personal finance

On a (vegan) roll: why we can’t get enough of Greggs


One morning towards the end of summer I pay a visit to London Bridge station. The day is warm and sunny and, in spite of the news, which is as unrelentingly grim as ever, I feel suddenly hopeful; optimism rising inside me like mercury in a thermometer. The station, whose acclaimed £1bn remodelling by Grimshaw Architects has been shortlisted for the 2019 Stirling prize, is airy and spacious, in spite of the crowds it must accommodate, and the ribbons of wood that cover the ceilings of its vast concourse give it a Scandinavian feel, at once modest and grand. It is like some 21st-century cathedral: a rush-hour temple that for all its circulatory efficiency is determined to remind the harried commuter that there is more to life than work; that a moment of contemplation is worth, if not a missed train, then at least a dozen emails.

The new London Bridge is, to my eyes, Britain in microcosm; its history and its people. Its brick viaducts, for instance, speak of its Victorian beginnings – the first station to be built in the capital, it dates from 1836 – while Grimshaw’s concrete arches subtly conjure postwar brutalism and the building boom of those years. There is an ineffable sense of confidence here, of a kind that many of us haven’t much felt since 2012 and the Olympics. Western Arcade, which links the mainline station to the underground, is devoted to smart shops such as Kiehl’s and the shirtmaker TM Lewin, as well as to a breed of cafe that sells – a sight new to me – “red velvet croissants”. But since last December it has also been home to a branch of the somewhat less elite Greggs, Britain’s largest and best-value bakery chain, where a hungry traveller in search of a bargain can still pick up a bacon bap and a cup of coffee for just £1.80.

With Brexit looming, who knows how well Kiehl’s will do at London Bridge – or even Pret a Manger and Leon? If, as seems almost certain, food becomes more expensive in Britain, and workers more worried about their jobs, people may soon be rather less inclined to spend their money on such quotidian luxuries as moisturising lotion, crayfish sandwiches and Moroccan meatballs. The crisis that currently afflicts the high street – shops closing, premises standing empty, major companies posting profit warnings – may not be strictly applicable to the busy realms of neatly designed transport hubs such as this one; in contrast to the decline of traditional stores, the so-called food-to-go market is set to grow by £2bn over the next three years. Nevertheless, chill winds blow from every side. In the second quarter of this year, the economy shrank by 0.2%. Another contraction in the current quarter would signal a recession. Meanwhile, confidence ebbs away. Consumer confidence fell sharply in August. Last month, Lloyds Bank reported that businesses are at their gloomiest since 2011, when the UK was still recovering from the financial crash.

If any business can defy this mood, it seems likely to be Greggs. But then it’s already doing just that. In the six months to 29 June, pretax profits at the company rose to £40.6m, up from £25.7m in the same period last year, an amazing 58% rise in first-half profits, with sales up nearly 15% in total. When these figures were released, to a media fanfare that loudly contrasted such success with the misery elsewhere on the high street, its chief executive, Roger Whiteside, spoke of an “exceptional year” at the company, a period that began with the publicity attracted by the launch of its vegan sausage roll last January (23% of those purchasing it were new customers – and once they were inside the store they couldn’t resist buying other things too).

That, however, is hardly the whole story. Greggs has been growing steadily for years now, a success story largely unnoticed by those who buy their breakfast at Starbucks, their lunch at Pret and who are very keen indeed on avocados (Greggs, incidentally, now has a greater share of the UK coffee market than Starbucks). It has had bad times, of course. Its worst year ever was 2013, when it found itself at a crossroads (we’ll come back to that). Nevertheless, it remains one of very few British businesses with an unbroken record of dividend payments to its shareholders (the company was floated on the stock market in 1984).

Greggs
(@GreggsOfficial)

Two sausage rolls, both alike in dignity, In fair Greggs, where we lay our scene… #Valentines pic.twitter.com/TJehdPNU7v


February 14, 2019

The London Bridge branch isn’t big and has no seating, but there are noticeably more customers queuing inside it than at any other store in the station and after a while I join them. I pick up a vegan sausage roll, which I will road test later, and a Portuguese custard tart (a new line in London branches) that looks just like the ones you buy in the overpriced deli near where I live, but at less than half the price. I also ask for a flat white and a bacon roll (the latter is made to order, with the sauce of your choice). The bill comes to £5.10.

Minutes later, I’m outside again, sitting on a bench, people-watching, roof-gazing and eating: my own moment of contemplation. I consider myself an aficionado of bacon butties and this one is excellent: the white roll, smeared with ketchup, is soft with a good crumb and the bacon is crisp and not too salty. The coffee is also good, if a bit exiguous. This bap isn’t the first thing I’ve ever eaten from Greggs, but it is by some stretch the most delicious, though how much Grimshaw’s soaring edifice has to do with this, I wouldn’t like to say.

Greggs of Gosforth: the first Greggs store.



Greggs of Gosforth: the first Greggs store, which opened in 1951. Photograph: Greggs

Greggs began life in 1939, when a man called John Robson Gregg started selling eggs and yeast door to door on his bicycle around Newcastle upon Tyne. The first bakery, Greggs of Gosforth in Gosforth High Street, opened in 1951. Today, with some 2,000 shops and 20,000 employees, its HQ is still in Newcastle, housed in an unprepossessing business park a 20-minute drive from the centre of the city. The company is well known for its publicity stunts and adept way with social media – “a masterclass in public relations”, said PR Week of the launch of its vegan sausage roll – but when I ask to meet those who run it, there is a certain amount of what feels like foot-dragging. It seems that while the Greggs marketing team is relaxed about feeding stories to the Sun and the Daily Mail, it’s rather less interested in giving the Observer access to its secrets, though I could be imagining this, given that it’s also currently trying quite hard to change the way people see it. Perhaps I’ve just caught them on the hop.

In the end, however, a trip is arranged, which is how I come to be sitting in the test kitchen at Greggs’ HQ one overcast morning with Kate Jones, its senior product development manager. It was Jones’s team that developed the vegan sausage roll; the very item that Piers Morgan greeted on Twitter with the words: “Nobody was waiting for a vegan bloody sausage, you PC-ravaged clowns” – cue the biggest social media storm ever to hit the world of baked goods (“Oh hello, Piers, we’ve been expecting you,” replied Greggs, smoothly). How quickly did they know it was a hit? (It’s now a bestseller, though they won’t give me numbers – on this or anything.) “From day one,” says Jones. “We got great coverage, there was Piers Morgan, and it snowballed from there.”

Did she have any doubts beforehand? “It was very challenging. Rolling a new product like this out is difficult because the whole supply chain has to be vegan: storage, transportation, how it’s handled in the shops. It would have been easy to give up. But we knew there was a gap in the market for a hot vegan snacking product. A couple of years ago, we were working on a vegetarian sausage roll and it was almost ready for launch. It was, though, becoming very clear from customers that as more people are avoiding certain foods – like dairy, say – vegan products are becoming a proxy for flexitarian diets.”

Greggs
(@GreggsOfficial)

To address the confusion… #LoveIsland pic.twitter.com/fwFkqbEcIP


July 18, 2019

The vegetarian sausage roll was ditched and the company began working instead on a vegan one. What’s inside it? Jones smiles and looks coy. “We work with Quorn and then we add our very secret savoury flavouring.”

Jones, a home economist by training, began her career at M&S, where she worked as a buyer for 16 years; later, she led food policy at the Co-op. Nevertheless, moving to Greggs represents a “big” career change for her. “I’ve come out of retail and into food-to-go,” she says. “And I’m also working in a company that is fully vertically integrated.” I must look blank, because she adds: “I mean one that makes virtually everything itself, rather than buying anything in.”

Her team develops all its products, first in this kitchen, in pots and pans, and then in the industrial stage (vats, rather than pans). An average Greggs store has about 150 food products. Her team creates 50 new ones each year, though this number includes items where only an ingredient has been changed or a sandwich filling tweaked. How many people taste something before it goes out? “We have a good 30 to 50 people who do factory trials as part of their jobs and then we hold panels with the wider Greggs population, people from finance or HR or wherever, who try them. We want people who are not necessarily dead close to the product, who haven’t nursed it from conception, to say if they like it.”

Greggs’s bestselling vegan sausage roll.



Greggs’s bestselling vegan sausage roll. Photograph: Amy Fortune/Alamy

She takes me on a tour. First, we meet a baker, Fraser, who is icing new flavours of doughnuts that may – Jones is slightly reluctant to tell me – be launched next year: cookies and cream and honeycomb. Then we visit its sensory booths: compartments that bring to mind those cubicles you see in TV dramas in which a prisoner communicates with their visitor via a telephone through a screen. On one side of a divide someone from Jones’s team pushes whatever is to be tasted through a hatch. On the other is the taster. The cubicles are tightly controlled in terms of heat and light and no taster is able to see the reaction of their colleagues. To avoid weariness, he or she only ever tries three products at a time.

What are the areas of growth for Greggs? “Health,” says Jones. The company anticipates more legislation around calorie reduction and believes it’s already well ahead in its planning for this. What else? “Hot food – and coffee is huge.” How would she sum up the company’s ethos, food-wise? “Taste and great value for money.”

Are perceptions of Greggs changing? It seems to me that if they are, then the success of its vegan sausage roll is emblematic of such a shift. But what does she think? Are people still snobbish about it? Do they still think that it only sells greasy, stodgy foods to those who want, and need, to fill up quickly for very little cost?

“Two years ago, I might have said yes,” she tells me. “I’d have looked at my mother and taken her as absolute proof of that. But now it’s becoming quite savvy to get it – to know about our quality.” This moment reminds her, she says, of when discount supermarkets such as Aldi and Lidl came along. “There were Waitrose shoppers who suddenly realised they could get great commodities at Aldi.” I remember this too. “Just guess where this smoked salmon came from!” shouted the broke middle classes, as if with one voice. But are the two things really the same? She nods. “People are genuinely delighted when they explore the range of our products.”

As I listen to her, I take her words with a fairly hefty pinch of salt. A few weeks later, however, I will open a magazine and there will be Nicky Haslam, the old Etonian society decorator who once claimed to have had an affair with Lord Snowdon, proudly insisting that Greggs’ coffee is “the best”.

In the hope of bringing new customers – and a new kind of customer – to Greggs, the company has deployed a number of stunts. Some are cheesy. A Valentine’s Day promotion offered “fine dining” in stores, where waiters dressed in black tie served guests mini doughnuts in chocolate dipping sauce. Others are nifty and smart. Last year, for instance, it attended a food festival in Richmond, Surrey, where it offered visitors its wares under the name Gregory & Gregory. When the sign was turned around to reveal the word Greggs, people could, says Hannah Squirrel, the company’s marketing director, “hardly believe it”.

Greggs at the Richmond food festival.

Others are downright cheeky. There is a branch of Greggs opposite Fenwick of Newcastle, the Harrods of the north. Last year, just as Fenwick’s Christmas windows were revealed to the public, a display that usually attracts a crowd, the company flipped the Greggs sign so that it would no longer be back to front when reflected in the glass. News of this coup is said to have travelled as far as Australia. Its missteps are rare, though there was an outcry in 2017 when it replaced Jesus with a sausage roll in a nativity scene (the company soon apologised).

But it is a balancing act. Loyal, older customers – the kind of people, perhaps, who caused a selection of sausage roll-covered socks, umbrellas and iPhone cases to sell out at Greggs on the first day they became available – must be kept on side, too, for they are the majority and still the biggest key to its success. To that end some stores continue to stock regional items, available only in certain parts of the UK (stotties in the north-east, Empire biscuits in Scotland, Tottenham cakes in London; there are reputed to be 25 such delicacies). For these customers, service is extremely important.

“People will tell us proactively that they left the shop with a smile on their face,” says Squirrel. “There was banter, it was down to earth. Some people say that our staff have been known to begin making up their usual order even before they’ve stepped in the door. They’re regulars, they’re recognised, and they like that.” Are its northern roots still relevant? “Yes. Because it has never lost sight of its original values.” This filters down, she believes. It feels, she says, caring and warm.

Greggs began acquiring other bakeries in 1972, first in Glasgow and Leeds, and then in Manchester, London, Kent and East Anglia (by this time, John Gregg had died and his son, Ian, a lawyer who read classics at Cambridge, was running the business; he is now a philanthropist). In 1994, it acquired Bakers Oven, a chain of bakeries in the south, shops that it rebranded as Greggs in 2008. The 1,500th store, in York, opened in 2011.

In his 2013 book, Bread – a memoir-cum-business-manual that includes recipes for bridies, parkin and bread cakes (otherwise known as white rolls) – Ian Gregg describes his great joy and sense of relief when, on its flotation in April 1984, the company’s shares were oversubscribed by a factor of 90. But he also writes – he was always something of a reluctant entrepreneur – of the anxiety he felt. He worried about its “culture”; that its “values” might not be maintained. Three years later, in 1987, he established the Greggs Foundation. So far this year, it has provided 6.6m breakfasts to children in underprivileged communities.

Roger Whiteside became chief executive in 2013, having first joined the company as a nonexecutive director. (After university in Leeds, he began his career at M&S; he then launched Ocado, worked for a private equity firm on the Thresher Group and put in a stint at Punch Taverns.) Whiteside is the kind of enthusiastic, plain-speaking leader you hear on Evan Davies’s Radio 4 business programme, The Bottom Line (he recently appeared on the podcast of retail guru Mary Portas). It comes as no surprise when he chooses to meet me for lunch in the branch of Greggs nearest his office (when I say near, what I mean is that if he chucked a hot steak bake out of his window, it would land outside the shop’s door). I’m embarrassed to admit that, at this point, I’ve never eaten in Greggs. But this doesn’t bother him at all. It’s perfect. Another convert! “Have a sausage roll,” he says. Is that what he’s having? “No, I’ve already had one this week.” He will have a chicken caesar wrap.

When Whiteside joined the company he immediately liked what he saw: “Businesses operate on a moral compass and Greggs is at the nice end of that compass, as opposed to the purely hard-nosed end. I prefer this end: trying to do business in as good a way as you can, given that there is always tension between trying to make a profit and behaving well.”

In particular, he liked the profit share scheme, which he believes contributes “massively” to the atmosphere at the company and to its success (10% of its profits are shared with every member of staff, so long as they have been at the company for a year). “We look after our people and they respond by giving better service,” he says. How does he know this? “We do rigorous engagement surveys and the scores are always high. And remember when we had snow? A Greggs lorry got stuck and the driver took it upon himself, knowing he was not going to get to the shop, to distribute his goods, free, to those behind him. He didn’t ask for permission, because he didn’t need to.” Did this please him? “I was over the moon!”

A Greggs delivery driver hands out free cakes and pastries to snowed-in drivers in March last year.



A Greggs delivery driver hands out free cakes and pastries to snowed-in drivers in March last year. Photograph: Les Goff/PA

All the same, in 2013, he had his work cut out. “Greggs’ worst year ever. It was losing market share in bakery, where it had been competing with supermarkets for decades. To compensate for that it had been developing a presence in food-on-the-go, but it was also losing share there too, because there were so many new entrants to that sector: Costa, Subway, Tesco Express, M&S Simply Food… We also had a coffee shop concept.”

Whiteside decided that the company could not compete on three separate fronts and that it would henceforth concentrate on food-on-the-go. Its “offer” was completely revamped, with more focus on the growing breakfast market as well as on healthier and hot foods, its stores were refitted and, to support all this, its 12 factories were consolidated, with those remaining concentrating on the manufacture of just one item. (Its cream cakes are now all made in Leeds, for instance, and its rolls in Enfield.).

Meanwhile, Whiteside pondered Greggs’ locations. People like Greggs, he believes, for the freshness of its goods; the supermarkets sell a wider selection of sandwiches at similar prices, but unlike Greggs, theirs are made in factories and kept for two or three days (Greggs makes its sandwiches in store and they are not kept overnight). However, there is also the question of convenience. “No one leaves the house looking for a Greggs,” he says, with some honesty. “They leave the house and then they feel hungry.” Where are they likely to be when this raging hunger strikes? With footfall on the high street in decline, Greggs began opening branches in office parks, on garage forecourts and other out-of-town places.

“We open 150 shops each year and 90% of those will be non-high street and we close 50 every year, and those are all high street. In the past six years, we have closed 300 high street shops, but we have opened a lot more elsewhere.” Opening hours are being extended in some stores in the hope of luring in evening diners. As Whiteside boasted this summer, “We want to try and do the same for evening as we did in breakfast.”

In the next five years, the company will open 100 stores every year, in the process creating 1,000 new jobs every year. And after that? “Each of our shops currently has only one queue: the walk-in queue. We want to build three: we want to add click and collect and delivery, both of which we’re trialling.” Does he visit his stores incognito? “I don’t announce myself. But in today’s video age, a lot of people recognise me. With ears like this –” he points to the sides of his head – “I haven’t got a chance! I’d need a toupee and Sellotape.”

Greggs
(@GreggsOfficial)

Oh hello Piers, we’ve been expecting you


January 2, 2019

Perceptions of Greggs are changing, he says. People like me – a wide smile – have outdated views about it. However, this takes careful management. When the company ceased to be a traditional baker, people were upset. “I’ve got a drawer full of letters from customers who were angry they could no longer buy their loaf. The customer is always right, but you have to say to those who are hanging on to the past that you are not there for them any more.”

How posh would the company go? “We’re not posh now.” Would he put, say, hummus on the menu? “We’re not going to do things that have limited appeal. We democratise things that have a growing appeal. We will sometimes take things we see in London, like the flat white. Other things we’ve tried [to copy] only have appeal in London, like protein pots. Two boiled eggs on a bed of spinach. Even at half the price, no one wanted it.”

As Whiteside talks – at moments, he is unstoppable – I think about Greggs and its long history. Its metamorphosis says so much about British eating habits and all the ways in which they’ve changed (and, equally, not changed at all – for don’t we still crave pastry, even if it is free of animal fats?). The company has reached its zenith, moreover, at the same time as the major political event and potential catastrophe that is Brexit. Its Britishness, its success, and this historical moment appear, in some way, to be linked, though it’s hard to pin this down precisely. Does Greggs have a position on Brexit? “No,” says Whiteside. “It’s too divisive. Our customers are split. We’re not going to take sides.”

Nevertheless, Britain’s leading purveyor of Empire biscuits (two rounds of shortbread stuck together with jam), emphatically does not support a no-deal Brexit. “We’re preparing for the worst and hoping for the best. If there is disruption at the port… We might go short of salad. We don’t grow enough here and you can’t store it. What if we’ve got no lettuce? Can we still make a sandwich without it? Would spinach be an acceptable replacement? Or would we have to discontinue certain sandwiches?”

He looks at his chicken caesar wrap as if it contains half the mysteries of the world.

The view from the counter: customers’ verdict on Greggs

Kshitij Patel outside the Great Portland Street branch of Greggs.



Kshitij Patel outside the Great Portland Street branch of Greggs. Photograph: Anita Sethi

Kshitij Patel, 53, IT engineer (Great Portland Street branch, London)
It’s a good price – elsewhere in central London the prices are bonkers. I’m from Luton but I commute to Soho to work and stop by here especially. It’s quick service and great for vegetarians. Since they brought in the vegan roll it’s been fantastic. Occasionally, I get the tuna bake. I’m a regular here but it’s not my daily routine – it would be too fattening to come every day! It’s my treat for the week. Today, I’ll be having two vegan rolls.

Jay Reed, 44, Builder (Great Portland Street branch, London)
I love the fact that the price is good and the food tastes great. I work just around the corner. I’m a builder and a regular here. I love the breakfast – bacon baguettes, sausage rolls and steak bakes are my favourites. We’re back at lunchtime too for one of their sandwiches. Whenever I see a Greggs I pop in and get something – I can’t resist.

Fiona Mayle, 62, works at the Foreign and Commonwealth Office (Westminster branch, London)
Greggs increases my wellbeing in the morning. I live in E13 but work at the FCO. I love that the service is very quick and also the excellent meal deals, which I often get – a roll with sausage or bacon and a coffee. Today, I will have a lovely sausage roll with tomato sauce – a great start to the day.

Andrew Koumis, 30, analyst (Westminster branch, London)
Their sausage rolls are my absolute favourite and great value for money. I’ve been coming to Greggs regularly since this branch opened [last year]. Several of my colleagues and friends also come – it’s so good to have a branch in the area.

Sheena Mal, 29, commerce consultant (Westminster branch, London)
I love Greggs – it’s affordable and tasty. The pasties and the breakfasts are fantastic. Today, I’m having the creamy porridge. I’ve been going to Greggs for years, including the one in the area where I grew up in west London. There’s always something I like and often something new on the menu.

Eleanor Lisney, 60, disability campaigner (Westminster branch, London)
I live in Greenwich but I’m here for a meeting. It’s great to find Greggs here. I come for the vegan food. I love the vegan rolls. I’m a wheelchair user and in terms of accessibility restaurants are variable but I’ve never found any Greggs inaccessible. It’s good to find a branch at the actual tube station.

Prav Gupta, 35; Steve Agate, 45; Masoud Bayat, 42, IT consultants (Westminster branch, London)
We’re colleagues and often come here together – we love how the smell hits you when you get off the escalator first thing in the morning. The breakfasts really set us up for the day, including the omelette and sausage rolls, and nothing beats a good coffee from Greggs to get the day started.

Aamna Mohdin, 27, news reporter (Westminster branch, London)
I love how cheap it is. I grew up in east London and went to the Greggs there but stopped going for a while. It’s the vegan rolls that have brought me back!

Interviews by Anita Sethi





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