Crunch Time at Crisp Maker Golden Wonder
By Adam Durchslag
CRISPS maker Golden Wonder must be kicking itself that it never hired former footballer Gary Lineker. Instead, he fronted an advertising campaign that saw Golden Wonders arch-rival, Walkers, grab its market share and force the crisps company into administration. Walkers, owned by PepsiCo, now controls more than 50% of the UKs crisps market, which is worth some Pounds 2bn (E2.92bn, $3.54bn).
In 2004, Golden Wonder reported a loss of Pounds 10.8m on sales of Pounds 87.8m. During 2005, the crisps companys losses worsened. This was bad news for Golden Wonders chief executive, Ed Jackson, who in 2004 was brought in to turn the company round. No longer able to sustain substantial losses, Golden Wonders British owners Longulf were last week forced to call in the administrators in the shape of Krolls corporate advisory and restructuring team.
Despite owning brands such as Ringos, Golden Lights, Wheat Crunchies and Nik-Naks, Golden Wonder is seen as hard to sell, after repeated attempts to do so last year failed. The question is why would a buyer want to purchase a company that is doing badly, that has lost market share and suffers from expensive production.
All is not lost, however. Sixty parties, including private equity players, have expressed an interest in buying brands on the cheap. Irish crisps manufacturer Tayto confirmed Friday it had bought Golden Wonders Corby manufacturing unit, which makes Pringles Minis for Procter & Gamble. Of 350 jobs, 195 have been safeguarded at Corby. But the Corby operations that make crisps for supermarket labels are being moved to Scunthorpe in an effort to trim waste. Inevitably, Golden Wonders 850-strong workforce is braced for redundancies.
Founded 50 years ago by Scottish baker William Alexander, Golden Wonder has since brought into the world such wonders as Wotsits and Pot Noodles. The company has had several owners over the past half- century, including Imperial Tobacco and private equity firm Bridgepoint Capital.
In 2002, Bridgepoint sold most of Golden Wonder to Longulf, and Wotsits to Walkers. Pot Noodles went to CPC and is now owned by Unilever. Golden Wonder has lost its Midas touch.