An adventure in Wonderland
He liked the product so much he bought the company ... Golden Wonder's new boss is after a bigger bite of the snacks market, as David Bowen discovers; profile
Sunday 29 October 1995
The deities saw how struck he was that day, and have made sure the past 25 years of young Clive's life have been an inevitable convergence with the job he landed last week: to run, and part-own, the Golden Wonder company. For three months the amiable Sharpe has been negotiating to buy it from Dalgety, and last week he finally completed the pounds 55m deal.
He knew only 10 days ago he had beaten off the competition, and is only just getting used to the idea that, at the age of 38, he is responsible for a company with sales of pounds 150m, pre-tax profits of pounds 9.1m, and for the lives of 2,000 people. The food business may not create many headlines, but it is big business. The snacks and crisps industry alone turns over pounds 1.5bn a year in Britain, and Golden Wonder is responsible for a tenth of that: its two factories produce 32 million noisy packets a week.
Having invented the flavoured crisp and so knocked Smiths with their little blue salt-bags off their perch, Golden Wonder did wonderfully well and grew to take 40 per cent of the "bagged snack" market in the Seventies. But it suffered from being a subsidiary of the sclerotic Imperial Group, and it failed to fend off growing competition. In 1986 Hanson bought Imperial to put it out of its misery, and Golden Wonder was resold to Dalgety.
Sharpe joined the crisp company in 1985 as a marketing manager. His background was typical working-class-boy-made-good-thanks-to-grammar-school. His father had been a sergeant- major, his mother was a tailor. Clive was bought up in a happy family which, he says, "was fundamental in giving me the confidence I have in myself". He won a place at King Edward VI, a direct grant school in Southampton. It is now independent which, he notes, would stop boys like him going there these days.
It was probably his down-to-earth background that encouraged him to make a series of sensible decisions at a time, the Seventies, when pragmatism among the young was a rare commodity. He was particularly good at Latin, but ignored his teachers and took economics, maths and statistics at A- level. By the time he was 18 he had decided he wanted to go into business - he thought it would be more varied than the civil service or law, and would also be more competitive. "I played a lot of sports at school," he says. As a result he chose a practical if unglamorous business studies course at Leicester Polytechnic.
His decision to go into the food business was equally rational. "The best marketing training was in fast-moving consumer goods." In addition, while much of British manufacturing industry was wracked with recessionary crisis in the early Eighties, food was scarcely affected.
He worked for the Co-operative Wholesale Society for a year, then switched to Quaker, where he spent five successful years marketing pet food and Sugar Puffs. Moving to Golden Wonder as marketing manager, he discovered that the food industry was not without drama. He started work just as an eight- week strike was finishing. Shortly afterwards Hanson pounced, and soon after that he found himself working for Dalgety. Then in 1988, just as the management had the business running reasonably smoothly, a factory in Corby burnt to the ground and half Golden Wonder's crisp production was knocked out. The frantic rush to replace supplies gave him useful experience in crisis management and also brought him close to the new chief executive of the company - Jack Rowell, who now manages the English rugby team. It helped that Sharpe was a rugby player.
He moved out of pure marketing in 1991 to take charge of Golden Wonder's pot noodle division, and last year was made chief executive of a separate Dalgety subsidiary, Homepride. But the job changed abruptly early this year when the group bought his old employer, the Quaker pet food business, and decided to sell off both Homepride and Golden Wonder. He was given the job of selling Homepride's business piecemeal, and by summer had reduced it to a rump.
But, he noticed, the Golden Wonder crisps business was proving harder to shift. During the Homepride sale negotiations he had got to know a number of venture capitalists, and he approached them and Dalgety's management to ask about a management buyout. They were encouraging, and he and a team of managers drew up a business plan. Legal & General agreed to back him - and the rest is history.
There is no point in buying a company unless either you can pick it up cheaply, or there is room to make it more profitable. Sharpe says he can make more money. Golden Wonder's share of the snack market is now down to about 10 per cent, and he thinks he knows why. "Business strategies are fairly easy to come up with," he says. "The difference is in the implementation. The equipment in our factories is much the same as in every other crisp factory, but the way you use it makes the difference."
The process of making a crisp is not particularly complex, but streamlining it so that the quality and speed are as good as possible, takes application and teamwork. "Golden Wonder's decline was down to not managing the supply chain," he says.
He believes the food business, despite its slick marketing skills, is behind other industries in its understanding of the importance of its staff. "When I went to Homepride I was told the people were rubbish," he says. "That was wrong. I start from the premise that most people want to do a good day's work, rather than believing that they're lazy buggers."
Golden Wonder has seen its staff morale slump. "For the last three or four years, it hasn't been a lot of fun for the people here," he says. This has been particularly serious for a company that makes a "fun" product, Sharpe says. He does not intend to walk around cracking jokes, but he does believe that if the company is happier, profits will follow.
Treat the staff as intelligent beings, he says, and the business will do better. "I don't like the expression 'human resources': it makes people sound like machines." He wants to get more involved with the customers too - he admires American freephone lines, whereby people can ring to complain about their soggy snacks. All this is radical stuff in the conservative food business.
It helps that Sharpe loves his crisps (salt and vinegar are his favourite), and he is full of facts and figures about them. Britain is the second biggest consumer of snacks per capita, though we eat barely half as many as the Americans do. Despite forays into tandoori chicken-flavoured crisps and the like - and the arrival of Phileas Fogg's exotic variants - the British public is conservative: plain, salt and vinegar, and cheese and onion have been the favourites for many years.
Did you know, too, that the crisps you eat are on average four to five weeks old - and they have been deteriorating from the moment they are made? That foil packing is more than an excuse to charge more: it stops the light getting in, and therefore preserves the freshness? That crisps are made from special potatoes, which are drier than normal ones (the Record is the standard potato, although researchers are trying to breed a replacement to make the perfect crisp)?
Fortunes have been made by managers buying companies then selling out for a huge profit later. Sharpe says he would like to become rich, but is not counting on it. "If I went into Golden Wonder only to make a lot of money, I wouldn't succeed. If you achieve the goals you have set yourself, the side-effect is that you get rewarded." And although management buyouts can be a quick way to make a lot of money, he says, "if they don't succeed they are also the quickest way to lose it".
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