September 22, 2018

Doughty Cakes – Rising again

Since its creation in 1982 Lincoln-based Doughty Cakes has seen its fair share of recessions and economic downturns but a strong family influence, coupled with a steely resilience, has enabled the company to clock up over 30 years of operation.

“My father, Peter Doughty, created the business to supply local village convenience stores before securing contracts to supply Lincolnshire Co-op, Coventry & East Mercia Co-op and Nottinghamshire-based Co-op stores back in 1990,” explains Mark Doughty, Managing Director. “Over the next ten years up to 2000 we were heavily involved in these three Co-op societies and as a consequence the business grew from two vans to four.

“In 1992 I joined the company to be followed in 1995 by my younger brother Carl. Originally the business was called Continental Cakes but the decision to change the name to Doughty Cakes was taken in the late 1990s. This was done for two main reasons: to better reflect the fact that we were now a family business and to highlight that we were importing fewer cakes from the Continent.”

Unfortunately Doughty Cakes was to suffer a significant blow in the early 2000s when the formation of the Co-operative Retail Trading Group (CRTG) saw all the individual societies being encouraged to purchase centrally. “At a stroke we lost 65 per cent of our business,” outlines Mr Doughty. “It was a major blow and had a huge impact on us as a company.”

Far from throwing in the towel, Doughty Cakes instead underwent major changes to provide a framework on which to move forward in what was a vastly different landscape. “My father Peter Doughty decided to step down as managing director with myself stepping into the role. In 2004 we then decided to take the business back to its roots and moved from our freehold warehouse into a council-rented unit. We also reduced the fleet to two vans again as we were supplying just 150 independent retailers at that point, although we still had contracts with Londis and a couple of other small symbol groups as well.

“The business was taken completely back to basics so we’d get a box of cakes, some marketing material and drive round knocking on shop doors seeing if they’d be willing to purchase our products and our service. As a family business this our main selling point: we offer a very good service that not many of our rivals can compete with.”

“One of our key selling points is our commitment to customer service and every one of the thousand retailers that we supply has my mobile phone number so they’re all able to contact me if they have an issue. Thankfully they never do but I feel it’s important to give them this level of assurance and me giving them my mobile number is almost a guarantee that we’ll deliver what we say we’ll deliver. Given that I’m not being called suggests that we’re making good our promises to our customers.”

Mark Doughty, Managing Director

The wisdom of the ‘back to basics’ approach showed that sometimes you have to go backwards to go forwards. This has been further underlined by the fact that Doughty Cakes now supplies just over 1,000 independent retailers across the east of England.

“Being located in Lincoln, we go as far north as York and as far south as Cambridge, says Mr Doughty. “We’ve now got seven vans and over ten years on from when our turnover dropped in 2004 to just under £300,000 we’re heading towards £1.3m-£1.4m this year.

“Despite the growth we’ve seen we remain a small business and only have 11 staff in total. Our focus now is on sustaining our service. We supply all our clients either weekly or fortnightly.

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“I must admit that the area of the industry that we operate in is under more threat than it has ever been within our 32 years of operation. These threats come from a multitude of sources: there’s online shopping, there’s the emergence of the likes of Aldi and Lidl and the subsequent reaction of the more established supermarkets as they’ve looked to move more aggressively into the convenience sector. This has seen a growing number of independent retailers either being bought out or just not being able to compete. However, what we are finding is that those stores that offer a strong personal service supported by well-maintained shops and well-trained staff are continuing to flourish and this is where we’ve recognised the growth to be. If you’re willing to offer a really good service and can still compete on price then this is proving to be a popular combination.

“One of our key selling points is our commitment to customer service and every one of the thousand retailers that we supply has my mobile phone number so they’re all able to contact me if they have an issue. Thankfully they never do but I feel it’s important to give them this level of assurance and me giving them my mobile number is almost a guarantee that we’ll deliver what we say we’ll deliver. Given that I’m not being called suggests that we’re making good our promises to our customers.”

As it’s not a manufacturer Doughty Cakes instead deals with 38 factories that are mostly located in the UK with some being based in mainland Europe. “We’ve built really strong relationships with these suppliers and of those 38 factories around ten have been with us since Day One. If we’re asked for a certain product that we don’t currently offer then we’ll speak with those of our suppliers that we feel could manufacture it for us.

“The emphasis from a NPD point of view is therefore very much on our supply chain, which allows us to get on with our main focus, namely developing our service. For example, we’re moving more stores over to weekly and have invested over £50,000 in handheld technology and are now operating from a 6,000 sq ft purpose-built depot. This is where our ‘product’ development lies.”

Even though it has done tremendously well to bounce back from adversity, there remain a number of challenges Doughty Cakes is having to contend with. “We’re competitive with the likes of Aldi and Lidl but we’ve lost three of our best stores to the multiples because they’re offering sums of money that they can’t refuse. Our biggest threat therefore is having our best customers being bought out by the larger multiples.”

With 2015 now getting into full swing, Doughty Cakes is looking forward to another strong 12 months having acquired one of its competitors’ businesses in September that provided it with another 60 retailers. “We’re going to keep investing in the business and continue moving forward by searching for new retailers that want to work with us. We’re still only supplying around 40 per cent of the potential customer base in our area so if we do lose retailers we’ll obviously fight back like we did when we lost the Co-op and get more business back.

“We’ve now set up our website to carry out online business so retailers can now log on and purchase our goods that can then be delivered by a courier or via one of our vans. The online service is showing slow growth but it’s something that we recognise that we now have to do and I would definitely say that within five years our online business will have increased from its present level, which is currently only a very small proportion of our overall business – around two per cent. I fully expect our online operation to grow ten per cent year-on-year going forward.

“Remaining a family business throughout even the darkest times has been crucial to our ability to roll with the punches. My father Peter still works within the business as Finance Director, whilst my two brothers, Carl (Operations Manager) and Martin (Sales Rep and Business Development Manager), are also heavily involved in the company. In addition my wife Juliet and my mother Shirley are also involved, so it’s the core of the family we have here. In terms of non-family members within the company we have Garry, who has been there and done it having been with us for 24 years, as well as Mark, Andy, Chris and Linda on our sales rep team. Our service is traditional van sales and this is the key to our operation as we carry the stock on our vehicles and by using the handheld technology it immediately shows the sales reps the record of sales. They can even go back a year to see what products were put into the stores at that time and assess how they performed. We also offer managed sale and return so if a product goes out of date we offer full credit to the retailer so it’s a totally no risk service. The minimum order is only £30 and because the stock is on the van we can deliver it straightaway. Our sales reps work extremely hard and they all leave home between 5am and 6am in the morning before getting back to the depot mid-afternoon to unload their vehicles to start again the next day. They work Monday to Friday so we ensure they get the weekend off because they certainly need it.

“We’ve always gradually grown the business and that’s what we’ll continue to do. We try not to borrow money, preferring to instead re-invest the profits into the business because there’s no intention of selling up. Our ethos moving forward is to embrace the challenges that we face and give 100 per cent every single day that we work. There’s really no more you can ask for than that.”

It is this total commitment that has seen Doughty Cakes endure even the toughest times and enabled the business to rise again so strongly within the marketplace.

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