Symington's hails deal to bring Campbell's soup back to the UK

Symington's, the dried food manufacturer, has struck a deal with soup giant Campbell's to bring the iconic brand back to the UK consumer.

The fast-growing Leeds company is making 26 products for the American firm, which sold its UK business to Premier Foods in 2006.

Symington's believes the range – which includes cup soup, simmer soup, pasta and rice – could be worth 20m in new sales within 18 months, creating both new jobs and security for existing ones.

Henrik Pade, marketing director, said: "It's a brand that's well known in the UK and has never been in cup soup in this country. Our view was that it could go into other formats and carry."

David Salkeld, chief executive, added: "It's a big brand but what makes it bigger is the Andy Warhol connection. It's better than any advertising you could ever buy. It's iconic."

The American artist's 1962 screen print of a soup can is one of the best-known images of the 20th century.

Symington's, which is owned by private equity and its management team, is on course to turn over up to 93m in the year ending February 2011 – up from 47m in 2007, the year of its management buy-in.

The company has grown organically by specialising in taking "under-utilised brand equity" and developing new ambient products to sell to the major food retailers. It competes directly with multinationals like Unilever, Nestl and Premier Foods, all multi-billion pound operations.

Following the buy-in, Mr Hade carried out market research which revealed that consumers believed Campbell's soup was still on sale in the UK, even though it had disappeared from supermarket shelves two years after Premier's acquisition.

The two companies entered discussions and agreed the joint venture in November. John Sechi, European president at Campbell's, visited Symington's HQ to test and sign off the products.

The deal follows the announcement last year that Bridgepoint Development Capital, its majority shareholder with 55 per cent, and Yorkshire Bank were providing 10m to back the company's move into the gravy market, through the Aunt Bessie's brand, owned by the William Jackson & Son Group, based in Hull.

Symington's is bringing new products to market this year and expects to see more growth. Its other brands include dried food ranges for celebrity chefs Ainsley Harriott and James Martin, Golden Wonder and Crosse & Blackwell.

Mr Salkeld, a veteran of the food industry who held the top jobs at Northern Foods, Arla UK and Grampian, said: "We think the business could go a long, long way. We think it could be 200m in dried food. The business is growing in a tough climate.

"Food is a good sector. Dry food is as good as it gets because of its life, efficiency in production and distribution."

An obstacle to continued growth, though, is the space available around the company's headquarters in central Leeds. The four main lines on this site are running at capacity.

Mr Salkeld said: "There will be more capital expenditure. But the problem is the space. I'm not sure where we will put more machinery. But there will be more lines."

The company has quite a few engines of growth, he added, including a possible move into chilled or frozen foods in the future. He also said the company might consider a flotation if it was right for the shareholders.

Mr Salkeld said turnover could reach 250m with acquisitions in three to four years.

He likened Symington's to a speedboat, competing against the battleships of Premier Foods, Unilever and Nestle. He added: "There won't be any other food company that has grown organically as we have – by any metric."

Mr Pade, a former colleague from Arla, spoke about the company's marketing strategy. "It is taste, taste, taste," he said. "We nicked our thinking from Skoda. They said 'we have changed the car, can you change your mindset?' We have changed the product, now can you change your mindset?

"There are a lot of people who take the view that cup soup is like wallpaper paste. We have faced up to that. We have cleaned up the product, removed the artificial ingredients and flavourings and we have optimised product development so we now believe we can compete on taste with chilled products."

Local MP Hilary Benn visited the company yesterday to hear about the business and its plans. Council chief executive Tom Riordan is due to visit next month.

Mr Salkeld said: "We need support from the council on infrastructure."

Company faces inflation test

The main challenge facing Symington's in 2011 will be managing inflation costs.

Like any company that relies on commodities, it must absorb rising commodity pri-ces while protecting margins.

It's not all defensive, though. "The coming year will also present opportunities for the business," chief executive David Salkeld told the York-shire Post. "If we do have a recessionary consumer, these are not expensive products."

In the week before Christmas, the company produced 441 tonnes of products, the biggest week in its history.