Debbie and Andrew Keeble, who sold their food business to a bigger player, warn that giving up control of your brand can leave a bad taste in the mouth - and explain why they won't be making the same mistake again.
And they lived happily ever after” might apply in fairy tales, but there’s no guarantee of a storybook ending when you sell your business.
Debbie and Andrew Keeble, former Yorkshire pig farmers who set up a successful sausage business under their own names in 1999, are about to start all over again with a new range of bangers called Heck, after parting ways from the owners of their original brand.
“It’s quite a difficult position, building a new brand without using your own name and knowing you’re competing against your own name, even though it’s not actually you anymore,” said Mrs Keeble.
The Keebles sold the Debbie & Andrew’s brand to a larger food manufacturer called JJ Tranfield in 2005, after six years in which they went from experimenting with recipes at their kitchen table to selling £2m of sausages a year through all the major supermarket chains.
Despite this growth, the couple had begun to feel frustrated by the speed of expansion they could achieve on their own.
“We always thought somebody out there had a magic key, had all the answers and could open all the doors and we wouldn’t have to waste money doing things and not getting anywhere,” said Mrs Keeble.
Under the deal with Tranfield, the Keebles sold all of their shares, but stayed on as managing directors of the Debbie & Andrew’s brand under a five-year deferred payment scheme, based on the brand’s profits over that time.
“Our future wealth depended on how well we ran the business so we wouldn’t have handed it over to anybody else,” said Mrs Keeble. “It was also the provenance of the brand, it was our name on the packet. All the recipes and methods of production were under our control.”
The deal gave them access to the resources of a bigger company, its distribution system and stronger buying power. The new owner also wanted to invest in the brand because it was making own-label sausages for one big supermarket and didn’t have much access to the other chains, and lacked a premium brand to sell.
Everything went as planned until 2007, when Tranfield ran out of money and was quickly taken over by the Dutch large-scale meat producer Vion. There were still three years of the Keebles’ agreement to run, but there were obvious differences in the two companies’ priorities from the outset.
“Volume and quality don’t necessarily mix,” said Debbie. “With a small branded business and a large volume business, there's no gel. It was difficult because the new business didn’t choose us, they’d acquired us. From their point of view it wasn’t the ideal merger either.”
In 2011, the Keebles’ sale and purchase agreement ended and Vion also closed the factory in Sheffield where the Debbie & Andrew’s brand was being made and moved production to Broxburn in Scotland.
“The production processes changed, and the methods and the ingredients,” said Mrs Keeble. “We lost control over what went into the sausages and we felt very uncomfortable. We felt like we were misleading customers.”
Mr Keeble resigned in early 2012 when the couple felt their roles had been reduced to almost nothing, and Mrs Keeble left later in the year.
They have been trying to buy the brand back for a couple of years to no avail. It is now up for sale, with multi-billion pound meat producers interested, said Mr Keeble, but last week the Keebles were told it wouldn’t be sold to them.
Undeterred, and with no contract restrictions, the couple have already developed a new brand, aimed at younger shoppers. The Heck range includes chorizo, bratwurst and skinless sausages, which can be used to make meatballs and other dishes, as well as traditional pork sausages. They are all made from British pork apart from a French black pudding, and there is a fair price agreement with the farmers who supply the meat.
The Keebles have rented manufacturing space in North Yorkshire, bought new sausage-making equipment, and applied for a Defra grant to help cover the cost.
However, the main investment of around £200,000, all self-funded, has been made in the branding and packaging. The couple have come to the conclusion that this is the “magic key”.
“Last time we started with a sticker on a packet. We had to learn about brands and marketing, and pay for it as we went along,” said Debbie. “Now (Other OTC: NWPN - news) we know what a brand is and the value of it, that it has to stand for something and you have to protect that.”
Two of the Keebles’ sons, aged 23 and 20, are working with them on Heck, and the aim is to have minimum sales of around £3m in the first year. They are in talks with all the major supermarket chains for national listings and Ocado want to stock the range.
Over five years and beyond, the couple want to get to revenues of £10m “as quickly as possible”. This time, they are committed to growing under their own steam and keeping ownership of Heck within the family.
The name of the brand comes from the attitude the Keebles have adopted.
“The learning from selling a business is that ultimately you do lose control, no matter what’s built into the contract,” said Mrs Keeble. “If you’ve sold your shares, there’s not much you can do.
“We could have carried on trying to buy back the old brand until our dying day, but at some point we had to say 'what the heck, we’ll go and do it again’.”