An enterprise with a big bite ©Neville Williams Can-do attitude: Graham Baker watches tins of Butcher's dog food on the production line Graham Baker thrusts a gloved hand into a vat of glistening entrails to pick out what looks like a wet rubber bath mat. What has drawn the attention of the chairman of Butcher's Pet Care, the UK's largest independent dog-food maker, is a piece of tripe - the stomach lining of a cow. Tripe was the raw material for the first - and still most popular - product made by the company: Butcher's Tripe Mix. Butcher's is the UK's largest buyer of tripe - "not a great claim to fame I admit." Mr Baker, 60, is taking a turn round his new factory at the company headquarters near Crick in the Midlands. When fully operational this £35m investment will be able to produce 1m cans of pet food a day. Sales last year were £74m, and the company hopes to hit £100m in the next 18 months, thanks to its premium "natural nutrition" brand boasting an all-meat recipe that is gluten free and uses no artificial colourings, flavourings or preservatives. The factory was financed with cash from the business, and loans from banks including a £5m interest-free loan that Butcher's won as a prize in a bank's entrepreneur competition. Mr Baker smiles as he recalls the origins of Butcher's, which today has 230 employees. It was started 25 years ago in a corner of the family-owned abattoir to solve the problem of what to do with the waste byproduct: "I noticed there were all these people coming to the back of the [abattoir] asking for tripe for their dogs." The Butcher's brand operated as a wholly owned subsidiary of Baker Group, the family-owned slaughterhouse company, which had Europe's largest beef processing plant, with a turnover of £150m. The company supplied meat to the restaurant trade in Europe, as well as leading food processors and supermarkets in the UK. The Butcher's transformation into a leading British consumer brand for pet owners is a lesson that even a small, family-owned business can take on multinationals - and not just in its home market. Its success is even more remarkable considering the effect that BSE had on the rest of the family business. In 1996 the neurodegenerative disease in cattle was officially linked to the human disease variant CJD. The EU banned all beef exports from the UK, London ordered the cull of all cattle aged more than 30 months and Baker Group faced an existential crisis. By the time I came to work the following Monday we had no raw material. We had no customers. We had 1,200 people with nothing to do and we had meat being returned to us from all around the world. The business struggled on but by the time the ban on UK exports was lifted after 10 years, the meat factory had closed. Butcher's, which had swit­ched to using more non-banned meat such as chicken, was the only part of the original group remaining at Crick. Today Butcher's has a fifth of the UK dog-food market, and claims to be bigger in the UK than Nestlé"s Winalot brand and only slightly smaller than Pedigree Chum, the market leader from Mars. How Mr Baker ended up owning the pet-food business outright was not planned and was in part the result of family tragedy. Following the BSE crisis the banks had forced Baker Group to sell and lease back the meat factory site. At the same time Mr Baker and his three brothers decided to split the ownership of the group, which comprised the meat business, a transport operation, various farms and the pet-food company. Then, during the period when the talks were taking place, one of the brothers died. "Now we had to talk to his executors, who could never make a decision," Mr Baker says. The death also led to a sale of land they owned separately. This - along with remortgaging his house - gave Mr Baker enough cash to buy out his brothers" interest in Butcher's, although part of the deal included taking on the pension deficit of the old abattoir business. Would the break-up of the group have happened without BSE? We still would have got to that point when we had to decide how to pass it on to the next generation. The business we've got was never going to go to a load of different cousins . . . It would never work. It needed strong leadership. Mr Baker was the youngest. But we all had different family situations. Some of us had children in the business. I had remarried and had a second family. So I was driven. I needed a good income. He also had a more formal business education, having taken a two-year college course on meat technology - the others had joined the family business at 15. In fact, he had been sent away to boarding school against his will because his mother thought there would not be scope in the family business to provide him a living. The technical knowhow he gained at college stood him in good stead to develop But­cher's and will do so again now as the new factory works through teething pains. Mr Baker intends to use the extra capacity to build the Butcher's brand in Poland and other eastern European markets. The size of the market "is not really about the population of dogs," says Mr Baker. If you take Poland, for example, there are about the same number of dogs as there are in the UK, but the market for industrially prepared pet foods is probably about 20 per cent of what it is here. They're still feeding their pets from waste product from small rural slaughterhouses. In Poland, Butcher's has a 2 per cent market share but awareness of the brand has increased from 4 per cent a year ago to 20 per cent today. The UK market, according to the Pet Food Manufacturers" Association, is holding up well during the recession. But Mr Baker says the economic downturn has nevertheless affected margins. Rising material costs and financing for the new factory mean profits before tax last year at just over £4m were down slightly on the two previous years, although substantially higher than five years ago. Tin-plate costs have increased as hard-pressed households buy more canned products, while the price of tripe, still one of the main raw materials in Butcher's, is rising steadily. "Far more now goes for human consumption, to eastern Europe and to China," he explains. But tripe is still what sets the brand apart. And, as Mr Baker puts it, "dogs love it."