Northern Foods

Northern Foodsis a British food manufacturer headquartered inWakefield, England.It was formerly listed on theLondon Stock Exchangeand was a constituent of the originalFTSE 100 Index.The company is credited, together withMarks & Spencer, with creating the UKChilled Foodcategory.The driver of this growth wasChristopher Haskins, the son-in-law of the company's founder Alec Horsley. Haskins became a director in 1967, deputy chairman in 1974, and was chairman from 1980 to 2002. The company was delisted in 2011 when it was bought by the2 Sisterscompany.
The business was founded byAlec Horsleyin 1937 as a family-run dairy business based inHolme on Spalding Moor.During the war years, Horsley bought up many competing local dairies to become a major dairy force in the Humber region.In 1942, the business was registered as Northern Dairies and became apublic companyin 1956. In 1958, Alec's sonNicholas Horsleyjoined the then Northern Dairies as a trainee manager, becoming a director in 1963. His first business success was to acquire cheaply, a stake in a small ice-cream company calledMr Whippy, which he sold on toCharles Fortefor a high price two years later.
The dairy was generating large amounts of cash, as many dairies were at the time, due to the government backed guaranteed pricing created by theMilk Marketing Board, itself a legacy of post-war food shortages.That cash was used to fund diversification into foods. In 1972, Northern Dairies changed its name to Northern Foods.Nick Horsley's brother-in-law,Christopher Haskinsfound himself on a plane next toMarks & Spencer(M&S) executive who was setting up a new store in Belfast. M&S began buying milk for the store from Northern Foods, followed by yoghurt deliveries and food, including the first fresh trifle for M&S.The contract developed into food sales to M&S that were eventually worth over half a billion pounds a year.Northern Foods also made some non-competing products for other retailers. Since then its strategy has been to buy up and consolidate M&S suppliers.
In 1986, Northern Foods built Fenlands Food Factory inGrantham, for £8 million, dedicated entirely to M&S.At the time it was regarded as the most advanced food factory in Europe.
Nick Horsley had successfully diversified the business, widening  Northern Foods' portfolio intoMarks & Spencercakes (through Park Cakes), Smith's Flour Milling, brewing (with the purchase ofHull Brewery),Fox's Biscuits,Pork Farmsand many other smaller firms. It was during this period that the company pioneered the market in chilled, prepared meals and sandwiches in supermarkets.
Nicholas Horsley took early retirement due to a rare genetic wasting disease, and by 1986, Haskins had become chairman of Northern Foods.In November 1991, the company acquiredExpress DairiesfromGrand Metropolitan.
In 1994, the Milk Marketing Board was abolished and milk prices in supermarkets fell.The loss of the high return on milk made a measurable impact on all dairy companies including Northern Foods. Northern Foods demerged Express Dairies in 1998 as the depressed margins were dragging the share price down of the overall group. Both businesses were listed to the FTSE 250.Express Dairies was later bought by in a staged acquisition, finalised in 2003, byArla Ambaa Danish and Swedish co-operative.
Christopher Haskins stepped down as CEO in 2002 with Jo Stewart succeeding him. In March 2004, Patricia O'Driscol, who had previously worked forTesco’s chilled business andShell, was hired to replace Stewart.
In July 2004, M&S was subject to a takeover bid fromPhilip Green. This was rejected by M&S which, partly as a result of shareholder pressure, decided to be more transactional in its supplier relationships and started to take volume out of the Northern Foods factories to diversify its supply base.Four profit warnings followed.
In 2005, O'Driscoll embarked on a radical restructuring programme. In February 2006, she hired Stefan Barden, formerly CEO ofHeinzUK&I, to support the restructuring as CEO designate. They completed the restructuring that year selling the dedicated chilled distribution (NFT), flour milling (Smiths), cakes (Park Cakes), speciality bread (Fletchers) and chilled pastry businesses (Pork Farms Bowyers) were also sold to a private equity group, Vision Capital.Lastly, the Green Isle Boyle site and its Trafford Park Bakery were also closed with production either consolidated into other factories within its footprint or moved to other manufacturers such asGinsters.The restructuring complete, O’Driscoll stepped down and Barden took over as CEO in 2007.The next 16 quarters saw sales growth and margin expansion during a period of continued supply over capacity,volatile commodity pricesand significant customer pricing pressure.
Whereas trading was now performing well, a major issue for Northern Foods’ had become its large pension scheme, which since the 2008 financial crisis, had moved from being in surplus to having a sizeable £150m deficit.A merger of equals withGreencorewas proposed to help address this, but the pension fund preferred the protections given in an alternative offer by 2 Sisters PLC; which successfully consummated the acquisition in May 2011.
On 13 May 2011, the company was delisted from theLondon Stock Exchange. The Northern Foods factories continue to trade with the UK major supermarkets from within the 2 Sisters group.
On 11 September 2020, Northern Foods sold theFox's Biscuitsbrand toFerrero SpA, an Italian multinational specialized in the production of chocolate and snacks.