Source: The Grocer

Tyrrells To Get The Dorset Cereals Treatment

Premium crisps brand Tyrrells was snapped up by private equity firm Langholm Capital in April, with the £40m price tag proving the City still has an appetite for food companies with healthy growth prospects.

Langholm plans to double Tyrrells’ £13m sales within the next two years, investing millions of pounds in its Herefordshire facilities to boost capacity. A fourth production line will open up the market for the brand, allowing it to expand beyond the delis and farm shops where it made its name. It is already sold in Sainsbury’s, the Co-op and Waitrose.

New types of vegetable crisps are also in the pipeline. An increased focus on overseas markets should also help it achieve its sales targets.

The analogy between Tyrrells and Dorset Cereals - which Langholm sold to Wellness Foods for close to £50m in March is striking. The sale delivered a fourfold return on investment for Langholm, which used a packaging overhaul to reinvent Dorset. Tyrrells, however, already has a sound brand proposition, meaning the same treatment is not necessary, says Langholm. Instead, it will promote the brand at food festivals and play off the subsequent word-of-mouth advertising.

"The important thing is to be true to our original ethos," says the managing director. "We want to grow profitability, but in a sustainable way. We’re the only brand that owns its own farm, grows the potatoes and makes the crisps on site - from seed to chip. That’s why consumers have an emotional link to the brand."

Source: The Grocer

Product News: Langholm Eyes Serious Sales Growth At Tyrrells

Tyrrells is to ramp up its distribution through the multiples - and may even seek listings in Tesco - in an attempt to double sales in the next few years.

In an exclusive interview with the Grocer, new owner, private equity firm, Langholm Capital said that it hoped to "do a Dorset Cereals" with Tyrrells, which it bought last week for close to £40m.

"Tyrrells is not well distributed with sales mainly through delis and farm stores," said Langholm principal, Oliver Wyncoll. "We can pick and choose in what sequence we increase that and we plan to make it widely available through the independents and multiples as well as exports.

Although Wyncoll would not single out Tesco as a potential stockist, he said greater capacity would enable wider roll-out beyond Sainsbury’s and Waitrose.

Wyncoll said the £13m turnover company was poised for strong growth. The analogy with Dorset Cereals, which Langholm sold to Wellness Foods for close to £50m in March, was striking, he said, adding that Langholm hoped to achieve the same growth as with Dorset. The cereal brand increased sales by 50% in one year from £13m to more than £20m between 2006 and 2007 and delivered a four-fold ROI.

Langholm would significantly invest in facilities, in line with the £3m it ploughed into Dorset, he said. Innovation would focus on new vegetable crisp varieties. Building awareness of the brand would be key. As with Dorset, it would focus on "communicating the brand story" at food festivals and by word of mouth.

However, no packaging overhaul was planed. "With Dorset, a brand had to be created. Tyrrells is probably 18 months ahead of that."

Source: The Grocer

Langholm is eyeing more food brands

Despite fears of a deepening credit crisis, Tyrrells’ new owner Langholm Capital is hoping to snap up more food and drink brands.

Langholm, which acquired the premium crisps brand last week for about £40m (as revealed by The Grocer, 8 March), said it was not put off by the credit crunch.

"There are always businesses that can buck the trend and are good growth opportunities," Langholm principal Oliver Wyncoll told The Grocer. "We are on the lookout for brands we can develop. They don’t have to be niche players such as Tyrrells, as a mass market operator that has a good management team but is in need of brand development also makes a good strategic acquisition."

Langholm is intending to double the size of the £13m turnover brand.

Source:          The Manufacturer

Tyrrells founder sells up for £30m

The founder of premium crisp maker Tyrrells has sold his company to private equity firm Langholm Capital for £30m (€59m).

Six-year-old Tyrrells was the first to introduce root vegetable crisps to the premium crisp market - a market that has been growing increasingly popular, accounting for 15% of the overall crisp market, which is valued at £1.3bn.

The rapid increase in demand has mirrored consumer desire for better quality and healthier versions of the traditional crisp product.

Bert Wiegman, partner of Langholm Capital, said he will be looking to invest in improved production and distribution processes at the farm-based factory to allow the company to meet the rising demand.

Source:          Private Equity Online

Langholm Buys Upmarket Potato Chips

The consumer business mid-market buyout firm has bought Tyrrells Potato Chips, as buyout firms look to tap into the growing UK demand for more exotic products.

Langholm Capital, a UK consumer mid-market buyout firm, has bought Tyrrells Potato Chips, a UK crisp company.  Terms were undisclosed, but a City source said Langholm had paid more than £30m ($59.2m;€37.5m).

The business’ founder has retained a significant stake in the business. He has farmed potatoes in Herefordshire for the last twenty years and started making premium chips in 2002, using his home-grown potatoes.

The business has grown to a turnover of £13m in the year to March 2008.  The company’s products are distributed across the UK and abroad in farm shops, delicatessens, and other upmarket outlets.  Tyrrells uses more risqué potato varieties like Lady Rosetta to appeal to the growing demand in the UK for more exotic crisps, according to a spokeswoman.  The company has also developed parsnip, carrot and beetroot chips as well as flavours such as asparagus and crushed black pepper, and Ludlow sausage with wholegrain mustard.

The spokeswoman said: "It’s a great brand, that’s been doing well, and Langholm wants to take the business further by increasing production and then distribution."

Upmarket crisps have been popular with private equity firms, and buyouts include Lion Capital’s acquisition of Kettle Foods, a US maker of premium crisps and snacks, in 2006 for between $280m (€218m) and $320 million.  Other outfits have tapped into the UK demand for lifestyle food goods, such as Phoenix Equity Partners, which acquired organic box company Abel & Cole last year.

Langholm’s previous investments include Dorset Cereals, which under Langholm’s ownership became the second most popular muesli brand in the UK, as well as the fastest-growing mainstream breakfast cereal company overall in 2007, the spokeswoman said.  Although no financial details were disclosed, Langholm made a further four times return from the sale of Dorset Cereals in three years, according to a source close to the deal.

Set up in 2002, Langholm is investing its first fund of almost €250m ($395m), which was raised with the backing of consumer giant Unilever, and the specialist food and consumer goods bank, Rabobank International.

Langholm Capital acquires majority stake in Tyrrells Potato Chips

A potato farmer from Herefordshire, has pocketed about £30m ($59m) from selling Tyrrells, the premium crispmaker he founded six years ago, to Langholm Capital, the private equity company.

The deal, signed on Friday, values Tyrrells at about £40m, reflecting the fast-growing demand from consumers for a better quality and more healthy alternative to the ready salted crisps or pork scratchings that were once the staple diet of British snack eaters.

Langholm Capital, the mid-market buy-out fund backed by Unilever and Rabobank, aims to repeat the success it achieved with Dorset Cereals, the upmarket muesli brand that it sold last month for £50m, a four-fold return on its equity investment.

Bert Wiegman, partner of Langholm Capital, said: "This trend of people wanting better quality, more healthy, more organic and better packaged products is one that we see across different sectors."

The market for premium crisps, dubbed "chips", is growing at double-digit rates and now accounts for about 15 per cent of the entire £1.3bn crisps market, which has been stagnant for several years.

Kettle Chips was the first to pioneer a premium chip product, forcing Walkers to respond by launching its own Walkers Sensations brand. Tyrrells was the first to introduce root vegetable chips, made from beetroot, parsnips and carrots.

Mr Wiegman said he planned to invest in improving Tyrrells distribution and production systems to allow it to cope better with fast-growing demand at its factory. Tyrrells had sales of £13m in the year to March.