Creating a market
A Bernard Matthews case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 5: Capital investment

The capital investment for the new hitech factory in Norfolk was £6.5m in 1992, making this the company’s most expensive production line. This was followed by two further factories, one in Norfolk and the other in Hungary, at a total capital cost of around £20.5m. Although this spending may initially have been difficult for the Board of Directors to justify to the shareholders, they have since been well-rewarded for their risk taking. The total value of the market for cooked meats has increased by 36% in six years to nearly £1bn, but more importantly for Bernard Matthews Plc, its share of that market has grown. One of the most significant changes within the market has been the growth in pre-packed meats against loose meats - probably a result of recent food scares and the danger of having cooked and uncooked meats at the same counters in supermarkets. The prepacked sliced cooked meats market is currently worth £504m and is growing at a rate of nearly 13% per annum. The supermarkets’ own label products still account for over 80% of sales, but the market has also witnessed some noticeable shifts in consumer taste.

In 1992, the year Bernard Matthews Plc entered the market, pre-packed wafer thin sliced cooked meat was virtually unknown, but by 1997, it accounted for nearly 36% of total sales. Although ham remains the consumer’s first choice, there has been significant growth in the market for other meats, notably turkey and chicken. Prior to 1992, turkey products in this form had been virtually nonexistent, but it now accounts for nearly 20% of sales and are growing at a phenomenal rate of 33.6% each year. Within this sector, Bernard Matthews Plc has come to dominate the market. Although supermarkets have been quick to recognise these trends and create ‘me-too’ products, Bernard Matthews Plc produced 49% of all sliced cooked poultry sales in 1997, with its nearest rival, a national supermarket own brand, providing just 13%. Bernard Matthews Plc supplied 66% of all prepacked sliced cooked turkey products with its nearest competitor supplying just 7%. It could be argued with some justification that Bernard Matthews created a new market and was responsible for ‘changing the face of the cooked meats cabinet’.

Future developments

Bernard Matthews Plc recognises the need to develop and grow. All businesses must guard against complacency and have clear strategies for the future. Bernard Matthews Plc aims to keep one step ahead of the retailers by keeping a close eye on consumer trends and introducing new, innovative products on a regular basis. In particular, Bernard Matthews intends to try to extend its distribution network in all areas and extend the range of turkey products. Chicken and pork products will extend the Matthews brand name into other cooked meats sectors. Sliced ham remains the most popular cooked meat product with 52% of the market and this could become an attractive target. Special branded products are under development for the delicatessen end of the market. Plans are already in place to expand into other countries, with test marketing underway in France, Germany and Italy, and in the future Austria and Switzerland.

Bernard Matthews | Creating a market