 | |
| Rowntree's | |
| Formerly |
|
| Company type | Public |
| Industry | Confectionery |
| Founded | 1862; 164 years ago (1862) |
| Founder | Henry Isaac Rowntree |
| Headquarters | York, England |
Key people | Joseph Rowntree |
| Products | Sweets |
| Brands |
|
| Parent | Nestlé |
| Website | rowntrees |
Nestlé UK Ltd.[1] (UK:/ˈnɛsleɪ/NESS-lay),trading asRowntree's (/ˈraʊntriːz/ROWN-treez), is a Britishconfectionery brand and a former business based inYork, England. Rowntree developed theKit Kat (introduced in 1935),Aero (introduced in 1935),Fruit Pastilles (introduced in 1881),Smarties (introduced in 1937) brands, and theRolo andQuality Street brands when it merged withMackintosh's in 1969 to formRowntree Mackintosh Confectionery. Rowntree's also launchedAfter Eight thin mint chocolates in 1962. TheYorkie andLion bars were introduced in 1976. Rowntree's also pioneered the festiveselection box (a gift consisting of assorted bars and sweets) which in the UK have been a staple gift at Christmas for over a century.[2]
Founded in 1862, the company developed strong associations withQuaker philanthropy.[3] Throughout much of the 19th and 20th centuries, it was one of the big three confectionery manufacturers in the United Kingdom, alongsideCadbury andFry, both also founded by Quakers.[4]
In 1981, Rowntree's received theQueen's Award for Enterprise for outstanding contribution to international trade.[5] In 1988, when the company was acquired byNestlé, it was the fourth-largest confectionery manufacturer in the world.[6] The Rowntree brand continues to be used to market Nestlé's jelly sweet brands, such asFruit Gums andFruit Pastilles. Rowntree's ceased to exist as a corporate entity in 1991, becoming Nestlé UK.[7]
Rowntree's was founded in 1862 atCastlegate, inYork, byHenry Isaac Rowntree, aQuaker, as the company manager bought out theTuke family.[8][9]
In 1864, Rowntree acquired an old iron foundry at Tanner's Moat for £1,000, and moved production there.[10] In 1869, the factory was staffed by 12 men.[11] By 1869, Rowntree was in financial difficulties and his brother,Joseph Rowntree, joined him in full partnership, and H.I. Rowntree & Co was formally established.[10]
In 1881, Rowntree introducedFruit Pastilles, competing against French imports of the time, and the product proved to be a great success, accounting for about 25% of the company's tonnage by 1887.[12] This success allowed the company to invest in aVan Houten press, which enabled it to produce chocolate with the cocoa butter removed, to compete with Cadbury's successful Cocoa Essence.[13] In the 1890s, Rowntree transformed from a small family business into a large-scale manufacturer, as sales more than quadrupled due to an increased demand among the public for confectionery.[14]
In 1889,Seebohm Rowntree established a small research and testing laboratory for analysing ingredients and rival company products.[15] In 1890, to cater for this increased demand, Rowntree acquired a 20-acre site at Haxby Road on the outskirts of York.[16] The Tanner's Moat site had become too small for Rowntree's needs, and the company had noted the success of Cadbury's purpose-built factory inBournville.[16] In 1893, the company introducedRowntree's Fruit Gums.[17]
By 1897, the unlimited partnership needed external funding for its expansion, and became a publiclimited liability company called Rowntree & Co.[18] Robert Fitzgerald has accused the company of being slow in new product development and marketing compared to its major competitor of the period,Cadbury.[19] Fitzgerald suggests that Joseph Rowntree imitated the successes of competitors (Cadbury's Cocoa Essence, French fruit pastilles) and that under his leadership, the company did not introduce any innovations of its own.[19] Around 1898, the company acquired its own cocoa plantations in theWest Indies.[15] In 1899, Rowntree introduced its firstmilk chocolate block.
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Rowntree had struggled to make a milk chocolate product of comparable quality or value to Cadbury's Dairy Milk.[20] Joseph Rowntree even described the growing market for milk chocolate as a fad.[21] Rowntree's poor performance in the category became a major problem from 1914 onwards, as British public preference continued to move towards milk chocolate, and away from the more bitter cocoa essence products.[20] Rowntree's two major rivals, Cadbury and Fry, merged in 1918, and although Rowntree was invited to participate in the merger, the company declined to do so.[22] Meanwhile, the Rowntree board was torn as to whether it should become a low-turnover, high-quality product company or a mass producer of cheaper lines.[22] Seebohm Rowntree inherited a struggling company when he succeeded his father as chairman in 1923.[22] By 1930, as a result of all its problems, Rowntree was approaching bankruptcy.[20]
In 1926, Cowan Company of Toronto Limited (founded in 1890 as Cowan Cocoa and Chocolate), in Toronto, Canada, was acquired for $1 million.[23] From 1931, Rowntree of Canada began to manufactureMackintoshtoffees under licence.[24] In 1927, the company began to market its fruit gums, and its pastilles from 1928, in the now familiar tube packaging.[25]
George Harris was appointed marketing manager for chocolate bars in January 1931.[26] Harris had learned the latest marketing techniques while he was in the United States.[26] According to Robert Fitzgerald, "It was Harris's drive and insight which inspired his firm's renaissance in the 1930s."[26] In 1932, Rowntree appointed a new advertising agency, the London branch ofJ. Walter Thompson.[27] Thompson undertook extensive market research to discover what consumers wanted.[27] As a result of this research, theBlack Magic assorted chocolate box was launched in 1934.[27]
In January 1935, Rowntree decided to abandon its attempt to compete with Cadbury Dairy Milk.[28] In May 1935, Rowntree launched theAero, an aerated milk chocolate.[29] The Chocolate Crisp, a wafer-and-chocolate bar later known as theKit Kat, was also launched in 1935.[29] In 1937, the Dairy Box of assorted chocolates was launched, using the market research that had been undertaken for Black Magic.[29] Chocolate beans were first sold loose in 1938, but were later packaged in a cardboard tube and branded asSmarties.[29]Polo, the distinctivemint with a hole in the centre, was developed in 1939, but its introduction was delayed by the onset of war.[29] Harris was made company chairman in 1941.[26]
Rowntree entered the continental Europe market in the 1960s, establishing production facilities inHamburg,Dijon,Elst, andNoisiel.[6]After Eight thin mint chocolates were launched in 1962.[6]
In 1969, the Rowntree board rejected a £37 million takeover bid fromGeneral Foods.[30] That same year, Rowntree entered into a long-term agreement withHershey whereby Hershey would produce Rowntree products under license in the US.[6] Rowntree merged with John Mackintosh and Co in 1969, to become Rowntree Mackintosh.[6] Mackintosh producedRolo,Munchies,Caramac, andQuality Street.[9] Hershey's began U.S. distribution of Kit Kat in 1970 and followed in 1971 with Rolo.
In 1971, Rowntree Mackintosh acquiredMenier Chocolate of France.[31] In the same year, the board attempted to diversify the business, and made a bid forBovril, but lost out toJames Goldsmith'sCavenham Foods.[31] In 1972,Hoadley's Chocolates of Australia was acquired by Rowntree Mackintosh. This company had invented such products as theViolet Crumble andPolly Waffle.
TheYorkie andLion chocolate bars were introduced in 1976.[6] In 1978, the Hershey contract was renegotiated, giving Hershey the rights to the Kit Kat and Rolo brands in the US in perpetuity.[6]
Ken Dixon was appointed as chairman and chief executive in 1981.[6] Between 1981 and 1987, Rowntree invested nearly £400 million in upgrading its manufacturing facilities and developing high-volume, product-dedicated equipment for several of the company's brands, including Kit Kat, After Eights, and Smarties.[6]
Between 1983 and 1987, Rowntree spent nearly £400 million on acquisitions, includingTom's Foods for £138 million (1983),Laura Secord Chocolates for £19 million (1983),Hot Sam Pretzels for £14 million (1986), the Sunmark confectionery business in the US for £156 million (1986), andGale's honey for £11 million (1986).[6]
Between 1982 and 1987, the number of UK staff was reduced from 19,700 to 15,600.[6] In 1987, Rowntree operated 25 factories in nine countries and employed 33,000 people, including close to 16,000 in its eight UK operations.[6] Group turnover was £1.4 billion, with the UK and Ireland accounting for 40% of the total.[6]
On 13 April 1988, the Swiss confectionerJacobs Suchard began a dawn raid on Rowntree's shares, which had been under-performing the market, although they were beginning to improve, taking a 14.9% stake in the company by 9:15 am.[6] As a result, the managing director of Nestlé,Helmut Maucher, contacted Kenneth Dixon, the chairman of Rowntree, offering to act as awhite knight.[6] Nestlé was the largest food company in the world, and had been interested in Rowntree previously, but the Rowntree board would aggressively contest any attempted takeover, and Nestlé had never undertaken ahostile takeover before.[6] However, Nestlé was worried about the potential of Rowntree falling into the hands of one of its major competitors.[6] Rowntree was the fourth-largest chocolate manufacturer in the world, afterMars, Hershey, and Cadbury, with a 7% global market share.[6]
Nestlé eventually won control with an offer valuing Rowntree at £2.55 billion.[32] Strategically, Nestlé had always seen Rowntree as a perfect fit for its own operations.[6] Nestlé had strength in the block chocolate bar business, and Rowntree had strength in thecountline branded chocolate business.[6] Rowntree's strong global brands were the key reason for Nestlé's interest.[6] Due to potential synergies between the two companies, Nestlé believed that savings between 5 and 15% of Rowntree's operating costs could be made if the companies were to combine.[6]
The takeover was controversial, as Nestlé was effectively protected from similar takeover attempts under Swiss law.[33] After the Nestlé takeover, the Rowntree chocolate ranges began to use the branding "Nestlé Rowntree", before eventually the Rowntree name was dropped from the packaging altogether, except on Rowntree's Cocoa and the Fruit Pastilles[34] and Fruit Gums lines.[35] The Mackintosh branding was dropped from all former Rowntree Mackintosh products except for Mackintosh's Toffee.[36]
Between 1988 and 1994, the Nestlé Rowntree workforce was reduced by 2,000.[37] The Nestlé Rowntree factory inNorwich closed in 1994, andRolo, Yorkie, and Easter-egg production was moved to York.[38]
In September 2006, it was announced that the manufacture of Smarties would be relocated to Hamburg, resulting in 645 job losses at the York factory.[39] Production of Dairy Box was relocated to Spain, and Black Magic to theCzech Republic.[39]
In May 2009, Nestlé launched a new jelly sweet,Rowntree's Randoms,[40] and in April 2012, another new jelly sweet, Fruit Bottles, both under the Rowntree's brand.
Nestlé has invested more than £200 million in the Rowntree business since 1988, making the York site one of the world's largest confectionery factories.[41] Nestlé's global research centre for confectionery is also based in York, and doubled in size following a £7 million investment.[41]
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The best known products that are still branded under the Rowntree name areRowntree's Fruit Gums,Rowntree's Fruit Pastilles and Jelly Tots.[42][43] Jelly Tots are soft, chewy fruit-flavoured sweets. They are round, sugar-coated gumdrop-like confections and contain 25% fruit juices and no artificial colours or flavours.[44] Jelly Tots were invented by Dr Brian Boffey of Horsforth, Leeds when he was working for Rowntree's.[45] Jelly Tots were launched in 1965[46] and quickly became established as a popular children'sbrand in Europe.[43]Rowntree's Randoms were introduced in 2009.
The Rowntree brand is also used on a number of ice lollies (made byFroneri) for Nestlé.[47] The brand has a similar marketplace to that of theTrebor Bassett division ofCadbury's, and competes head-to-head with this company in a number of fruit-gum categories.
The company largely eschewed advertising before its establishment as a public company in 1897, when it employedS. H. Benson as its agency.[48] Before 1930, the company considered that quality products would speak for themselves, and did not need advertising to sell their benefits.[49]
In 1932, Rowntree changed their agency to the London branch of J. Walter Thompson.[23]
This year, millions of selection boxes will be unwrapped across the country from the wee small hours of Christmas Day, continuing a tradition that goes back over 100 years.
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