dolution

Case Study

DUMPY BOTTLES FOR BABY PROVE A WORLD BEATER In June 2005 Edward Atkin sold his family business Cannon Avent for £225m (US$404m). It had become one the largest producers of babies’ feeding products, including bottles, sterilizing equipment and breast pumps. In particular, Atkin invented the first babies’ bottles that were squat rather than long and thin. Cannon Avent, which was renamed Avent after the sell-out, does all its manufacturing in the UK, mainly at a high-technology plan in Suffolk, exporting 80 per cent of its products on the feeding side, total sales of which have risen nearly twenty-fold since 1989. It sells in sixty countries. Its strong exporting is managed through its fifty-strong head office in London that accommodates people from twenty-two countries, capable of speaking many languages and able to sell products around the world.
Total global sales of feeding products are estimated at about £600m (US$1,076m). Avent has about a sixth of the market, with 80 per cent of its sales coming from outside the UK. The US produces about 40 per cent of revenue. Total sales in 2004 were £109m (US$196m), of which about 85 per cent was accounted for by baby products and the rest from automotive parts. In 2004 Cannon Avent made pre-tax profits of £18.5 m (US$33m), a high ratio for a UK manufacturer.
The new management at Avent is continuing to follow a strategy of developing innovative baby feeding products. Following this objective, it is expanding into new types of breast pumps that are easier for women to use, including novel electronic systems to express a given amount of milk in as short a time as possible. It is investigating entering areas such as skin care lotions for mothers and babies and equipment to hold nappies and other baby-related items. It wants to expand in emerging economies such as Brazil and China, where the business of baby products is relatively undeveloped.