ROGER McKechnie launched savoury snacks firm Phileas Fogg in Consett during the height of the recession of the early 80s, 12 years later he sold the business to United Biscuits for £24m securing a tidy £7m for himself in shares in the process. He launched his next venture Tanfield Foods in 2004 and expects an even bigger success this time around.
The growth of this company, also based in Consett, has been impressive despite the latest and far bigger economic slump and sales are expected to more than double in the next two years to £30m.
He says: “I wouldn’t think about the recession. Clearly food is recession-proof but you have to have your own plan. You have to know the business you are talking about.
“As a start-up you will have a new market to go at and this gives you a good chance if you have the right skills and backing to make it work.”
McKechnie, 69, decided to set up Phileas Fogg after employer Smiths Crisps informed him he had to relocate to London from the North East.
He didn’t fancy uprooting his family, wife Eileen and six children from the Tyne Valley and in 1982 McKechnie and colleague Keith Gill launched Derwent Valley Foods on the Consett Number One Industrial Estate.
“Consett was a great place to start up a business in 1982. The steelworks was closing and the authorities were desperate for new people to come here. They were even advertising on Metro Radio for people with ideas, any kind of ideas, to come to the town,” he says.
“We drew up our business plan on the back of a fag packet and took it to the people who were running the regeneration arm of British Steel and they went for it.”
Middlesbrough-born McKechnie describes himself as the world’s “worst administrator” but as an ideas man his development of the Phileas Fogg upmarket snacks concept was ground-breaking.
The range of Tortilla Chips and crutons and the cute marketing based on the notion of Consett having an international airport on Medomsley Road, helped the rapid rise of a new product in a market which at the time was dominated by bags of crisps and salted nuts.
McKechnie and Gill ploughed in some of their own money, got support from the Newcastle office of venture capital company 3i and grants from the local and national authorities.
So when McKechnie reached the point where it was time to find a venue for his new venture Tanfield Foods he returned to Consett.
“Derwentside was perfect for us. It’s dead easy to get here from the Tyne Valley and the environment for grants was as good as it was back in the 1980s.
“We also had a lot of residual goodwill from the Derwent Valley Foods’ days and it was not difficult to get people to come and work for us.”
After selling Derwent Valley Foods McKechnie spent time with his family and while sailing on Lake Windermere they spied a late 18th Century lodge.
“It was a bit of a wreck when we bought it. We bought it originally with a view to living in it but with our six children at school in Newcastle we decided it was not on,” he says.
So McKechnie named it The Samling (a local word for a gathering) and developed it as a retreat for executives to recharge. It was aimed at the top end of the corporate market and well-heeled individuals
He described it as being a version of Richard Branson’s Caribbean hideaway island of Necker. As well as the corporate world it soon became a popular retreat for the jet-set which numbered Tom Cruise and Nicole Kidman as regular visitors.
“It was a fantastic place. They could bring their entourage and know they wouldn’t be disturbed by the paparazzi,” he smiles. “I really enjoyed doing it, but I got a flesh-eating bug, had a huge operation, was out of circulation for a year, and sold it to Tom Maxfield (the former Sage executive). It was a shame and it’s probably now worth three times what I sold it for!”
McKechnie also attached the Samling name to a charitable arts venture which he helped launch. This is now based in Hexham and aims to nurture musical and artistic talent.
On recovering from his illness McKechnie got involved in investing in businesses and mentoring their managers. He took a stake in a car share company, which he said was “probably five years ahead of its time” and also helped Hossain Rezai launch Pride Valley Foods – a hugely successful flatbread firm in Seaham, County Durham.
His knowledge of the food industry saw him become involved with the Northumbrian Larder which was set up to market and develop the produce of North East independent regional food companies during the foot and mouth outbreak.
And as farmers markets and delicatessens grew in popularity he realised there was a big potential in locally sourced quality food.
However the punitive costs of establishing a distribution network for chilled and, or frozen foods meant another solution had to be found.
“We didn’t have a cat in hell’s chance of going down that route because of the costs involved and we had to find another way of doing it.”
It was while on holiday in Spain that McKechnie came across the solution.
“I was in a newspaper shop, it was 40 degrees centigrade and there was a range of artisan recipe dishes on display that weren’t in the chilled food cabinet,” he explains.
“I thought, how does that work? So I bought the whole range and took them back to England thinking if we could reproduce this packaging we could be on to something.”
After learning how to make the packaging – an impenetrable laminate with a thin layer of glass – McKechnie had to find a way to pressure cook the meals to give them a long shelf-life.
He heard about a method used in Italy to preserve tuna and tomatoes and got in touch with an academic who was the world expert in the technique.
After loading his 4x4 with Northumbrian rabbit, venison, sausages, cheese and smoked haddock packed in ice and drove from County Durham to Parma and this led to a cooking experiment in a lab in the Italian city’s university.
McKechnie recruited his former business partner Keith Gill and they raised enough cash, secured a Government grant and got the business up and running.
The meals were branded Look What We Found and at the International Food Exhibition, in London in early 2005 they secured orders from Waitrose, M&S and Virgin Atlantic.
Despite fighting back from a serious illness, and being in his early 60s, McKechnie had no qualms about setting off on another business adventure.
“It just seemed like such a good opportunity. The original plan was to build it and sell it within three years, but it has taken a bit longer and cost a bit more than we thought,” he smiles.
“But all the things that we envisaged in 2004 have come true, in fact the market potential is bigger than we originally thought. The Look What We Found! range retails from £1.99 to £2.99 and as well as major retailers it is also continuing to make inroads into the airline and railway markets.
McKechnie is excited about the prospects of its new ranges of diet and allergy-free meals which helped Tanfield attract a £3.4m investment from Swiss venture capital firm Inventages last year.
This has helped the firm double the size of its factory to 35,000sq ft and he says Tanfield now has the capacity to generate revenues of £2.5m a month from the previous £1m a month on a two-shift system.
But the perpetually jovial McKechnie, who breaks into song at one point during our interview, cheerfully notes that after five years the company is now making money.
“We have spent a fortune on research and development and technology. We are more like a biotechnology company in that respect. We have made great strides in improving the technology and investing in new and better machines. But it’s important that we still keep that kitchen atmosphere.”
He also feels the same dynamic that he experienced with Derwent Valley Foods. “The sales progress is almost the same, but we have a much bigger market to go at then Phileas Fogg,” he says.
McKechnie, who now has nine children after “picking up another three along the way” (adopting them) has battled to raise the money to keep the Tanfield dream alive.
Although it was widely reported that he had pocketed £7m from the sale of Derwent Valley Foods to United Biscuits he says he took all of the remuneration in shares and by the time he sold them they had fallen from £4.40 to £2.20.
That did not deter him from trying to buy the Phileas Fogg brand back from United Biscuits, but was rebuffed.
The energetic McKechnie may well turn out to be one of the few North East entrepreneurs to build up two businesses from scratch and sell for over £20m.
And despite appointing a new chief executive to take over the running McKechnie has no plans to stand down. “I’ll still be coming into work every day,” he insists. “I just love it. I just love doing business.”
What car do you drive?
What’s your favourite restaurant?
The beach bar in Torreguadiaro in Spain, great fish, no shoes, full sun
Who or what makes you laugh?
Cheap Flights – the song by comedy band Fascinating Aida
What’s your favourite book?
Any Rough Guide
What’s your favourite film?
What was the last album you bought?
A stamp album when I was 12
What’s your ideal job, other than your current one?
Renovating wrecks (houses, not ships or cars)
If you had a talking parrot, what’s the first thing you’d teach it to say?
Where are the car keys?
What’s your greatest fear?
Letting people down
What’s the best piece of business advice you have ever received?
Do it differently, do it better, and flaunt it
What’s your poison?
Marques de Riscal rueda verdejo
What newspaper do you read, other than The Journal?
How much was your first pay packet and what was it for?
£15 for hod carrying on a building site in Middlesbrough
How do you keep fit?
Used to be running, now walking and not enough of that.
What’s your most irritating habit?
Leaving doors open
What’s your biggest extravagance?
Dragging up nine kids
Which historical or fictional character do you most identify with/admire?
And which famous people would you most like to dine with?
Nelson Mandela, Bill Clinton, Jack Nicklaus
What would be your epitaph?
We had fun making it happen