Just a few days before came the appointment of George Bull, the former head of its IDV drinks subsidiary, as new chief executive. Both steps were further evidence - if any were needed - that Grand Met plans to concentrate on the development of its global brand names.
'It is my intention to position Grand Met very firmly as a market-oriented company,' says Bull. 'Today marks the beginning of a new future. (The board) is buying in to the knowledge that I am not a bean counter. I am a sales and marketing man, and have been all my life.'
In fact, Grand Met has already undergone something of a revolution. It pulled out of the hotel business with the disposal of the Inter-Continental chain in 1989 for pounds 1.35bn - a fantastic sum, given the state of the industry today.
Now, with the pounds 830m sale to Scottish & Newcastle of its Chef and Brewer outlets and the property interests in a further 235 pubs owned by Inntrepreneur, its joint venture with Courage, the group has turned its back entirely on its roots. Yet, in jettisoning steaks and ale for the added value of Haagen-Dazs ice cream and J&B scotch whisky, it has also stayed faithful to the tradition of inspired opportunism first established by Sir Maxwell.
Under his chairmanship, Grand Met grew rapidly from a small hotelier. By 1963, it was London's largest chain. But the acquisitive Sir Maxwell, a former estate agent whose career had been interrupted by a stint in the army during the Second World War, was not one to pass up on a bargain. So in 1966, when Levy & Franks, a grocery and off-licence business, came on the market, he snapped it up. With Levy & Franks came the Chef and Brewer bar-restaurant business, which gradually developed into one of the group's more successful activities.
However, it was the acquisition of Watney Mann six years later that was to prove more significant in shaping Grand Met's current management and philosophy. At the time it was thought that Sir Maxwell had massively over-extended himself - as indeed, he had - but the gamble paid off. The bitterly contested takeover brought one of Britain's largest breweries on to the group's bar counter. It also secured International Distillers and Vinters (IDV), the clutch of gentlemanly drinks companies that Watney Mann had just acquired, although this seemed an incidental gain at the time.
IDV already had several well-known names in its portfolio and during the 1970s the company concentrated on expanding its product range. Combining its know-how with that of Express Dairies - another branch of the sprawling Grand Met empire - it developed the best-selling Baileys Original Irish Cream.
Since then the company has made further acquisitions and innovations, with labels such as Metaxa, Cinzano and Malibu now in its cabinet of drinks.
IDV has also proved clever at exploiting new trends. It has moved into the market for ready-mixed drinks in the US,
and was quick to latch on to the cult for designer water with the creation of Aqua Libra. Despite the hints of alpine freshness on the label, this distinctively flavoured beverage is produced at IDV's factory in unromantic Harlow.
However, its greatest success was the promotion of J&B Rare, a whisky that had acquired a certain cachet as the Duke of Windsor's preferred tipple. In line with the strategy first formulated by Sir Anthony Tennant, who headed the company from 1977 to 1987, IDV focused on profitability rather than volume - then the drinks industry's normal measure of success. The tactic paid off. With sales of 6.2 million cases in 1992 and a market share up from 8.6 per cent to 11.3 per cent since 1986, J&B Rare has become the world's second most popular whisky.
IDV now owns 11 of the world's top 100 spirits brands, including Smirnoff, the number one name in vodka, which it secured with the acquisition of Heublein for dollars 1.3bn ( pounds 0.8bn) in 1987. The purchase was Sir Stanley Grinstead's parting shot as chairman of Grand Met and has proved a masterstroke, with profits from Heublein's brands now well above the purchase price.
From being an incidental acquisition, IDV has thus become the biggest single source of profit in Grand Met's portfolio. Last year it generated pounds 2.86bn, or 40.5 per cent of the group's pounds 8bn turnover, making pounds 505m or 56 per cent of operating profits. In the past decade, profits have risen at a compound growth rate of 19 per cent and it is now the most profitable wines and spirits company in the world.
This achievement is all the more remarkable given a slow decline in global spirit consumption and aggressive competition from rivals such as Seagram and Guinness. Yet, despite the ferocity of the liquor wars, IDV's market share has risen over the decade from 11.3 to 11.9 per cent.
Sir Anthony, who left to head Guinness when he was beaten to the top job at Grand Met by Sir Allen Sheppard, deserves much of the credit for putting in place the strategy that started this climb. However, Mr Bull was to prove every bit as adept a successor. From 1985 - his first full year as IDV's chief executive - to 1992, when he moved to the food sector, Mr Bull presided over a 17 per cent increase in turnover and a 23 per cent increase in trading profits in the drinks business.
Formal recognition of his achievements came with the recent statement that he would take over as Sir Allen's heir apparent, ousting Ian Martin, the group's chief operating officer. This rejigging of the top team took the City by surprise but has since received widespread endorsement, despite an initial drop in the share price - fuelled by suspicions of bad news to come.
'George Bull is a considerable international manager. He's shown his skills are transferable, with the move from IDV to the foods sector,' says David Thompson, industry analyst at Kleinwort Benson. His personal attributes are no less important. 'Bull is a tremendous enthusiast. He sweeps into the room, has a booming voice and a very strong presence. He's a big man in every sense,' says Kevin Feeney of Henderson Crosthwaite.
But it is also no coincidence that he has spent much of his working life at IDV and is steeped in the marketing of international brands. This complements the direction in which Sir Allen has been steering the group since taking over in 1987.
'IDV's success has helped to form a view at Grand Met that we are a branded company and that is the way of the future,' Mr Bull concedes, although he cautions against any suggestion that the company offers a blanket blueprint for developing brands elsewhere in the group.
He insists that his own role is not prescriptive. 'The one thing I think I can do is create the right climate,' he says, and talks of unleashing 'the undoubted resources, intelligence and get-up-and-go of the people on the ground'.
For examples of added value outside the high-premium drinks business, he points to new products in the pipeline at Burger King, which Grand Met acquired with Pillsbury in 1989. He also cites the ubiquitous Haagen-Dazs ice cream and the promotion of Green Giant vegetables as the 'hero rather than the side-dish', with the development of prepared frozen foods in the US.
In fact, the metaphor is equally apt in relationship to Mr Bull himself. A by-product of the IDV acquisition, he joined IDV in 1961, 11 years before it was taken over with Watney Mann.
Both IDV and he have since become the hero rather than the side dish, as indeed has Sir Allen who also entered the group via Watney; an ex-Ford manager, he joined Grand Met in 1975 as chief executive of the brewery.
In 1987 he emerged as Sir Stanley Grinstead's successor and, more importantly, someone who was ready to depart from the prevailing Sir Maxwell Joseph ethos. Though Sir Stanley proved a very able chairman - not least with the bid for Heublein - he had remained faithful to his predecessor's philosophy of bargain basement acquisitions. It was the much more high-profile Sir Allen who began to organise the portfolio and sell off non- core interests, including Watney itself. Like Sir Maxwell, however, he had a knack for spotting opportunities.
That very opportunism has now changed Grand Met into something almost unrecognisable from its earliest days. Indeed, as the appointment of Mr Bull effectively acknowledges, the tail has now come to wag the dog.
(Photograph omitted)Reuse content