W. Garfield Weston - Depression

Depression

In spite of the onset of the Great Depression, Weston continued to expand operations in Canada, often acquiring financially troubled competitors. In 1931, the Independent Biscuit Company of Calgary, Alberta, was bought out, followed by bankrupt Ontario Bakeries, with seven plants, two years later. Weston Bakeries executive Frank Riddell years later noted that it was by virtue of the company's ability to access credit that made such acquisitions possible:

"No one had any money in those days, but Weston's at least had a good reputation, some assets, and a record of profit. During 1930 and 1931 the company paid out dividends totalling more than $228,000. That record, along with Mr. Weston's salesmanship, enabled us to get a good line of credit. We financed and refinanced in order to expand, and often you could purchase a good deal with relatively little cash and the guarantee of Weston stock."

In 1931, with the world mired in the Great Depression, the price of wheat collapsed and the incomes of Canadian farmers, particularly those in Western Canada, plunged. Weston, with business and family ties to the West, devised a plan to expand international markets for Canadian wheat, then the country's most important export. In spite of a detailed report that advised him to stay out of the British Isles, he proposed to acquire and modernize bakeries there. Those bakeries would then buy Canadian wheat that would produce a better quality of bread for the British public. But Weston found Canadian financial institutions unreceptive. Rejected by the banks, he arranged a meeting with a group of New York speculators and secured a reported $2 million in financing.

Weston's first acquisition was the biscuit division of Mitchell & Muil, a century-old Scottish baker, in 1933. He closed the antiquated plant at Aberdeen and moved production to a new facility with modern equipment at Edinburgh, with the intent of mass-producing a more affordable line of quality biscuits. "He sold fancy biscuits at exactly half the price at which they were sold by the world-famous firms all around him and he coined money." Fifteen months after entering the British market, Garfield Weston reported sales equal to the parent Canadian company. He further announced his intention to establish bread and biscuit operations at strategic locations throughout England, Scotland and Ireland:

"Some may wonder why we are going so much into bread. The British Isles, we believe, are a favourable field at present not only for the biscuit business but infinitely more for the baking of good bread. We are being morally and financially supported in a very large move in Great Britain to make better bread. Better bread can only be made in Great Britain by using more Canadian wheat. The objective of our British development in the next few years will be along the line of bread-making."

Within a few years, Weston had acquired a string of biscuit and bread plants in the United Kingdom. In order to manage the growing overseas venture, he moved his family to England in 1935. By 1937, with 15 plants, employing more than 15,000 workers under the Allied Bakeries banner, Weston was being referred to in the Canadian press as "Britain's Biggest Baker". By 1939, he controlled 30 bakeries throughout the British Isles. Meanwhile, Weston operations in the United States were reorganized in 1931 and a biscuit plant established at Passaic, New Jersey. In 1936, the company set-up a new Weston's Biscuits factory at Battle Creek, Michigan, and three years later bought out bankrupt Associated Biscuit Co. of Salamanca, New York.