MY BIGGEST mistake was trying to sell salted porridge to the English in the early 1960s. I think it was 1964 and we had just taken on a new sales manager from Nestle called James Allen, a six-feet-four Canadian. I had hired him on the princely salary of pounds 4,500 a year, compared with the pounds 3,750 Nestle was paying him as general sales manager.
At some stage James, who was a close friend, chanced upon our experimental kitchen where my wife was preparing some porridge. He tasted it and said, 'Gee, Ena, that's great stuff. We ought to be selling it in a can.'
I said we ought to test- market it first, but if the reaction was positive we could try it out on a larger sample.
Later my wife and I went to Australia on a sales trip. We travelled around the David Jones stores in Sydney with our products - plus kilts, bagpipes and the full works. If you're going to push sales, you might as well put on a first-class Scottish show.
While we were there we received a telegram from James saying that the porridge trials had been successful - and could he make 10,000 cases to send to shops?
I thought if the market research had gone well, then we should go ahead. So the plant in Speyside began making 15-ounce tins of Baxters porridge with cream. Baxters then sold a big order to Fine Fare, which was being run at the time by Jimmy Gulliver.
To cut a painful epsisode short, it didn't sell. We had used the Scottish recipe for porridge - with salt - even though we knew that the English palate was different, and that they preferred it with a touch of sugar. We had used the Scottish recipe even though England was going to be 90 per cent of the market. That was our great mistake.
In the end, Jimmy Gulliver said to me: 'Gordon, I can't sell it. We're going to have to clear the shelves.'
We had to take all of it back. It was a painful experience, because we were poor as churchmice in those days and the business only had a turnover of pounds 1.5m.
But we did learn a lesson: don't make what you want and then try to sell it.
Find out what the customer wants and then go and make it. It's a pretty basic tenet of business, but often easy to overlook.
In the old days when Baxters was just a wee business and my wife was making a soup, we would just take it round to a few of our friends in the grocery business and ask them for their views.
The retailers are a bit more sophisticated today, and market testing has to much more rigorous. I'm sure if we had made tinned porridge with a little sugar, it would have been a winner.
Now Baxters is a pounds 40m business and we have about 20 chefs, cooks and technologists working in the kitchens on a host of soup, jam and sauce recipes. Everything is well tested, and not just on our friends.
The old favourites, such as Royal Game soup, invented by my mother in 1929, still sell well. In recent years we have added succesful new recipes to the range, including our vegetarian and Healthy Choice high-fibre soups and Pour Over sauces.
Earlier this month I decided to step down as chairman of Baxters and become president of the company. After leading Baxters for 48 years I now plan to play a public relations role and spend a bit more time fishing. I will also advise on new business programmes and continue to be repsonsible for the highly successful visitor's centre we have on the banks of the River Spey.
Joe Barnes, formerly joint managing director of Sainsbury, succeeds me as chairman. Not only does he have great retail experience but he loves Scotland and is a fine salmon fisherman.
His role is to build on the strengths of the company and to provide guidance and development opportunities to the younger members of the family so that the chair will, in a few years, be filled once again by a family member.
My son Andrew Baxter is deputy chairman, and my daughter Audrey is group managing director. They reprepresent the fourth generation of Baxters.
They are too young to remember the porridge episode but I have related the tale to them so they can avoid similar mistakes.