Category Archives: Food

Drink, Food, Hospitality, Retail, Tea

Roaring trade: a history of J Lyons (1894 – 1945)

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How did J Lyons become the largest catering business in the world within 30 years?

J Lyons is established, and the first tea rooms are opened
Barnett Salmon (1829 – 1897) and Isidore Gluckstein (1851 – 1920) established a successful chain of tobacconists.

Montagu Gluckstein (1854 – 1922), a salesman for the firm, lamented the poor state of catering at trade exhibitions. He suggested that the public could be provided with a better offer than beer and sandwiches. Gluckstein and Alfred Salmon partnered with Joseph Lyons, a distant relative, to form J Lyons & Co with a capital of £5,000. J Lyons & Co successfully provided catering for the Newcastle Exhibition of 1887. Contracts for other exhibitions soon followed.

J Lyons & Co was established as a public company with a capital of £120,000 in 1894. The original stakeholders were Montagu Gluckstein, his brother Isidore Gluckstein, brother-in-law Barnett Salmon (maternal grandfather to Nigella Lawson) and Joseph Lyons. Montagu Gluckstein was the de facto chairman of the business.

The first Lyons tea shop opened in September 1894 at 213 Piccadilly. It had 200 seats and a £30,000 lease. After a year the shop had made a profit of £11,400, and the company was able to pay a dividend of ten percent.

The first Lyons Tea Room was sited at 213 Piccadilly
The first Lyons Tea Room was sited at 213 Piccadilly

The early tea room exteriors were enticing and extrovert, and the interiors were often glamorous, and intended to evoke the great Victorian exhibitions and Parisian cafes.

The Lyons tea shop girls went on strike in protest against low wages in 1895.

J Lyons establishes Cadby Hall
Cadby Hall was opened in Hammersmith to centrally produce baked goods for the company’s 17 tea shops from 1896. There were 37 tea shops in London by 1900, and expansion had begun in the provinces, with six branches in Manchester, four in Liverpool, and two in both Leeds and Sheffield.

Quality was good and prices were reasonable. The tea rooms were particularly popular throughout the daytime with lower middle class office workers. Cinema and theatre-goers patronised the chain on an evening.

The first Lyons Corner House was opened on Coventry Street in 1909. The Corner Houses were much larger than the tea rooms, with a greater appeal to the middle classes. Live bands and an informal atmosphere helped to cement their popularity. The Coventry Street outlet became the Lyons flagship outlet, and seated 2,000 diners on multiple floors. It was the largest restaurant in the world. A second Corner House, capable of seating 1,200 diners, was opened at the Strand in 1915.

J Lyons was one of the largest caterers in the world by 1911. Half a million meals were served every day through 200 shops and restaurants. The company employed over 12,000 people, including 2,000 people at Cadby Hall. The Cadby Hall works covered ten acres and included sixteen bakehouses, five cold storage rooms and three butchers’ shops.

20,000 people were employed by 1913. J Lyons was the largest baker in London, the largest tea merchant in the world and the largest restaurant operator in the world.

J Lyons dismissed all naturalised German and Austrian employees from its staff in 1914.

J Lyons also expanded into hotels, building the Regent Palace Hotel in London at a cost of £600,000. Opened in 1915, it was the largest hotel in Europe, with 1,028 bedrooms.

Lyons tea was far and away the market leader by 1915: five million packets were sold every week by 160,000 shopkeepers. The company accounted for one in four cups of tea sold in London.

Lyons had a capital of over £2 million by 1917.

Tea, coffee, bread, cakes, ice cream and groceries which had originally been produced for the tea rooms began to be sold directly to the customer, all manufactured at the company’s Hammersmith site.

In 1918 Lyons acquired two leading packet tea companies, positioned second and fourth place in the market respectively: Horniman of London and Black & Green of Manchester. The acquisitions were intended to increase Lyons’s market share in the North of England: Horniman was strong in Yorkshire and G&B strong in the North West.

The company had a share capital of £3.5 million by 1919. By this time Lyons was likely the largest catering company in the British Empire. There were 182 tea shops by 1919, making it easily the largest chain of its kind in the country.

Largest caterer in the world; Greenford plant is established
Cadby Hall was struggling to meet demand by 1919, so Lyons acquired a 30-acre freehold manufacturing site at Greenford, on the outskirts of London. Lyons opened the largest tea packing plant in the world there in 1920. Coffee, cocoa and confectionery production were also transferred to Greenford. It was the sixth largest manufacturing site in Britain.

J Lyons was the largest catering business in the world by 1921. Cadby Hall boasted the largest bakery in the world.

The Trocadero Restaurant was acquired in 1921.

There were over 22,000 employees by 1922. There were 160 Lyons tea shops in London, and a further 50 throughout Britain.

It was calculated that seven million people drank Lyons tea each week in 1922.

Lyons began construction on the Cumberland Hotel at Marble Arch, the largest hotel in Europe, in 1922. It had 1,500 rooms and a Corner House.

The Coventry Street Corner House was extended in 1923 to create what was likely the largest restaurant in the world, with seats for 4,500 diners. It also boasted the largest chocolate shop in the world. It was open 24 hours a day.

An interior view of the Lyons Corner House on Coventry Street in 1942

Ice cream manufacture at Cadby Hall had reached the mass production scale by 1923.

Lyons was the 20th largest company in Britain by 1930, with a market value of £12.1 million and 30,000 employees. It was the largest catering company in the world. Over ten million meals were sold each week. Lyons held 14 percent of the packet tea market, with over 1.25 million packets sold every day. 600,000 Swiss rolls were sold every week.

The teashop chain continued to grow strongly until the onset of the Great Depression. Teashop losses between 1934 and 1938 totalled £374,000. Despite this, due to its manufacturing and hotel concerns, the company remained the largest catering company in the world in the latter half of the 1930s.

Lyons directly employed over 42,000 people by 1937.

Lyons produced 3.5 million gallons of ice cream in 1939.

Lyons had 253 tea rooms by 1939. Due to wartime labour shortages, self service was introduced to the tea rooms from 1941, and rolled-out across the chain from 1945.

Part II of this post can be found here.

Confectionery

Viennetta: the first branded ice cream dessert

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A look into the background of Wall’s Viennetta.

Viennetta is produced at the Wall’s factory in Gloucester. Wall’s is owned by Unilever, the Anglo-Dutch consumer goods giant. Unilever is the largest producer of ice cream in the world, and also manufactures the Magnum, Solero and Ben & Jerry’s brands.

Viennetta

Sales of Viennetta totalled £328 million worldwide in 2013, according to Euromonitor.

Viennetta is an ice cream imitation of the French millefeuille cake. Unilever saved money by adapting the product from a Belgian Cornetto recipe. The packaging was based on a German Christmas log manufactured by Langnese, another Unilever subsidiary. There are no imitations of Viennetta because the process by which it is produced is protected by patent.

Viennetta
A French millefeuille cake

Viennetta was introduced from 1982. It was originally sold only in the United Kingdom, and was a Christmas-only special. The launch was successful, and Viennetta was introduced as a year-round product from 1984. Such was its popularity that Unilever did not have to lobby supermarkets to stock the product, but instead the supermarkets lobbied them. Unilever was consequently able to achieve excellent margins on the product, which the supermarkets often sold as a loss-leader.

According to Professor Geoffrey Jones, Viennetta introduced the concept of the branded ice cream dessert. For the first time, ice cream was the main item of a dessert, and not just an accompaniment to something else on the bowl or plate.

Perhaps the product’s vaguely European-sounding name was considered sophisticated in the early 1980s. Viennetta’s star may be rising worldwide, but it has a reduced presence in its native UK. In 2014 value sales were far below what they were in 1990, not even accounting for inflation.

Food, Retail

A slice of history: Bakers Oven

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Bakers Oven was the largest bakery chain in Britain.

Greggs is a fast food chain with more outlets in Britain than McDonald’s. Specialising in value and convenience, outlets sell sandwiches, but remain best known for “treat” food: sausage rolls, pasties, vanilla slices etc.

Greggs’ dominance in the UK was established when it acquired Bakers Oven, its major rival bakery chain, in 1994. Bakers Oven was about 20 percent more expensive than Greggs, had more of a focus on in-store “baking” and typically offered substantial seating, which Greggs usually lacked.

Bakers Oven
Bakers Oven was a concept developed in 1976 by one of the largest British bread makers, Allied Bakeries. Allied Bakeries also owned other bakery chain fascias, with names such as City Bakeries, Martins and Strathdee, and boasted of operating a store on almost every British high street. ABF owned many prime high street sites; a legacy of local bakery chain acquisitions. They had first attempted to create a nationwide bakery chain in 1968 with the Lite Bite shops.

The claim that the first Bakers Oven was located in Barnard Castle, Durham is untrue. The location was previously operated by Carricks, a Newcastle upon Tyne bakery chain. and it was not rebranded to the Bakers Oven name until 1989.

Bakers Oven rode the rise in demand for healthier bread in the late 1980s, although it never matched the quality of genuine bakers’ produce. It became the largest bakery chain in the UK, however by the early 1990s it had began to consistently lose money. After 100 stores were divested, Bakers Oven blamed the rise of supermarket bread sales for its struggles.

The UK’s third largest bakery chain, Three Cooks, was also owned by a large British bread manufacturer, RHM (formerly Rank Hovis McDougall). The acquisition of Gladdings of Coventry took RHM to 300 outlets by the early 1990s.

Greggs differentiated from its two major rivals in being publicly listed from the 1980s onward, whilst maintaining a large family-owned stake.

A Bakers Oven Outlet in Willenhall in 1995
A Bakers Oven Outlet in Willenhall in 1995

By 1993 Bakers Oven operated over 500 shops and employed over 5,000 people.

Greggs acquires Bakers Oven
In 1994 Greggs acquired Bakers Oven, with 424 stores and two main bakeries, for £18.5 million in cash. This took Greggs to a total of 929 outlets. Greggs was interested in expanding into the South East, where the majority of Bakers Oven outlets were based. Greggs was strongest in the North, particularly the North East, where it had a 40 percent market share in some areas. Greggs was also interested in learning about in-store baking and seated catering from the chain. As a combined group, Greggs was able to lower central buying costs and increase profitability. Greggs also announced plans to lower the pricing of Bakers Oven, which it regarded as excessive.

By 1995 Greggs had steered Bakers Oven into profitability by decreasing the focus on sliced white bread (in which they were undercut by supermarkets) and emphasising higher margin items such as sandwiches, savouries and pastries.

By 1996, 241 Bakers Oven outlets had been converted to the Greggs brand, mostly the units without in-store bakeries and seating and in less desirable locations. The Greggs model was to drive high volume value sales. However, new Bakers Oven outlets continued to be opened, and the chain was regarded as the company’s “premium brand”. In the late 1990s the chain was revamped, and items such as filter coffee and salad rolls were added to the menu.

By 2004 there were only 220 Bakers Oven outlets remaining. By 2006 the brand had been withdrawn from Scotland and the North of England, with all former outlets converted to Greggs. In December 2008 it was announced that the remaining 163 Bakers Oven outlets would be rebranded as Greggs.

Food, Hospitality

The hole story: a history of Dunkin’ Donuts in Britain

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Dunkin’ Donuts has failed in the British market twice. Will it succeed on its third attempt?

1965 – 1968
Dunkin’ Donuts announced plans to establish a chain of 250 shops across Britain in 1965. The first outlet was opened at Ludgate Circus, London in October 1965. The venture was a “flop” according to The Economist, and the operation entered into liquidation in 1968.

1988 – 1999
The second attempt began in 1988. Somewhat frivolously, its British head office was at 48 Carnaby Street, London. Four outlets were opened in the Birmingham area, with a bakery at Leamington Spa. Six Dunkin’ Donuts (including a 24-hour branch in Glasgow) and a bakery in Livingston were established in Scotland. The plan was to open 100 outlets, with a focus on the London area. The outlets and bakeries were all closed down in 1999, after continuously losing money.

During its second attempt, Dunkin’ Donuts was actually owned by a British company, Allied Domecq, which has substantial knowledge of the local property and catering markets, as the owner of J Lyons (including the Wimpy burger chain) and 3,500 pubs.

2013 to present
Dunkin’ Donuts returned to Britain in 2013. Management may have been encouraged by the success of rival doughnut retailer Krispy Kreme. The chairman and chief executive of Dunkin’ Donuts in America is also a Brit. But Krispy Kreme clearly presents itself as a premium priced “treat”, whereas the Dunkin’ Donuts model is more of a value proposition akin to Greggs.

Food

Dunkin’ Donuts enters the UK market

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So Dunkin’ Donuts has entered the UK market, with two locations so far, and plans for expansion to 100 outlets in five years. The locations of the first two outlets, Harrow and Chelmsford (with plans for a third in Cambridge) make me feel confident about the chances for the chain’s future success in the UK. Not too flashy, with low rents. The mistake of many US food chains has been to occupy high profile central London outlets, with very high rents, and this rarely works out. This lack of arrogance on the part of DD may seem refreshing, but their humility stems from the fact that this is their third attempt to crack the UK market.

Harrow Dunkin' Donuts outlet
The first Dunkin’ Donuts site in the UK, in Harrow

Despite media claims about the “battle of the donuts”, Krispy Kreme will not be DD’s major rival in the UK. DD will compete primarily with Greggs, supermarkets, McDonald’s, and to a lesser extent the likes of Costa and Starbucks. Greggs is the company that has the most to fear from DD’s expansion, although Greggs is a wily competitor. Greggs did not emerge as the sole national bakery chain by falling asleep at the helm.

DD’s main customer base will be commuters, particularly during the lunchtime period. I haven’t been a DD either in the UK or elsewhere, so I can’t comment specifically on the food quality, but as it looks to be similar to McDonald’s and Greggs standard. If this is a case, it will be difficult for DD to succeed without matching their competitor’s prices. Due to its obvious initial cost disadvantage to its competitors due to its lack of scale, DD’s American parent company will have to be prepared to absorb sustained losses for at least a few years before the chain becomes profitable. The question is, how badly to DD want to gain a slice of the UK market?

Confectionery

Cadbury Dairy Milk

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Cadbury Dairy Milk

Cadbury is the second highest selling confectionery brand in the world after Wrigley’s chewing gum. Similar to the Coca-Cola Company, much of Cadbury’s success has been driven by a single product, the Dairy Milk bar. When someone says Cadbury, you instantly think of Dairy Milk, it’s purple packaging, and the famous “glass of milk and a half” slogan.

The Cadbury Dairy Milk chocolate bar was introduced in 1905. Developed by George Cadbury Jr, it was the first milk chocolate bar to be mass produced in the UK. By 1914, it was the highest selling Cadbury line. The economies of mass production combined with rising incomes meant that the working classes could afford chocolate for the first time.

However, other manufacturers such as Fry and Rowntree soon caught up with Cadbury’s mass production methods. So why were none of their own product lines as successful as Dairy Milk? There is first mover advantage, yet it took seventy years for a product to seriously challenge Dairy Milk in the UK market. The Rowntree Yorkie bar made inroads in the 1970s, but has since faded somewhat. The Mars Bar built market share throughout the 1970 and 80s, largely because it retailed for half the price of Dairy Milk, so it was hardly battling on equal terms.

Why has Dairy Milk been so successful? There are two consistent brand selling points: Quality/Healthfulness and Luxury.

The brand has always been advertised as affordable luxury. Purple has been the dominant colour in the packaging since 1920. When you see purple on the shelf of the supermarket, you can be almost certain that it’s a Cadbury product. Purple reinforces the brand image: purple is regal and elegant and represents luxury. By dressing their product in purple regalia, Cadbury are expressing their confidence in the quality of their product. The packaging implies “Fit for Kings”, without the arrogance of explicitly saying so.

There is also an implicit ego boost associated with consuming a product that is “fit for royalty”. “You are good enough to consume this regal product”. The brand is egalitarian, which ties into the egalitarian nature of the Quakers, of which the Cadbury family were members.

This ties in with the original context of the product, which was offering the once luxury product, only affordable for the few, to the masses.

The luxury connotations of Dairy Milk reinforce the notion of a chocolate bar as a form of self-treating. The idea of chocolate as a reward, which is a powerful one, as consuming chocolate triggers the release of endorphins into the brain, which are the body’s “reward mechanisms”.

Since 1928, the product has been represented by the famous slogan, “A glass and a half”. This refers to the amount of milk (426ml) that a half pound (227g) bar of Dairy Milk contains. The slogan represents quality: no other competitor claims to contain as much milk, and milk is a simple, pure, quality ingredient.

Milk also suggests a certain amount of healthfulness. Milk grows bones and is/was given to schoolchildren. Milk is also a natural product, which counteracts the natural suspicions the individual may have regarding processed food.

Meanwhile, the name “Dairy” conjures up wholesome, rural imagery. The countryside has healthy and natural connotations. Interestingly, the second most successful Cadbury product after Dairy Milk is the Creme Egg, which also uses the double “dairy” imagery.

Dairy Milk line extensions continue to reinforce this image. To the modern consumer, “Fruit and Nut” and “Whole Nut” sound more like health bars or healthy cereals than high calorie confections. Again, fruits and nuts are products with healthy and natural connotations that professionals are always recommending we eat more of.

This healthfulness connotations help to allay the individual’s principal reason for not buying chocolate: it’s not good for you as it has a high sugar and fat content.

Food

The origins of the full English breakfast

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The origins of the full English breakfast are more recent than you might expect.

Historically, the classic English breakfast pairing was bacon and eggs. Bacon was the staple meat for the agricultural class for hundreds of years, and eggs were available in most homes each morning. As late as the 1950s, an “English breakfast” was shorthand for bacon and eggs.

Seemingly beginning around 1915, as wartime economy and rationing began to bite, the cold remains of the previous evening meal began to be added to bacon and eggs. As bacon and eggs became scarcer (and more expensive), the additions of these items bulked out the meal and prevented waste. Fried bread and potatoes were popular starchy additions. Sausages were not subject to rationing, and began to be introduced as a bacon substitute.

The earliest reference I can find to the phrase “full English breakfast” is in a 1930 edition of the Daily Mail.

A 1978 edition of The Globe and Mail of Canada lists the meal as comprising “eggs and bacon, tomatoes, sausages, kippers and heaven knows what else”.

The phrase was first shortened to “full English” (minus breakfast) in the mid-1990s.

Today, a full English comprises of, more or less, sausage, bacon, eggs, some starch such as fried bread, toast, hash browns or sauté potatoes, and some vegetables such as tomatoes, mushrooms and baked beans. Black pudding is popular. Regional variations include white pudding and oatcakes.

Food, Retail

Greggs in central London

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Gregg’s is nationwide British bakery chain. Why are there so few Greggs outlets in central London?

There’s certainly no shortage of commuters looking for lunch, or tourists looking for a quick snack. McDonald’s, EAT, Pret and Starbucks all maintain a strong presence.

Living in the provinces, I have always been impressed by the sheer quantity of Greggs outlets. In central Leeds and Newcastle, large cities, one never need be more than one minute’s walk away from a steak bake or sausage roll.

So why so few outlets in central London? Yes, the chain has northern origins, but that didn’t hinder McDonald’s or Starbucks, with origins even further afield.

The chain is essentially a fast food retailer: largely calorific products served quickly and cheaply. And Burger King, KFC and McDonald’s are very successful in the capital. People clearly aren’t afraid of unhealthy food.

Is the rent too high to make the low cost retailer profitable? Greggs outlets have very limited seating, so I hardly see how this could be an insurmountable problem. In Bread: The Story of Greggs, Ian Gregg, the former chairman of the company, states that before the 2008 economic crash, rivals were overpaying for sites in central London. But if that is indeed the case, then what has prevented the chain from expanding in the area since the economic crash, now that rents are lower?

Lets look at the individual USPs of its rivals. McDonald’s offers seating, Starbucks offers comfortable surroundings, Pret offers speciality coffee. The Greggs proposition can actually be fulfilled through small supermarket concessions. In actuality, many small supermarkets in central London already offer a hot pasty/sausage roll selection. How does Greggs improve on their rival? Well the Greggs product will be fresher, as they bake their food throughout the day. So freshness, convenience and price are the USPs that need to be drawn upon. Greggs also needs to smarten up its existing central London outlets in order to place distance between itself and its reputation as downmarket junk food.

Food

The marketing of Lea & Perrins

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There are two key marketing strategies at work behind the almost mythic reputation of Lea & Perrins’ Worcestershire sauce.

1.) the “secret” recipe The website states that there is a secret recipe, known only to a “privileged few”. Heck, if the secret recipe tactic works for Coca-Cola and KFC, why not us? But the truth is, *every* corporate recipe is a secret. You don’t know the recipe for Walker’s Roast Beef crisps or Knorr’s Chicken Seasoning, do you?

So one of the products major differentials is hardly a differential at all. Okay, I hear you say, we don’t know what Worcestershire sauce is! Well that’s hardly a secret. In fact, the company have been quite open that the sauce is principally vinegar and a soy sauce substitute (acid-hydrolyzed vegetable protein). Also included are salted anchovies, tamarinds, chillies, shallots, garlic, onions, ginger, molasses, sugar, cloves and “various fruits”.

2.) the idea of “craft”, small-scale, “vintage” traditional production. There is no reason to assume that the methods are more traditional than anywhere else. For example, the ingredients are no longer matured in wooden barrels: plastic and metal containers have taken over. It’s hard to see it as a craft product when it’s just vinegar and soy sauce with some crazy ingredients thrown in for good measure. Although I do love it with chilli con carne… And in the US, it still comes wrapped in paper, as it has been since the 1850s. Although the paper is no longer necessary to avoid bottle breakages, the tradition has endured. It gives the original Worcestershire Sauce a USP. Understand that I don’t mean to do down the marketing tactics behind Lea & Perrins’ famous product. In fact, I think it’s all the more impressive that tried and tested marketing techniques have been utilised so effectively without losing its sense of authenticity or becoming a “me too” brand.

Drink, Food

The rise of “craft”

The notion of craft and premium quality food and drink did not arise from the ether. In this post I attempt to trace its roots in recent history.

With the end of post-war rationing in Britain, a range of super-premium restaurants with a focus on local provenance opened in the North West of England. Beginning with Sharrow Bay in 1960, they catered to a very small segment of the population, but their growth indicated a desire for authentic, quality food.

In the 1970s the British public were enamoured with the wave of packaged and processed products: Watney’s Red Barrel ale, yoghurt, frozen food etc. They were expensive, but people were prepared to pay a premium for it because it was new, and perceived as “better”.

The late 1970s and 1980s saw the growth of the real ale movement, which advocated small scale production, locality and traditional production methods. But the provenance doesn’t even have to be your localness: just provenance in general seems to suffice. One had only to witness the growth of Whitbread’s Stella Artois in the 1980s and 90s, a beer marketed with French language advertisements, despite being brewed in the UK, and with origins in Flemish speaking Belgium.

Another interesting example is Jack Daniel’s whisky. With a monochrome label and adverts, the product was able to successfully foster a small scale image, “craft” image. This consumer “backlash”, as it were, stems from a new-found consumer cynicism. The consumer knows that most products they buy in their supermarket are owned by multi-national conglomerates. Many people do not like giving their money to perceived faceless corporate entities. Any product that seems to defeat or circumnavigate this system, and treat the consumer like an adult, seems to be on to a winner. People will pay far more than net worth for a perceived craft product because it makes them feel good for two reasons: supporting local or craft production, and avoiding the multinationals. I don’t think this applies to the whole population, but I think it applies to a good number.

The examples are endless, but I will give just one more: Yorkshire Tea. The name “Yorkshire” implies traditional craft methods and localness. The name isn’t faceless and bland like competitor brands PG Tips and Tetley Tea. The brand wears its provenance proudly, and isn’t ashamed of its local origins. The brand came from nowhere in the 1990s to becoming the third highest selling tea brand in the country by 2007. It wasn’t until 2000 that it became a nationwide supermarket staple. The brand has a surprisingly modern heritage: I doubt that many of its consumer base would estimate that the brand was only launched in 1977. Meanwhile rival brands such as PG and Tetley patronised the audience with television adverts that starred cartoon characters, chimpanzees and monkey hand puppets. The consumer goods advertising market has matured. Treating consumers like idiots works far less well than it used to. Consumers appreciate being treated like human beings.

The premium/provenance market shows little sign of slowing. Borough Market in London is now firmly established as a destination for quality food with provenance. The celebrity chefs have long promoted locality and quality. Farm shops are now ubiquitous in many English villages.

Craft brands need to be careful to maintain their image. Stella Artois sold for the same price as other premium lagers, despite its slogan of “Reassuringly expensive”. Consumers get wise to a brand that seems inauthentic, and it irritates them as an insult to their intelligence. Stella is now, frankly, a commodity lager, and its premium positioning has largely been given over to the Italian Peroni brand, which had spread largely through word of mouth.