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Northern chips off the old block
Conor Brophy



STEPHEN HUTCHINSON was amused at the confusion in some quarters when Tayto Northern Ireland bought rival Golden Wonder out of administration.

Several newspapers mistakenly reported that C&C, the publicly-quoted food and drinks group which owns the Tayto brand in the Republic, had been behind the deal.

Some investors clearly swallowed the story as well. C&C shares initially rose by 1% on the news, a price movement spotted by the Tayto NI managing director.

"I rang John Keogh [who runs Tayto for C&C] and said where's my cut? , " jokes Hutchinson.

Clearly there are still quite a few people who are not aware of what Hutchinson calls "the story of the two Taytos". Tayto NI celebrates its golden jubilee this year, marking 50 years since Hutchinson's father Thomas acquired the distribution rights for Tayto in the North from the brand's famous founder Joe 'Spud' Murphy.

Hutchinson, then running a bakery, was looking for more products to sell from his bread vans.

Within months of signing the distribution agreement with Murphy, Hutchinson's customers were demanding more Tayto crisps than the Dublin-based company could deliver. The distribution agreement quickly became a manufacturing deal, enabling Co Armagh-based Tayto NI to produce crisps for sale in the north, providing that the company refrained from selling any Tayto-branded merchandise in the Republic.

The companies have ploughed their separate furrows ever since, although the two Taytos still have quite a bit in common. Both lay claim to the biggest-selling crisp brand in their territories, both have been under serious pressure from multinational competitors . . . chiefly Pepsico's Walkers . . . and have had to up their game, rebranding and introducing new products in recent years.

In most other respects, however, the companies have developed in very different directions. In contrast to its distant cousin's PLC status, for example, Tayto NI continues to be owned by its founding family. Thomas Hutchinson died ten years ago but the company is now jointly-owned by Stephen, his siblings Anne, Brian and Raymond (the chairman), and their mother Anna.

The managing director has been working in the business since he was at school, recruited to help out as soon as he was big enough to heft boxes of crisps onto delivery vans. Evidently, though, cost control was a priority for the business from its early days.

Even free crisps for family members were at a premium.

"Everybody at school used to have crisps and I never seemed to have any, " Hutchinson says. Life at the Tandragee plant obviously appealed, since he decided to further his career at the firm beyond mere box-loader.

Hutchinson says he likes to think Tayto benefits from the positive aspects of being a family business without any of the negatives. He cites continuity as one of the benefits.

The company certainly appears to have passed seamlessly into its second generation of Hutchinsons.

There are no rumblings of feuding or disaffected brothers and sisters looking to cash in their crisps. Not that there haven't been opportunities, says Hutchinson.

"We have no interest in selling. We have had many offers and turned them all down, " he says. Far from wishing to sell up, the company is embarking on an ambitious growth strategy, of which the recent Golden Wonder acquisition forms a major part.

The deal gives Tayto two sites in Britain in addition to its Armagh base. While C&C has farmed out its crisp production to Meath-based snack food group Largo, Tayto NI continues to manufacture all its own product. The brand is inextricably linked to its production facility. The 300-yearold castle which houses its factory was bought by Thomas Hutchinson shortly after acquiring the rights to manufacture the crisps. It has been the site for Tayto production since the company founder and his six staff handfried the first batch of Tayto made in Tandragee 50 years ago.

Even as Hutchinson speaks, a group of schoolchildren run, giggling, past the window as part of their tour around Tayto Castle. The castle, which once played host to Allied troops training for the D-day landings, gets over 20,000 such visitors each year.

He insists the Sunday Tribune join their ranks in the interests of research and sample some hot, fresh-from-thefryer Tayto products.

"The best crisp you'll ever taste, " according to tour guide Bob Brown, whose claim is met with nodding and mumbled approval from crisp-filled mouths.

"Tayto is synonymous with Tandragee and Tandragee Castle. There's huge brand loyalty in the North with us.

We wouldn't envisage moving from Tandragee. Northern Ireland people are very proud of Tayto, " Hutchinson says, pointing out that Tayto cheese and onion crisps are the number one crisp brand in the North. He diplomatically professes not to have a favourite flavour himself. "I don't want to put off any of our loyal buying public."

Tayto has invested between £8m and £9m ( 11.7m- 13m) over the last two years to upgrade equipment at the castle, relocating its distribution centre from Tandragee to nearby Lurgan in the process. That has freed up space previously used for storage and enabled Tayto to increase production capacity.

Taken together with the Golden Wonder deal, that represents a substantial vote of confidence in the crisp and snack market in the Britain and Ireland.

Hutchinson won't divulge the value of the Golden Wonder deal but says press reports of a price in excess of £15m were not inaccurate.

Tayto beat several competitors, including Largo Foods, to secure the assets. Hutchinson dismisses any talk of getting one over on Tayto's rivals, however, and proffers a letter from Largo owner Raymond Coyle, congratulating Tayto on the Golden Wonder deal.

THE MAN AND HIS COMPANY

STEPHEN HUTCHINSON
Age: 47 Family: Married, with four children.
Background: Attended school in Dungannon Co Tyrone, by which time he was already working parttime in Tayto. Growing up in Tandragee Castle, both the family home and Tayto home, "private life and business life were sort of indivisible, it was like having a family pub, " he says.

Hutchinson is now managing director of the company and his older brother Raymond is the company's chairman.

Hobbies: Enjoys sport, particularly horse racing and will be heading over to Cheltenham for the upcoming festival. Played cricket and rugby in school.

COMPANY: TAYTO (NORTHERN IRELAND) Background: Snack food business that manufactures and distributes Tayto crisps in the North and a range of other brands including Golden Wonder, which it recently acquired.

Financial Information:

Had sales of £18.7m ( 27m) in 2004 and made a net loss of £520,000 ( 758,000).

The company's turnover rose to £26m last year, according to Stephen Hutchinson, on which it expects to make a small pro"t.




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