Adding Value with Brands
Mackie's of Scotland, based at Rothienorman in Aberdeenshire, is a well known ice cream manufacturer.
The Taylors have been farming at Inchture in Perthshire since 1927 and their company, Taypack, is one of the UK's biggest potato growing and processing businesses.
One of the Mackie's goals is to maximise the value of its brand and to diversify into other markets. All of the company's research pointed to premium crisps - a market in which there was no other Scottish company. Russell and George Taylor of Taypack had also identified the same gap in the market and they realised that both companies could definitely benefit if they worked together. It was agreed to create a new joint venture company - Mackie's at Taypack.
The two businesses quickly realised that they had a lot in common:
- both wanted to grow their companies -Mackie's by maximising its brand and Taypack by maximising its product value
- both had identified the premium crisp market as a growth opportunity
- both had similar corporate values across important issues like product quality, treatment of staff and environmentally friendly management.
But whilst they could see the benefits of a joint venture, they also realised that they needed some help to hammer out the detail of the shareholders' agreement.
SAOS, through its Cultivating Collaboration (C2) project, provided help and expertise to both parties, acting as an independent facilitator.
The benefits for each company made the joint venture a much more attractive, and stronger, option than going it alone.
The new company - Mackie's at Taypack - employs nine people, with Kirstin Mackie as Managing Director and her sister Karin Hayhow as director with responsibility for marketing. Russell Taylor is Chairman and his son, George, and Kirstin's brother, Mac, are the other directors.
The overall objective is to grow Mackie's at Taypack sales to £3 million within two years and to increase the number of employees to 15. They aim to secure listings with the major multiples, independent retailers, delicatessens and wholesalers and and to investigate export opportunities. The company will also continue work on new product development within the snacking sector.
Key points from this case study:
- a joint venture can increase the scale and volume of a new product at an early stage
- a third party helped the companies to develop the terms of the agreement
- a similar pedigree and values can be very important to a collaborative relationship
- both parties must be able to see a clear opportunity for growth
- trust and openness are essential to maximising the opportunity
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