Communicating with stakeholders: A Bernard Matthews case study

Background on Bernard Matthews and its business operations

Bernard Matthews is the largest turkey producer in the UK. The business has grown substantially since its relatively humble origins in 1950, when Bernard Matthews bought 20 turkey eggs and a second-hand incubator. 12 turkeys successfully hatched from this initial batch and before long, the young entrepreneur was able to give up his insurance job and concentrate full-time on rearing turkeys.

Today, Bernard Matthews rears over seven million turkeys every year. 13 million UK households buy a Bernard Matthews Farms branded product each year. Despite the size of its operations, the company remains close to its roots in East Anglia with its farms located across Norfolk, Suffolk and Lincolnshire. Bernard Matthews’ vision is ‘to make turkey the preferred choice of protein for every day and every occasion’.

Bernard Matthews operates in a competitive and fast-changing environment. Consumers are faced with a huge choice of foods to suit different lifestyles, diets and tastes. However, in recent years, buying patterns have changed as consumers have become more concerned about healthy eating, food safety and animal welfare. Fast-changing environment Chance events can have a significant impact on a food business. For example, Bernard Matthews’ problems date back a decade when Jamie Oliver’s high-profile campaign in 2005 to improve the quality of school meals singled out foods such as Bernard Matthews’ Turkey Twizzlers as being unhealthy. The product contained artificial colours, flavours and 
hydrogenated fats in its branded products and had high levels of saturated fats and salts. The reputation of the brand declined and consumer had misperceptions that turkey was just a processed food and therefore less healthy than the fresh product. Adding to the challenge, every day in the press and on TV, consumers were bombarded with often confusing or contradictory information about the health benefits or risks associated with different foods. Consumers may not have enough understanding or information to judge between conflicting messages. By not responding to these immediately or correcting with facts, consumers were confused and the company lost credibility with the press and the public.

In 2007, there was an outbreak of bird flu at a Bernard Matthews farm in Suffolk. At this time, the media also discovered that the company imported some of its turkey from abroad, contradictory to the claim that it was locally UK produced. The press published stories that this could have been directly related to the outbreak, a theory that was never proved.

Leadership and communication
Communications came low on the list of priorities. This meant that the resulting information 'vacuum' was soon filled with damaging and often 
inaccurate news reports. Initially, Bernard Matthews did not speak up and defend its product range, which offered affordable, tasty and convenient food for everyday working mums. This resulted in adverse press coverage and the company lost credibility with the media. When bird flu hit, relations with the media were at an all-time low. The company's immediate reaction to the crisis was to focus on eliminating the disease, which it did successfully, but a strategy to communicate with internal and external stakeholders was lacking. 

When the company realised the extent of the damage and finally opened up to the press it was too little, too late, as all trust had been lost. As a result, Bernard Matthews’ sales in the UK fell by 35% and the company went into a loss position.

The company came close to collapse in 2013, axing dozens of jobs, but Rutland Partners stepped in and bought a majority stake for £25m in 2013 to rescue the business. A bid to remind customers of its “bootiful” roots and win over mums across the country saw a rebrand in 2015. Rutland had hired advisers at Litmus, a firm specialised in debt financing, in May 2015 to try and attract outside investment but after three months of searching, Rutland backed a further £10m cash injection into the food business in August 2015 to help fund its restructuring amid falling sales. But the turnaround plan has had little effect.

To add to the mounting problems, the company has suffered from higher feed costs and an oversupply of costs. Group sales for the year to the end of June 2015 fell to £276m from £307m in the prior year, dragging operating losses to £2m compared to £1.8m the year before. However pre-tax losses after exceptional charges narrowed to £5.2m, compared to £9.9m the year earlier but its turnover has continued to drop and the company was put up for sale in June 2016. It has gone from a household name which dominated its market to a struggling firm unable to pay its bills. 

Question 1: Critique the case from a leadership, internal and external communication with stakeholders, and barriers to communication point of view.

Question 2: How would the above influence Product Development projects in the organisation?

Question 3: What should be done to remedy the situation?