The history of Paynes - Sample Essay
George Payne and company first became a limited company on the 17th of April 1896. Some of the reasons it became a limited liability company were that with tea and coffee being the principal focus of the business, they could only sell to customers on the premises of the City of London. I think that because they are a private limited company, they can enjoy the benefit of limited liability, which means individuals contributing to capital have responsibility for their own debts, which means most of the capital, is available through the sales of the shares.
The company started to grow steadily through the production of cocoa in 1905 they expanded into new products with the production of cocoa, by 1910 they went even further and started manufacturing chocolate products very quickly made a name for themselves by doing this. The development over the years meant that Paynes kept growing and growing and became famous for their high quality goods. In June 1998, a much larger company Northern Foods bought out Paynes.
Paynes have six different products including different kinds of teas, like lemon and other flavours, mints, various flavours of Poppets like raison, mint, toffee, fruit cream and peanut. Paynes also do a range of nut products like Just Brazils or Just Almonds, these are covered in chocolate and sold in expensive looking boxes, another popular brand is the popcorn, and this product comes in an assortment of flavours such as raspberry and caramel. The last one is a similar kind of thing to Poppets but they are not covered in chocolate but are just called Fruitettes.
This gives some indication of the size of Paynes as a company because for all the different products they have they will probably need different expertise in the area of making that product, for example someone who makes the popcorn might not be skilled in making the Poppets, this means the more employees that are on board it means the company itself must be quite large because it has to pay the employees a wage and a small company wouldn’t be able to pay a decent wage to a lot of employees.
Payne’s production was originally based in Queen Elizabeth Street but it wasn’t until they moved to Beddington Estate in Croyden, London the company started to make real progress. The legal structure of Paynes before being bought by Northern Foods was a private limited company. This restricted Paynes in a number of ways including that it took a lot more time in setting up the business so they could of started years before they actually did, they also could have saved a lot money.
The company was limited to the type of business described in its professional documents, professional help was probably needed to start up the business, which also could have cost more money. It could also mean that there is a separation of ownership, which means the owner, might not make all the decisions. In 1998, Paynes became a subsidiary of Northern Foods. Northern Foods is a plc (public limited company). Paynes may have decided to sell to Northern Foods because Paynes had started to struggle financially and being bought was the only way to assure they wouldn’t go bankrupt.
There could have been more reasons, like Paynes were finding it difficult to compete with rival manufactures of similar products and couldn’t keep up with lower costs and promotion skills. Northern Foods is one of the largest grocery companies in Britain, with an annual turnover of more than i?? 1 billion. They have a strong record of successfully buying companies and growing and developing them, this includes Paynes.
Paynes developed their products from cocoa since 1905 to include products such as Poppets, teas, and mints, nuts and other kind of sweet products like Fruitettes. The range of products could probably appeal to just about anybody due to their vast range of goods. I think that the different kind of product attracts a different market, such as nuts, I think that nuts would appeal more to the older people buying this range of goods, therefore the growth of this product would take longer but wouldn’t be mature for very long and would decline quite fast.
Northern Foods have five main customers and are all big national companies; these are Marks and Spencer, Safeway, Tesco, Sainsburys and Asda. Northern Foods sell their goods to these supermarkets for probably a good profit. The Poppets product developed over the years and can now be found in almost any supermarket or local newsagent at the standard cost of 31p.