Jordans leaves its independent roots to go global with ABF

Jordans, the cereal maker, is the latest “eccentric” start-up that has sold itself to a major corporation after decades of being resolutely independent. It joins Green & Black’s, now part of Cadbury, and Ben & Jerry’s, owned by Unilever, as an independent that punched above its weight but sold out in the name of increasing its scale.

Until last week, Jordans was the UK’s largest privately-owned cereal manufacturer, although ABF bought a 20% stake in the company last September for £15m. It was the first indication that the Jordan family, which launched the company 36 years ago, was considering a different approach to expansion.

A company spokesman says that the Jordan brothers, Bill and David, have been considering options for the company for the past four or five years and selling the 20% stake to ABF was a “bit of a test”.

The brothers wanted to be sure that if Jordans was merged into ABF it would “stick to its values” of natural ingredients and caring for the countryside. Eight months on and both sides felt it was time to develop it further. Bill Jordan, who came up with the original idea of extending the family milling business into cereal after discovering granola while travelling California, will sit on the ABF board. His brother will work with ABF on new product development.

Skills for expansion

The spokesman says: “It took entrepreneurial skills to set it up but different skills are needed to develop it on a bigger platform.” The brand has already expanded into the US, Canada, Benelux and France, where it the number-three adult cereal brand.

Jordans will sit alongside ABF brand Ryvita in a standalone “better-for-you” division, in which ABF takes a 62% stake in return for professional skills, and the Jordan brothers the remaining 38%. The division will sit alongside its hot beverage group, which includes Ovaltine and Twinings, and its world foods division, which includes Blue Dragon and, more recently, Pataks.

The merger with Jordans echoes its deal with Indian food brand Pataks. The Pathak family remain actively involved with the business with Kirit Pathak, who was the managing director of the company, as chairman of ABF’s world food group. His wife, Meena, is also a director of the division.

ABF also owns Silver Spoon sugar, a number of cooking oils, animal feeds and the budget retailer Primark. Some analysts describe it as “solid but steady”, but its strategy of developing “clusters” of similar businesses and the deals it has done with small, family-owned brands are applauded by the City.

Keeping the brothers on board

Martin Deboo, consumer goods analyst at Investec, says ABF, which is 80% owned by the Weston family, is a “good business, firm but supportive”. He adds: “If you think about how this plays out, the Jordan brothers have a share in something valuable and an incentive to make it work. It has got them on board and kept them interested.”

An ABF spokesman says that the company may have a steady strategy but that it can do deals with companies like Jordans is because it is “in control of its own destiny” and has a flexible approach. He adds both the Pathaks and the Jordans were persuaded to get involved with ABF because it is still led by the Weston family and its values.

ABF has no centralised head office function, but it is thought there will be some integration of Jordans head office with ABF, and it is understood that a consultation with staff is in its early stages. There is scant detail about future plans, such as co-branded products, although both sides are adamant that the ABF and Jordans brands will both remain.

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Tom Fishburne is founder of Marketoon Studios. Follow his work at marketoonist.com or on Twitter @tomfishburne See more of the Marketoonist here

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