Sarah Dean bought Noble Foods in 2019, and has recently taken on the role of chair. The egg business was founded by her great grandfather in 1920. In her first ever interview, she tells PB why she felt compelled to take the business back into family hands.
Sarah Dean grew up surrounded by eggs. As a girl, her father Peter Dean and his cousins worked within the business founded by her great-grandfather – William Dean – and she spent her weekends playing in the packing centre with her brother.
But despite this, she never intended to lead the business that would go on in the early 2000s to become Noble Foods, the UK’s biggest egg business. “There was never any expectation that I would go into it at all,” she says. “I was never any good at school, and my dad never talked about work at home.”
In fact, she trained as a Norland nanny, while her late brother became a mechanic. But things don’t always turn out as expected. She did end up getting drawn back into working for the business in the 1990s, and in 2019 the opportunity came up to buy back the business from the lead shareholder, Michael Kent, who was by this point looking for an exit, having gone into partnership more than a decade earlier with Peter Dean.
After lengthy negotiations, Sarah Dean bought the business, bringing Noble Foods back into family hands. Three years on and she has just taken on the role of chair. And she has a clear vision: to make the Noble Foods name synonymous with good practice and doing the right thing by producers.
That’s no easy task in the current economic climate. Many British egg producers have been making significant losses, due to spiralling inflation on poultry feed and energy prices, among other costs, not being adequately passed on through the supply chain. Indeed, the British Free Range Producers Association (BFREPA) said in November that up to a third of producers were either scaling back production or leaving the industry altogether due to poor returns. In recent weeks this has fed through to shortages on some supermarket shelves and increased wholesale prices.
This was one of the reasons that in October, Noble Foods announced a 6p per dozen increase for all its organic and free-range producers. It was something Noble’s agricultural manager, Graham Atkinson, argued strongly for, says Dean. “It was hard, but we listened to Graham,” she says. “They would have liked more, and clearly it was not enough, but these issues of cost pressure require the entire supply chain to work together to find solutions, identify underlying challenges and ensure availability returns to normal levels.”
Since the interview, Noble Foods has once again upped the amount paid to producers, by a further 9p per dozen, as the shortage of egg on supermarket shelves has brought the issue of producers’ cost increases into the public consciousness.
Noble is in a tight spot itself though, as margins for packers as well as producers have been extremely tight. The company recorded an annual loss of £30.3 million in the year to October 1 2021. Dean qualifies this by noting it reflected the shell egg business only, rather than other divisions such as milling, poultry and added value, and that it reflected exceptional, forecasted costs, in addition to strategic decisions the company made to streamline the business and property portfolio. In addition, the 2021 report also reflects reduced consumer demand post-pandemic and the financial results where therefore expected.
Nevertheless, the tough environment didn’t make the decision to pay producers more particularly straightforward, admits Dean. Although their hand was in one sense forced. “You have producers talking about resting sheds and not replenishing. If you are sitting there with a fully depreciated shed and are looking at maybe
breaking even or maybe losing money, why would you bother to put birds in? The inflation issue can’t be ignored, so we are trying to provide stability for the long term.”
“We need the egg,” she says. “We need producers who are going to invest in the future, and we need producers who will actually produce and sell the eggs to us and if they won’t do that, we haven’t got a business. We can’t operate without them and, likewise, retailers must appreciate that suppliers need an adequate return.”
The need to streamline the business in the face of vicious inflationary pressures is one of the reasons the business decided recently to close its packing plant at Standlake, Oxfordshire, with the loss of 128 jobs. “It was not a painless decision,” says Dean. “Our operations [at Standlake] began to scale back, as the industry moves away from colony egg, plus the turbulence of the current market. We had to rationalise and unfortunately make very difficult and significant changes.”
While it is still the UK’s biggest egg firm, like many companies it is smaller than it once was. At its peak, Noble Foods supplied 40% of the egg market; now that figure is around 20%, says Dean. As well as increased costs, Noble has in recent years lost a significant amount of retail business, while prioritising its key customers.
Closing the plant was a natural consequence. “It’s a big site, and we just couldn’t afford it,” says Dean. But she insists the business has done everything to support the staff it let go. “Everybody we had to put into consultation we fully supported, with getting CVs up to date, interviewing training, and by the time we closed the night shift every single person had a job to go to.”
She adds that the business invested in and expanded its North Scarle packing plant with a big modernisation
programme during 2018 and 2019, plus investment into the Thornton packing centre, with new equipment including a tray washer. After Standlake, no more closures or cutbacks are planned, she says.
Dean’s path to becoming owner and chair has not been straightforward, and the story goes back several decades. In 1991, Peter Dean led a management buyout of the firm from Dalgety plc, which had bought the business in the 1960s. At this point, Sarah’s parents’ friends, John and Cathy Campbell of Glenrath Farms said to Sarah that she ought to consider joining the egg industry. She signed up for an HND at Harper Adams, with fairly low expectations. “At school I hadn’t applied myself,” she says. But to her surprise, she enjoyed it.
Her first job in the industry was at Buxted Foods in York. Then, inspired to learn more, she went back to Harper to convert her qualifications into a degree, gaining first class honours in agrifood marketing and business studies.
She joined the family business and spent several months working in each of the areas of the business including the packing centres, milling, and finance. In 1999, she started working on the Tesco account, and became account manager.
She acknowledges being the boss’s daughter was a huge benefit. “When Tesco came to me with anything, I could go anywhere within the business. When I was doing my forecasting, I chatted to the operations team and wasn’t afraid to have those conversations and walk into offices. I think that helped the way we operated with Tesco. After a few years, the business was supplying 80% of Tesco’s volume. “We put in brands like Big and Fresh, Down to Earth (an organic brand), introduced egg shippers for bulk retail, and launched Ready Egg liquid egg. We were always innovative.”
In the 2000s, Dean’s three children were born in quick succession and the idea of taking on a more prominent role fell back on her list of priorities. At this stage, Peter Dean was ready to start thinking about retirement, and that’s when the deal with Michael Kent was done. Noble Foods was born in 2006 as a result of the deal, which also enabled Peter Dean to take a sum out of the business and secure his family’s financial future. Kent became the lead shareholder and chief executive; Peter Dean became chairman and stepped away from the
day-to-day running of the business.
But by 2019, things had changed. Kent had grown the business and launched happy egg into the USA and was considering selling up. An IPO was considered and rejected as a viable option. The shareholders decided the business going forward would be better in the hands of one family. Sarah’s children were by this point teenagers, and after securing a sizeable bank loan, she managed to agree terms with Michael Kent. After the deal was done, Noble Foods was wholly owned by the Dean family.
“I’ll try not to get emotional,” she says, when asked why she wanted to take Noble Foods back into family hands. Clearly, for her, it was personal. “I recognised the Dean name wasn’t as valued in the industry as it once was.” This, she says, is the main motivation; to make the Dean name highly regarded among egg producers, and to make sure the business is being run as ethically as possible.
“I knew when I bought it back, and my executive team know this, I ran the risk of losing the whole business because we were so highly leveraged. I knew I could lose it all, but I wanted to try, and I still feel like that.
“I like our producers and I value them hugely,” she says. “When they sign a contract with us, they are trusting us with their livelihoods, and you can’t take that responsibility lightly. My dad had great relationships with our producers. I want to do the right thing by them, and ensure they have stability. We have already demonstrated this by our feed scheme deal, which provides a set margin for a longer period of time.”
She appointed Chris Bull as interim chair and part of his role was to prepare Sarah to be chair. She says she wants to bring family – and family values – more to the fore in how people see Noble Foods. But it’s a steep learning curve, she admits. “I’ve still had no executive experience. I recruit experienced people with the right values. I’ve got a great team and they all believe in what we’re trying to achieve for the future.”
One of her goals is for Noble Foods to become a B Corp, a certification scheme that audits companies on their ability to serve shareholders and others including employees, the environment and other stakeholders.
Dean has spent the past three years assembling a team that believes in her vision. As well as chief executive Duncan Everett, formerly of Kerry Foods, she recently appointed Steve Murrells, the former chief executive of the Co-operative, as a non-exec director.
“Everyone kept saying to me when I was buying it, what is the strategy? What are you going to do? And I said, ‘I don’t know, I just want to own the business because it’s the right thing to do’. I needed a CEO that was aligned with my values and that became apparent quite quickly.
“I could have this vision and these values but without an executive that believed in that themselves I couldn’t do a thing. So, I recruited Duncan and I remember saying about two weeks after he started, the day he walked into the business was the day I felt like I bought it because he is such a genuine person, and he wants to do the right thing for the success of the business long term.”
After losing business to competitors over the past few years, Dean says Noble Foods is focused on rebuilding. But size is not important to her, she says. She wants to make sure producers consider the business the best place to sell their eggs.
“I don’t really care about being the biggest. My dad used to have a sign in reception that read ‘I never wanted to be the biggest, I just wanted to be the best’.”
And of course, Noble Foods has other strands to the business that require attention. Posh puddings brand Gu was sold in 2021 to a private equity firm, which allowed Dean to pay back most of the bank debt from the deal with Kent and gave Noble the financial capacity for growth in the future. Noble Foods runs the third biggest milling business in the UK and in March 2022, acquired Hi Peak, their sixth mill. It also has a poultry processing site for spent hens. In fact, she says, “the eggs actually are the least profitable part of our business”. For this reason, it is working on developing new added value egg-based products with a new development chef, who joined the business this autumn. Being sustainable, making money, and doing the right thing, are a tricky juggling act to get right, especially with raging inflationary pressures and the threat of recession looming. It’s one Dean does not take lightly. The problem, she says, is “trying to work out how the entire industry can make money”, while still doing good work and supporting other causes.
“We have a massive investment in our people development programme that we’ve introduced since I bought the business; we have the people partnership, which is a profit-sharing scheme with all our employees and we are proud of that, and we work with charities including City Harvest, we feed 1,700 children every day in Malawi, and we are working with Magic Breakfast as our national charity, alongside all the local community work we do around each site.
“One of the biggest challenges is to get more people eating eggs on more occasions in a way that we can add value and invest back into the industry. It’s about working out how we make ourselves properly sustainable and how we make money doing it.”
This is the work that Sarah is spending time on now, and she hopes her ownership and stewardship in the role of chair will enable her to take a long-term perspective while looking to fulfil the company purpose of ‘to better nourish people, animals and planet’.