When you take a sip of beer or whisky you probably never give a thought to the malt that went into the drink. But if you did, you would realise that there is a good chance that it was produced by Simpsons, a 153-year-old, fifth generation malting business from the north of England.
Brewers such as Adnams, Theakstons, Meantime and Timothy Taylor, as well as distillers such as family-owned William Grant & Sons – makers of Glenfiddich whisky – use Simpsons malt.
Malting – the process of adding water and heat to barley until it starts to germinate – might seem like something from a by-gone world of flat-caps and horse-drawn carts, but Simpsons’ business is flourishing.
“A lot of our product goes north to the distilling industry at the moment,” says Richard Simpson, great-great grandson of the founder and the business’s vice-chairman since 2013. “I don’t think we’ve ever sent as much to distillers.” Exports are up too, as countries such as Japan develop a taste for a wee dram.
The craft beer boom has been another help to the company. “When my dad started there were hundreds of breweries everywhere, there was a steady decline in regional brewers and a lot of consolidation,” says Richard. “The craft brewing trend is a shot in the arm and they seem to appreciate what we do and how we do it.” American microbrewers producing English-style beers in particular look to the UK for ingredients, and often that means Simpsons.
Trendy bars in Tokyo and New York are a far cry from the company’s roots. It was founded in 1862 in the small town of Alnwick in the county of Northumberland by James Parker Simpson, and by the time he died in 1897 he owned seven maltings across the region. In 1901 James’ son Richard Hurst Simpson build a large maltings in Tweedmouth, Berwick-upon-Tweed, where the business is still based. By 1945 the family owned 15 maltings.
The business now owns employs over 200 people and produces about 300,000 tonnes of malt a year. In 2013 turnover was £158m and pre-tax profit was £7.5m. One reason businesses like dealing with his family business, says Simpson, is “because they like our model.” The business owns its own agricultural merchants, meaning that they source their barley from their own fields.
That means it needs tremendous amounts of working capital – barley harvested in October and November has to be stored in silos for up to 12 months – but it means they can foresee any shortfalls of raw materials well in advance. And stability is in the DNA of Simpsons. Richard says that when they are talking to banks he loves to unveil the chart that shows the profits. “It’s pretty much a straight line,” he says. “There are the odd troughs and waves, but overall we have grown at about 2% a year for 150 years.”
That stability is also a function of the company’s structure. Over 90% of the shares are owned by 21 family members (the rest by ex-employees or their descendants), and five of those family members work in the firm.
Richard’s father Simon, who ran the business from 1980 to 2013, is the chairman and “does two days a week, which provides fantastic continuity, mentoring and coaching. He has been there and done it and he tells us things are not as good as we think they are, or it not as bad as we think they are, depending on what is required,” says Richard.
His brother is in charge of sales, “visiting all the craft breweries up and down the country and across the world,” Richard says. A cousin runs the purchasing department, and Richard’s mother has been on the main board for 20 years. “She harangues us about quality when she thinks it isn’t good enough,” he chuckles.
Also typically of family firms, Richard knows the business inside out. While at university he worked at one of the firm’s maltings, sweeping, carrying bags and turning the malt with a shovel. “Development, I think they called it,” he remembers.
On graduation he went straight into the firm, gradually modernising as he went. He has installed a computer and email system, and ran the HR operation for a decade before taking his current role. Over the past 20 years the company has invested £25m upgrading the equipment until the old floor-malting system has been replaced with modern drums.
Like many family businesses Simpsons is a romantic mixture of something old and something new, an “ancient process” as Richard calls malting, “using all of modern technology to make that as consistent as possible.”
Despite all the aluminium and computers, the expertise of the old-hands is irreplaceable. “The production people still walk around and get the barley in their hand and rub it to see if it is ready,” says Richard. “There is some stuff that science hasn’t caught up on yet. That is the art of malting, I suppose.” Who wouldn’t raise a glass to that?