Rowntree Mackintosh Confectionery
Rowntree Mackintosh Confectionery was a British confectionery company formed by the merger of Rowntree's and John Mackintosh Co.. The company was famous for making well-known brands of chocolate, including Kit Kat, Aero and Quality Street. The company was purchased by Nestlé in 1988, which rebranded many products under its own brand.
Rowntree Mackintosh Confectionery also owned John Mackintosh Co.'s former headquarters and factory. The Halifax-based factory is still used today, located next to Halifax railway station for the production of Quality Street and more. Rowntree's former factory and headquarters were in York. Nestle has invested more than £200 million in the Rowntree's business since 1988, making the York site one of the world's largest confectionery factories. Nestle's global research centre for confectionery is also based here, and recently doubled in size following a £7 million investment.
History
Victorian era
In 1862, Rowntree's was founded at Castlegate, York by Henry Isaac Rowntree, as the company manager bought out the Tuke family. In 1864 Rowntree acquired an old iron foundry at Tanners Moat for £1,000, and moved production there. In 1869 the factory was staffed by 12 men. By 1869 Rowntree was in financial difficulties and his brother, Joseph Rowntree, joined him in full partnership, and H.I. Rowntree & Co was formally established. In 1881, Rowntree introduced Fruit Pastilles, competing against French imports of the time, and the product proved to be a great success, accounting for about 25 percent of the company's tonnage by 1887. This success allowed the company to invest in a Van Houten press, which enabled it to produce chocolate with the cocoa butter removed, in order to compete with Cadbury's successful Cocoa Essence. In the 1890s, Rowntree transformed from a small family business into a large-scale manufacturer, as sales more than quadrupled due to an increased demand among the public for confectionery. Six years after Rowntree's formation in 1868 John Mackintosh Co. was formed.In 1889, Seebohm Rowntree established a small research and testing laboratory for analysing ingredients and rival company products.
In 1890, in order to cater for this increased demand, Rowntree acquired a 20-acre site at Haxby Road on the outskirts of York. The Tanners Moat site had become too small for Rowntree's needs, and the company had noted the success of Cadbury's purpose-built factory in Bournville.
In 1893, the company introduced Rowntree's Fruit Gums.
By 1897, the unlimited partnership needed external funding for its expansion, and became a public limited liability company called Rowntree & Co.
Robert Fitzgerald has accused the company of being slow in new product development and marketing compared to its major competitor of the period, Cadbury. Fitzgerald suggests that Joseph Rowntree imitated the successes of competitors, and that under his leadership, the company did not introduce any innovations of its own.
Around 1898, the company acquired its own cocoa plantations in the West Indies.
In 1899, Rowntree introduced its first milk chocolate block. However, the company failed to match the quality of Swiss competitors such as Lindt. In 1904 Mackintosh established his first overseas factory at Asbury Park, New Jersey which, however, soon failed. Undeterred, a factory was opened in 1906 at Krefeld, near Düsseldorf. By 1914, operations had been established in Australia and Canada, and John Mackintosh Ltd employed some 1,000 people.
1900 to 1945
Rowntree had struggled to make a milk chocolate product of comparable quality or value to Cadbury's Dairy Milk. Joseph Rowntree even described the growing market for milk chocolate as a fad. Rowntree's poor performance in the category became a major problem from 1914 onwards, as British public preference continued to move towards milk chocolate, and away from the more bitter cocoa essence products. Rowntree's two major rivals, Cadbury and Fry, merged in 1918, and although Rowntree was invited to partake in the merger, the company declined to do so. Meanwhile, the Rowntree board was torn as to whether it should become a low turnover, high quality product company or a mass producer of cheaper lines. Seebohm Rowntree inherited a struggling company when he succeeded his father as chairman in 1923. By 1930, as a result of all its problems Rowntree was approaching bankruptcy.In 1926, Cowan's of Toronto, Canada, was acquired for $1 million. From 1931 Rowntree of Canada began to manufacture Mackintosh toffees under license.
In 1927, the company began to market its fruit gums, and its pastilles from 1928, in the now familiar tube packaging.
George Harris was appointed marketing manager for chocolate bars in January 1931. Harris had learned the latest marketing techniques whilst in America. According to academic Robert Fitzgerald, "It was Harris's drive and insight which inspired his firm's renaissance in the 1930s". In 1932, Rowntree appointed a new advertising agency, the London branch of J. Walter Thompson. Thompson undertook extensive market research in order to discover what consumers wanted. As a result of this research, the Black Magic assorted chocolate box was launched in 1934. In January 1935, Rowntree decided to abandon its attempt to compete with the Cadbury Dairy Milk. In May 1935, Rowntree launched the Aero, an aerated milk chocolate. The Chocolate Crisp wafer and chocolate bar was also launched in 1935. In 1937, the Dairy Box of assorted chocolates was launched, using the market research that had been gathered for Black Magic. Chocolate beans were first sold loose in 1938, but were later packaged in a cardboard tube and branded as Smarties. Polo, the distinctive mints with a hole in the centre, were developed in 1939, but their planned introduction was delayed by the onset of war. Harris was made company chairman in 1941.
1945 to 1988
Rowntree entered the continental Europe market in the 1960s, establishing production facilities in Hamburg, Dijon, Elst and Noisiel.After Eights were launched in 1962.
In 1969, the Rowntree board rejected a £37 million takeover bid from General Foods.
In 1969, Rowntree entered into a long-term agreement with Hershey whereby Hershey would produce Rowntree products under license in the US. Rowntree merged with John Mackintosh and Co in 1969, to become Rowntree Mackintosh. Mackintosh produced Rolo, Munchies, Caramac and Quality Street.
The Yorkie and Lion chocolate bars were introduced in 1976.
In 1978 the Hershey contract was renegotiated, giving Hershey the rights to the Kit Kat and Rolo brands in the US in perpetuity.
Kenneth Dixon was appointed as chairman and chief executive in 1981. Between 1981 and 1987, Rowntree invested nearly £400 million in upgrading its manufacturing facilities and developing high volume, product dedicated equipment for several of the company's leading global brands, including Kit Kat, After Eights and Smarties.
Between 1983 and 1987, Rowntree spent nearly £400 million on acquisitions, including Tom's Foods for £138 million, Laura Secord Chocolates for £19 million, Hot Sam Pretzels for £14 million, the Sunmark confectionery business in the US for £156 million and Gale's honey for £11 million.
Between 1982 and 1987, the number of UK staff was reduced from 19,700 to 15,600.
In 1987 Rowntree operated 25 factories in nine countries and employed 33,000 people, including close to 16,000 in its eight UK operations. Group turnover was £1.4 billion, with the UK and Ireland accounting for 40 percent of the total.