Alan Ridealgh: “Be true to yourself and people will follow”

Alan Ridealgh is MD of Muntons, a company which produces around 180,000 tonnes of malt each year, enough to fill over ninety Olympic sized swimming pools, using barley mainly grown within a fifty mile radius of their maltings at Stowmarket in Suffolk.

The malt produced is used to supply the brewing and distilling industries and to make a wide range of ingredients such as malt extract, malt flour and flakes and homebrew kits.

They supply these products to over sixty countries worldwide through a network of agents and distributors and through their own US company and Asian office.

Muntons ingredients are used extensively in products that we consume every day. Malt is used in beer and whiskey, but less obviously in vinegar, bread, breakfast cereals, confectionery and convenience meals to name a few. Muntons supply customers such as Carlsberg, Weetabix and Wilkinson’s. Ever wondered where the malt in Malteasers comes from?

Thank you taking part in this project and helping to inspire business owners everywhere. Having met you a few times, I have been struck by how compelling you are as a leader. I come away with the sense that you have a certain air that positively influences people to want to follow you hence I was keen to talk further and understand that more.

Before that, what are the highlights of your story to this point?

Well, I started with the business at our Yorkshire Maltings in 1980 which is a staggering 35 years ago. With a degree in Zoology at the University of Newcastle I had a couple of years working for the Ministry of Agriculture as a Scientific Officer and started work with Muntons. I spent two years as a trainee grain buyer – became a trainee farm manager during that period too, as the business owned quite a large animal farm – and then I moved to Stowmarket as a grain buyer. I stayed at Stowmarket for five years and then moved back to Bridlington, again on the grain side, but during that period we became quite aggressive in buying other businesses. I was involved in acquiring and then running a number of grain businesses: one in Yorkshire, one in Suffolk, one in Scotland, a seed business in Suffolk (cereal seeds these were), a pet food business, and ran the haulage business and several other bits and pieces.

How many of these were you running at a time?

I think I was MD of five or six companies during that period, as well as running the grain operation. I then moved to Stowmarket again and several years after that I amalgamated those into one operation which we call Muntons Grain which made it much more manageable. I happily ran that until about 2000, when we reviewed what we wanted to do as a business and, really, we decided we would focus on a core competency of making stuff and selling that to customers as an ingredient, whether it was for brewing, distilling or into the food industry.

The other parts of the business were a distraction, but some of them were very valuable to us, so over a little space of time it was a question of saying ‘What do we want to keep? What do we not want to keep?’ and from there we essentially closed down or sold (generally we sold) all of those businesses and slimmed down to just doing the core job, but we did retain some of the important things to us from those businesses which essentially were the reasons that we got involved with them in the first place.

You really played to the core strengths of the business.

Yes, and really we’ve kept with that since then. And I ended up running the malt and grain business and then in 2005 the existing MD here became unwell and I was made deputy MD. In 2006 the job was advertised through head hunters. I applied for it and got the job. It wasn’t an automatic selection and it wasn’t a job that I ever wanted to do. I was more than happy doing what I was doing with the grain background. I had that love of agriculture and grain so I was really at a point where I was more than happy with that, but when the job became available and I wasn’t automatically put into the pot I was slightly annoyed, but in hindsight it was absolutely the right decision.

So, that really gave me the incentive to say ‘I’d like to do that job, but why would I like to do that job?’ Well, the reason I wanted to do the job and the conclusion I came to was that I wanted to preserve the things that I felt were important about Muntons, that somebody else coming in from outside might accidently remove or destroy. That was the incentive I really needed to try and get that job and I don’t think that I have ever prepared as much in my life as I did for the series of interviews with the head hunters and eventually with the shareholders. The process made me passionate about wanting to do the job.

It’s interesting, isn’t it? As you say, you didn’t think that it was something that you wanted to do, but that passion for maintaining the values of the business that were so important to you really contributed to your desire for the role.

Yes, absolutely, and I suppose it was because I’d been here quite a long time at that point and I really liked the people around me meant I didn’t really want to lose that.

After three interviews the hard work paid off and I got the job. For me, it was good that I wasn’t automatically promoted. I had to go through the selection process the same as anybody else, so there was no ‘He’s only got the job because he’s worked here for 20 years’ from other staff members.

It sounds hard earned.

Yes, but I think it was right.

And it made you want that job.

Yes, and it’s something that I’ve used with a couple of my colleagues when vacancies have arisen and they’ve not thanked me at the time, but they certainly have afterwards when they’ve been promoted.

When I got the job we were pretty much at a low as a business although we’d been investing quite heavily in plant and machinery. I therefore had the benefit of having some good equipment and products available to me and quite quickly was able to tailor those to specific customers which set us on quite a strong upward trend.

It’s great to see how quickly the company has expanded.

Yes, we certainly did grow and expand quickly. We decided to concentrate on core activities back in 2000 at a time when we were under pressure from the commodity markets. The grain markets were also extremely volatile during the same period and that had a huge effect on our business in terms of cash, particularly when you’re spending twice as much on raw materials in one year as you did in the previous year. It’s tough. There were certain customers out there in our brewing areas that didn’t value us and they were possibly, in total, half of our malting trade.

So, we decided that we weren’t going to sell to them anymore and we would find another way of finding customers that valued us. As a result, our profitability dipped one year because that was the year of transition, but we were always confident that we’d come through it quite strongly and we came through it the following year as we successfully made that transition with a near record profit, followed by a record profit.

We had completely changed our outlook. Instead of supplying to the commodity customers we were supplying more bespoke products at higher margin and that’s worked for us ever since then. What’s been really nice about it is that we also found some of the customers we thought we were going to walk away wouldn’t let us go.

That was a surprise, a very pleasant surprise because we’d always based our business on quality and service. Being a smaller producer we needed to be better than everybody else and then to find that two very big global brewers would not let us get away from them, by that I mean they paid us higher margin. In fact with one of them now we’re almost back to where we were before we took this route and are nearly their biggest European supplier.

They valued your values.

Yes, and that was a little bit of a surprise to us. I think because there were other alternatives, they could’ve decided to go to other people, but they didn’t and part of that was our sustainability, which was the bigger picture, and our efforts and passion about sustainability. Sustainability was part of their growth strategy as well and nobody else was doing it in our industry.

In those times there must’ve been the worry of ‘Am I doing the right thing and is this going to work?’ It’s very courageous.

Yes, people have said it’s very brave and I always read brave as meaning stupid because sometimes it is. It’s very easy to continue doing the same thing, but something’s always stuck in my mind; if you continue doing the same thing in the same way you’ll end up with the same result. We had to change the game, we had to do something. It just was not sustainable in any way whatsoever.

And of course we briefed the shareholders, banks, staff, customers – everybody – and we kept them updated as we progressed. We advised our shareholders and banks that it could be bumpy for a year because unfortunately, at that time, our financial calendar and company calendar year didn’t coincide, so the danger was that it went over two financial years. So, we set off by saying that at the financial year (the end of September) we will make a change, but we may not have got it completed until the end of the calendar year and that’s exactly what happened in the end which meant that we dipped very slightly into the red in that year, but bounced back immediately from the start of the calendar year.

It wasn’t easy because when you actually do go into the red people, they say ‘but you’ve just lost money,’ but this was explained to all concerned and that we expected to bounce back quite strongly. The banks were also questioning why we had lost money, to which we reminded them this was anticipated. The banks were also going through difficult periods at that time as well, but the good thing that came out of the situation was that they actually sat down with us and said ‘Is there a better way of doing this with you?’ Eventually we came to a fantastic deal with our banks for funding the business going forward, initially with RBS and Lloyds and now just with RBS. This takes away all of the stress and worry we were having about the commodity markets using asset-based lending. Our stock is the thing that varies in price so it just took it all out of the way. We work very closely with our banks and have an extremely good and strong relationship with them, and they designed this product specifically for us which is quite flattering really.

It’s interesting that we’re going right back where we started our conversation, with openness and trust, shared values and collaboration.

Yes, and I think getting that across as well builds quite a lot of confidence between different people. It’s interesting that values and vision come together really, don’t they? Organisations do surveys to see how you get your message through to staff and we took part in one of these. One of the questions in there was “Do you understand and share the companies values and vision?” and we got something like 86% that said absolutely, some said not sure and there were a couple of no’s, but of course you’ve got new people coming in all the time. The funny thing is though, we’d never ever communicated our values and visions.

It was through actions?

Yes.

And living them.

Yes, and that made me think let’s try and make sure that we do articulate what our values and visions are, so that those new people coming through and those that may have forgotten them all have the same awareness. Now that the business has spread worldwide, we need to make sure that our values and vision are consistent in each area of the world that we operate in. This is a big challenge currently as we’re building a new factory in Thailand.

Congratulations!

Yes, it’s quite exciting really.

During your journey, have you ever been frustrated by a repeating pattern, an obstacle that kept coming up? Did something you learned about yourself help you overcome that obstacle?

I’ll refer back to what I said earlier. If you keep doing something in the same way you’ll only get the same result. We had to say to ourselves ‘How do we break those loops?’ There was nowhere in our industry where those loops were being broken so it wasn’t as if there was something there to copy. I’m quite happy to copy things if they’re successful, but there was nothing there.

At the same time, on sustainability there was nothing there from anybody else so we really had to talk through as an executive team how we viewed this. Did we think we could do these things? We were certain that we could lead on sustainability because we are passionate about it. We also believe that we have a responsibility in terms of sustainability to the community and to the environment, but also to our shareholders. In other words, we’ve got to be financially viable going forward as well.

It works. It’s a way of thinking. It doesn’t cost us any money, it actually makes us money and it’s absolutely brilliant. I cannot understand why businesses don’t grasp it with both hands rather than seeing it as an obstacle. I’ve heard somebody describe it as a “paying lip service to” just this week. You actually lead with it and in return it delivers for you in lots and lots of ways.

And that was shared vision and values.

It was a review of it. We had to carry our shareholders with us, who were very sceptical about it, but we’ve moved it on considerably now. It was similar with the decision we made to stop doing business in the same way and breaking the loop.

Among those personal light bulb moments, you mentioned not being able to continue doing business in the same way and being very passionate about that. Is there anything else, perhaps about yourself, that you learnt in that journey too?

During that journey there were some difficulties. Not everybody came with us and we did have some changes within the business, at director level as well, but there was a huge amount of support and that really surprised me. You always hope you’ve got support, but there are times at which it’s really there and it’s charitable. People are lining up with you and that was really needed to get us through quite a sticky period that we went through two or three years ago and that support has continued.

That was the light bulb moment to me, that if we got that support we could do anything. There was another light bulb moment which came more recently a couple of years ago, when we’d gone through some of these changes with the commodity customers and we were working with our bespoke customers. We realised just how important we were to these customers, not in a moment getting complacent or cocky with it, but ‘we have a place here’ and that gave us a lot of confidence to say we can get a margin out of this business and that has come, that has worked.

What do you believe it is about you that really has gained that level of trust and support?

Passion, I think. Commitment to the business, and honesty and openness. I can’t lie because I can never remember if I lie so there’s no point in doing it. People may at times think I’m a bit blunt, but hopefully not in an unpleasant way. I just can’t do the untruth bit so I tend to share with everybody.

That openness and authenticity, being yourself and recognising that you bring people with you, but not getting cocky about it or using it other than for common good, are fabulous traits.

If you were hopping on a plane and had 30 seconds, what one more bit of advice would you give?

Be yourself. It would just be to be yourself.

Can I add a suggestion?

Yes.

And be true to yourself.

Yes, oh absolutely. I think I’ve written down here, value your values.

Thank you very much for your time. I’m sure there are going to be a lot of people that will be inspired by reading about your journey.

My pleasure. I’ve really enjoyed talking to you, Angela.

In brief

Play to the core strengths of your business. Carry out a review to ensure that you are focusing on the right areas. Dispose of any areas that are distracting or not profitable. If they have any value, sell them.

Find customers that value you as a business. This will enable you to supply bespoke products at a higher margin. You may be surprised to find that some customers who you expected to leave behind may not be willing to let you go!

If you do the same thing the same way, you’ll get the same result. Think of innovative ways to break the loop and change the game and you will see results. Be passionate about sustainability. If you lead with sustainability it will, in turn, deliver for you in lots and lots of ways. Can you afford not to?

Work closely with your banks and, if you can, build up effective relationships with them. This will help relieve the stresses and worries of the everyday business world and they could even design specialist products tailored to your business needs.

Values and vision really come together and build a lot of confidence between different people. Ensure that they are known through the organisation.

If you have the right support you can do anything you want to.

Realise how important you are to your customers, but don’t get complacent. Know your place within the market and that will grow your confidence as an organisation.

Lastly, always remember to be yourself and true to your values – it will take you a long way!

Muntons Ingredients manufacture a comprehensive range of grain malts and further process these into a range of malted ingredients for food producers, bakers and confectioners to add flavour, colour and texture to their products.

Our malted products are endless, and we’re so proud of them that we’ve produced our own Consumer Recipe Booklet.