454. He died childless, and Alexander Grant became chairman and managing director of McVitie & Price.

McVitie & Price introduced the Jaffa Cake in 1927.

By 1936 McVitie & Price was one of the largest biscuit manufacturing firms in the world, with nearly 2,000 people employed at Harlesden, and more employed at factories in Edinburgh and Manchester.

The number of product lines at McVitie & Price had been reduced from 370 to ten by 1945.

Robert McVitie Grant (1894 – 1947), chairman of McVitie & Price, died in 1947 with a personal estate valued at £1,033,234.

That same year, Hector Laing (1923 -2010) joined the firm.

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.

For Part II of this history, click here.