Web Page No 2476
19th May 2018
First Picture: An early Smiths Crisps Packet
Second Picture: An Early Advert
Third Picture: 1960’s advert
Fourth Picture: A tin of Crisps!
Now here is something to get all nostalgic about, those strange packets of Penny Crisps. From memory these were filled with broken crisps and crisp pieces but were half the price of the normal packets of Smiths Crisps. Smiths were the only manufacturer in those days.
The normal packet of crisps, as can be seen from the illustration, cost 2d a packet so the 1d packets were a great saving and I am sure that my local tuck shop, Shaw’s on the corner of Highlands Road and Solent Road must have sold hundreds of them, if not thousands. These 1d packets were easily identified as they came in the usual greaseproof packet with printing on them but whereas the normal packets had coloured printing on them, the 1d ones were only printed in black. Unfortunately, I have yet to find a picture of those 1d packets.
Today, Walkers dominates the British crisp market, this wasn’t always the case: Smith’s Crisps supplied almost every pub and hotel in Britain in 1949.
Frank Smith (1875 – 1956) began his career as an apprentice grocer in London. He was promoted to manager of a small crisp department at a Smithfield wholesale grocers. He entered crisp manufacture for himself from 1919, raising £10,000 with two friends.
The first factory was a disused garage in Cricklewood. The fledgling business had a staff of twelve in 1920. The enterprise proved successful enough that Smith only had to spend £6,000 of his initial capital: further expansion was funded entirely from profits. Additional factories were opened in Portsmouth, Birmingham, Paisley and Stockport in 1921. Smith’s Potato Crisps went public in 1929, by which time there were seven factories. All of the early output went to hotels and pubs, and this would remain the largest market for Smith’s until the 1960s.
By 1934, 200 million packets of crisps were sold in Britain each year, 95% of which were manufactured by Smith’s.
To ensure supply, Smith’s acquired 8,000 acres of farmland in Lincolnshire, which provided around10% of the company’s potato requirements. Due to crop rotation, only between 1,000 to 1,200 acres were used for potato production at any one time. It was the largest farm under single management in Europe.
During the Second World War the majority of production went to the military.
By 1949 Smith’s had eleven factories and twelve depots in Britain, and two factories in Australia. Over 2,000 staff were employed. The vast majority of pubs and hotels across Britain were supplied by Smith’s Crisps. This was at a time when pubs did not serve food, and crisps were generally the only bar snack available.
The company was producing over ten million packets of crisps every week by 1956. Net profit after tax exceeded £1 million for the first time in 1960.
Smith’s acquired its major rival, Tudor Crisps, in 1960. Tudor was in the process of constructing a large new factory at Peterlee, County Durham, and Smith’s was keen to prevent a rival gaining control of the new site.
Smith’s was the only national brand at the time, but Tudor enjoyed distribution in Scotland, the North of England and the Midlands. Founded in Newcastle upon Tyne in the late 1940s, Tudor was the first company in Britain to use automated crisp manufacture, and had brand leadership in the North East of England. It had a labour force of 160. The Tudor acquisition helped Smith’s achieve a market share of 65% in 1961, of which Tudor accounted for three to five%.
Golden Wonder had been founded in 1946 by William Alexander, an Edinburgh baker. The company was acquired by Imperial Tobacco in 1960. Imperial built three large new factories and promoted the product heavily on television. A cellophane bag was introduced to keep crisps fresher for longer. The brand went nationwide in 1964. Golden Wonder’s market share overtook Smith’s by the end of 1965, and by 1966 they had a market share of 45% against Smith’s 34%.
Golden Wonder appealed to teenagers and children, but especially housewives. This meant that Golden Wonder was growing the market, rather than poaching Smith’s customers. As Smith’s did not monitor its competition, it did not become aware of a problem until 1966, when its sales fell slightly. Meanwhile, the grocery store market was growing whilst Smith’s pub snacks market declined.
In 1967 the Peterlee plant was expanded to 150,000 square feet to produce eight million packets of crisps a week. By this time it employed 500 people and was one of the most efficient crisp factories in Europe. There were also factories in Belgium, Holland, Ireland and France, as well as Australia. By this time the number of British factories had been reduced to seven.
In 1967 the company name was changed to Smiths Food Group, to reflect wider participation in the savoury snacks market, such as roasted peanuts. Company focus was switched from production to marketing.
The company’s first flavoured crisp, Salt ‘n’ Vinegar, was launched by Tudor in Spring 1967, and the Smith’s branded version was released two months later. It was the first time the now iconic British crisp flavour was introduced. However, the flavoured crisp had been pioneered by Tayto of Northern Ireland in the late 1950s.
1967 also saw Smith’s replace translucent paper with cellophane film bags which increased shelf life from a few days to over six weeks.
Smith’s had long claimed to manufacture a high quality product, but Golden Wonder achieved higher standards with the continuous batch process. Growing Golden Wonder cost Imperial Tobacco £10 million, mostly in factory costs, and due to a high marketing spend the business ran at a loss until 1965. Smith’s had presumed that the barrier costs of entry were too high for a competitor to match. They were wrong and it cost them. Largely due to these concerns, Smith’s was taken over by General Mills of America in 1967 for £15-16 million.
Smith’s introduced Quavers in 1968, and Monster Munch in 1977. These were part of the new “extruded snacks” category, which were made using potato flour. (Golden Wonder launched Wotsits in 1970).
Meanwhile between 1962 and 1969, Walkers quadrupled its sales. In 1971 Walker & Son of Leicester sold the company to Standard Brands of America.
In 1972 Golden Wonder had a market share of 39%, Smiths 32% and Walkers 12%. Still heavily regional, by 1974 Walkers claimed 50% of the Midlands crisp market. Walkers was a premium product with a heavy marketing spend that sold mainly to the wholesale trade.
Smith’s became loss-making under General Mills, who sold the company to Associated Biscuits for £16.4 million in 1978, explaining that a British concern would likely be better tuned in to the needs of the company.
Walkers and Smith’s were managed separately: Walkers was a high margin, high quality regional product, but it suffered from a narrow product range, poor trade relations and no innovation. Smith’s focused on low prices, but this merely resulted in low profits.
In 1988 Smith’s had sales of £145 million; Walkers had sales of £114 million. Walkers Crisps alone had a 32% market share. PepsiCo, who owned Doritos and Lay’s crisps in America, acquired Walkers and Smith’s for $1.35 billion in cash in 1989.
Walkers held 44% of the salted snacks market by 1995. Launched in Scotland in 1994, by 1996 Walkers had displaced Golden Wonder as the local market leader. Walkers acquired the Wotsits brand from the struggling Golden Wonder for £150 million in 2002, following disappointing sales of its own similar Cheetos product. Golden Wonder entered into administration in 2006, a victim of the popularity of Walkers.
The Walkers site in Leicester produces more than 11 million bags of crisps a day as of 2011.
But who can forget the little bag of salt?
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News and Views:
On this day 19th May 1960-1965.
On 19/05/1960 the number one single was Cathy's Clown - Everly Brothers and the number one album was South Pacific Soundtrack. The top rated TV show was Royal Variety Performance (ATV) and the box office smash was Psycho. A pound of today's money was worth £13.68 and Burnley were on the way to becoming the Season's Division 1 champions.
On 19/05/1961 the number one single was On the Rebound - Floyd Cramer and the number one album was GI Blues - Elvis Presley. The top rated TV show was Bootsie & Snudge (Granada) and the box office smash was One Hundred and One Dalmations. A pound of today's money was worth £13.25 and Tottenham Hotspur were on the way to becoming the Season's Division 1 champions.
On 19/05/1962 the number one single was Nut Rocker - B Bumble & the Stingers and the number one album was Blue Hawaii - Elvis Presley. The top rated TV show was Coronation Street (Granada) and the box office smash was Lawrence of Arabia. A pound of today's money was worth £12.89 and Ipswich Town were on the way to becoming the Season's Division 1 champions.
On 19/05/1963 the number one single was From Me To You - The Beatles and the number one album was Please, Please Me - The Beatles. The top rated TV show was Conservative Party Political Broadcast (all channels) and the box office smash was The Great Escape. A pound of today's money was worth £12.64 and Everton were on the way to becoming the Season's Division 1 champions.
On 19/05/1964 the number one single was Juliet - Four Pennies and the number one album was Rolling Stones - The Rolling Stones. The top rated TV show was Coronation Street (Granada) and the box office smash was Dr Strangelove. A pound of today's money was worth £12.24 and Liverpool were on the way to becoming the Season's Division 1 champions.
On 19/05/1965 the number one single was Where Are You Now (My Love) - Jackie Trent and the number one album was Freewheelin' Bob Dylan. The top rated TV show was Coronation Street (Granada) and the box office smash was The Sound of Music. A pound of today's money was worth £11.69 and Manchester United were on the way to becoming the Season's Division 1 champions.