Brand Spotlight: Walkers: The Soul of Scottish ShortbreadDate: 11/01/12 | Source: Specialty Food Magazine | Author: Deborah Moss
Categories: Industry Operations; Suppliers; Retailers | Tags: Brand Spotlight
Begun as a popular village bakery, Walkers has been making shortbread in the Scottish Highlands since the late 1800s. The original recipe is still used today, and the products are now available in more than 70 countries worldwide. Here’s a brief look at how this family company has evolved over the years.
by Deborah Moss
When Joseph Walker started his bakery more than 100 years ago, he began with a 175-square-foot shop in Torphins, Scotland. Today, the company has more than 250,000 square feet of manufacturing space, 1,500 employees and more than 500 products sold around the world.
Though much has changed since Walkers’ humble beginnings, it is still run with the same core values: honesty, integrity and authenticity. With slow and steady growth for more than a century, this company is still deeply rooted in Scotland even as it has expanded all over the globe.
The Early Years
In 1898, after four years of training to become a baker, Joseph Walker borrowed 50 pounds (about $81) to start his own bakery. Walker was fascinated with shortbread and, using his mother’s simple recipe, set out to make the best in the world.
Scottie Dogs Shortbread
With one employee and a cart pulled by a retired tram- car horse named Lovie, Walker delivered his breads, cakes and confections locally. By 1910, he had moved his operation to the larger nearby village of Aberlour. Though his village bakery offered many products—breads, cakes and cookies—his shortbread became particularly popular; a combination of local influences, such as soft water and a temperate climate (the locally made butter never has to be heated or frozen), quality and consistency
are credited for its success. But the early expansion didn’t
come without challenges. Within a few years of the move, World War I began and he learned a lesson about the importance of flexibility. “There was no sugar during the war, so no shortbread,” says Jim Walker, managing director and grandson of Joseph. “He concentrated on making bread and rolls during both wars.”
In the 1930s, Joseph’s sons James and Joseph Jr. joined the business that then offered a wider range of cakes and a selection of confectionery. His sons were eager for growth, so the business bought its first van.
From Local to International
In 1954, Joseph Walker died, and his family carried on the business. By the 1960s the third generation of Walkers had joined the company: Joseph, the eldest grandchild, ran manufacturing; Marjorie handled financial administration; and Jim, the youngest, ran sales and marketing. At this point, Walkers had more than 100 employees, 14 vans and three shops in the Scottish highlands. Their products could be found on local grocery shelves throughout the region.
The energy and optimism of the third generation joining the operation led Walkers to plan for expansion. “I went in with my suitcase and shared with Harrods in the late ’60s,” says Jim Walker of the first London-based specialty store that carried Walkers. In the 1970s, the company set its sights on the international markets. Switzerland and France were the pioneer nations. Walkers showed its product at ISM—today the world’s biggest confectionery trade show—in Cologne in 1978. That same year, Walkers started working with Europa Foods, which distributed the shortbread to major cities in the United States. Cardullo’s Gourmet Shoppe in Cambridge, Mass., was the first specialty store in the U.S. to carry Walkers, soon followed by shops in other metropolitan areas such as Zabar’s in New York.
“We grew one step at a time: local, then all over Scotland, then England—some of the best stores in London. Then Europe. Then the U.S.,” recounts Walker. “Our reputation spread by word of mouth.” Though the third generation was keen on expansion, they were rooted in tradition. “We still used the same recipe that my grandfather used,” he says. “Even when the price of butter shot up [and other companies started using margarine in shortbread], many customers came to us because we were still using the very best ingredients.”
1898 Joseph Walker, 21, opens a bakery in the Scottish highlands.
1930s Joseph’s sons James and Joseph Jr. join the business, which offers a range of cakes and confections.
1954 Joseph Walker dies, and his family carries on the business.
1960s Grandchildren Joseph, Marjorie and Jim join the business.
1970s Begins exporting shortbread to more than 60 countries around the world.
1975 Moves to a custom-built factory in Aberlour, Scotland; develops new products such as chocolate chip shortbread.
1978 Products shown at ISM in Cologne, Germany. Debuts in U.S.
1992 Prince of Wales helps establish Duchy Originals Biscuits and Walkers made the very first Duchy item, the Oaten Biscuit.
1995 Joined NASFT when U.S.-based Walkers Shortbread Inc. was established.
2004 Aberlour House, a shuttered school next to Walkers factory that the company bought and renovated, becomes the head office for Walkers Shortbread Ltd. Prince Charles presents as guest of honor.
2012 Business totals five factories, three in Aberlour and two in Elgin. Broke ground on a sixth factory, in Aberlour, in August.
Professional Assessment: What You Can Learn from Walkers
Food and beverage marketing expert Tammy Katz of Katz Marketing Solutions in Columbus, Ohio, evaluates some of Walkers’ strategies and discusses ways other companies can strengthen their own brands.
Be Product-Quality Fanatics: Walkers has an unwavering commitment to maintaining consistently superior products and commitment to preserving the original product formulation. Its outstanding product quality and taste profiles are dramatically different from its competition, which creates strong brand loyalty.
What You Should Do: Make product superiority and consumer appeal your top priorities. Continuously and objectively measure how well your product appeals to consumers. Use quality assurance standards and processes to deliver ideal products every time. Test any potential formulation changes with the consumer first, to make sure that it is at parity with, or superior to, your current formulation. Don’t allow short-term product shortcuts or cost savings to slowly kill your brand.
Brand Consistently, Refine Constantly: Walkers has built a powerful brand by establishing and maintaining its brand positioning: Scotland’s finest shortbread. This is communicated through its red tartan package design and logo, impeccable product quality, selective distribution and premium pricing. The brand has maintained its relevance over time by broadening its product line, new packaging structures, broader geographic distribution and more contemporary marketing.
What You Should Do: Develop a clear, compelling and distinct brand positioning and stay true to that promise in everything you do. You should be able to articulate it in fewer than seven words. Let that be the driving force behind your strategy, as well as what you choose not to do. Refine your brand over time to keep it strong and relevant. Rigorously assess what changes you must make with your brand to adapt to and capitalize on shifts in consumer preferences, competition and your market. If you don’t, competitors will.
Market More Effectively in Fewer Media: Walkers chooses to be conservative in its marketing investments and focuses on doing fewer things well. The company successfully expanded the brand through licensing partnerships, cause-related marketing, public relations and one social media channel. It recognizes the potential for other social media platforms, but has opted to pursue those in the future, when it can do them well.
What You Should Do: Do a few things extremely well. Each of your marketing programs must be consistent with your growth strategy and the most effective and efficient option. Ensure that each medium is done at a high-enough level to drive growth and a positive ROI. Do only what you can do well and measure. Don’t get sidetracked with tactics that are off-strategy or detract from priority marketing investments.
Food and beverage brand marketing expert, Tammy Katz, CEO of Katz Marketing Solutions, has led numerous Fortune 500 and specialty food brands from concept through global expansion. She has launched more than 100 new products with cumulative sales of $2 billion. Katz serves on the board of directors of several food companies and is adjunct instructor of brand management at the Fisher College of Business MBA Program at The Ohio State University.
The Recent Years: Key Factors in Success
Along with its proven recipe, Walkers also credits its success to a consistent method and a few smart business moves.
A Committed Local Workforce. “There are 600 people in the village of Aberlour, but we employ 1,600,” Walker notes. “We have a huge social interdepency with the community.”
By 1995, Walkers was busing people in from neighboring villages to work at one of three Aberlour facilities. It was the largest employer in town. “We were practicing CSR [corporate social responsibility] long before it became a buzzword,” Walker attests. “We rely on our people and we believe you need to look after your people. We are focused on being a good employer.”
As production demands grew, Walkers needed larger facilities—and more employees. In 1995, the company decided to open its fourth factory in nearby Elgin, a larger village with a bigger labor pool. In 2002 a second Elgin factory opened and the business broke ground on a fourth Aberlour bakery. Walkers now has more than 250,000 square feet of factory space, where employees make shortbread using the same recipe from more than a century ago with local ingredients—butter and wheat from the U.K.—whenever possible.
Strategically Scaled Manufacturing. Shortbread still makes up 75 percent of Walkers’ products (with Stem Ginger Cookies as its second best seller), and the company is careful not to change the manufacturing method too much.
“With our newer bakeries in Elgin, it’s like you’re scaling up the method you’d use in your home kitchen,” says Steve Dawson, president and CEO of Walkers’ U.S. division, Walkers Shortbread Inc., of how the company maintains artisanal quality. “Instead of mixing in bigger batches, we add more mixing machines. We use the same ingredients and same quantities. And the level of attention is the same.”
“There are people touching, tasting, looking at conditions [such as humidity]. The mixture is fed by hand into the machines that put batter into the trays,” Dawson explains. “We have people doing things that perhaps machines could do.” But, says Dawson, the Walkers believe the human factor and the location makes all the difference in their product. “Walker shortbread could not be made anywhere else. We’d lose our soul, and customers would notice. People don’t have to worry that we will put in less butter or less quality butter. That would kill our brand.”
At Walkers, consistency doesn’t end at the product itself. “We’ve expanded cautiously and will continue to do so,” says Dawson of the growth from local to international. Sustainability is stressed in partnerships, as well. New York’s Zabar’s has been selling Walkers since it came to the U.S. three decades ago. “We think in terms of generations, not quarters.”
Carefully Managed Expansion. In 1995 Walkers bought Europa Foods, the U.S.-based company that had been distributing its products, which became Walkers Shortbread Inc. “They did a good job selling our product. It was 80 percent of their business when Walkers purchased it,” says Walker. “It was a wise move to purchase and take over their direct relationship with the U.S. market. We could have more control of the supply chain and sell to places like Costco,” which has a co-branded shortbread for its Kirkland Signature brand. The acquisition of Europa also helped Walkers expand its growth in the U.S. supermarket category.
Top Export Markets
U.S., Germany, Canada,
By the mid-2000s, Walkers’ product range had grown to more than 200 items (not including customized package sizes for existing products), notes Dawson. These include products made through licensing partnerships with such companies as Disney and Weight Watchers (in the U.K.). Walkers makes exclusive products like Mickey Mouse shortbreads for Disney, and also produces limited-edition tins for events such as Royal Weddings, a tradition it started 50 years ago.
Launching Socially Conscious Brands. The ’90s also saw the development of Duchy Originals Biscuits, made with organic oatmeal sourced from the Prince of Wales’ estates. The proceeds from Duchys go to the Prince’s trust, which distributes money worldwide to local, community-based organizations. “Duchy Originals brand is an outlet for organic produce coming from his farm,” explains Dawson. “Profits flow to the trust-seeding community-based enterprise. This collaboration mirrors Walkers core company values of operating sustainably, using high-quality ingredients and giving back to the community.”
More recently Walkers has also partnered with the ASPCA in the U.S. Throughout 2012, Walkers is donating to the ASPCA 10 cents from each package of its Scottie Dog products sold in the U.S., including Scottie Dog cookies and tins, with a minimum guaranteed donation of $25,000. (Walkers has re-signed for 2013 with a guaranteed donation of $50,000.)
Focused Marketing. Dawson says the ASPCA partnership works well as philanthropy and cause-related marketing. “When it comes to marketing, Walkers has never done large-scale consumer advertising,” he explains. “Our social media efforts are going to Pinterest. We reach out to food bloggers to ask them to generate recipes and that feeds straight into Pinterest and our website. If we can generate content that’s spread around by other people, that’s efficient. People want to pass around recipes; they are inherently viral.” Walkers is not yet using Facebook or Twitter, though plans to do so are in consideration for 2013. As with all things Walkers, the social media approach is slow and steady to minimize missteps and ensure long-term growth.
Walkers is a private company and plans to remain so. And with the fourth generation starting to come aboard, its plan for success remains the same: one step at a time. A fourth Aberlour facility/bakery will open in spring 2013, and as for new markets, ambitions are high. “We export to more than 70 countries,” notes Dawson. “So that leaves at least 100 to go.”
Goals for worldwide reach aside, Walker describes the company as very secure and pragmatic. “Being privately owned, we don’t have to push into anything until we are ready,” he explains. “We will continue to provide long-term sustainable jobs. Our growth is all about continuity and consistency.”
What would his grandfather think of Walkers today? “He’d be amazed,” Walker predicts. “But he was a dour Scot. He’d tell us to keep our feet on the ground.”