PERCY Fudge would be hard pressed to recognise the business he set up in the 1920s.

Back then he baked his wholesome daily bread and sold it from the back of a cart to the local community.

These days the company he founded in 1926 has a multi-million pound turnover and has dispensed with bread, concentrating instead on quality sweet and savoury biscuits and cakes.

These can be found on the shelves of delicatessens and all the major supermarkets, in the food halls of high-end stores such as Harrods and on the tables of Royal residences throughout the land. Indeed, Prince Charles sends a posse of staff to the factory in the run-up to Christmas so they can wrap Highgrove ribbons around Christmas cakes to send out to his friends, while ribbon has already been sourced for the Buckingham Palace Twelfth Night cake.

An award-winner since its early days, Fudge’s is still reeling in accolades not just for its products but also for its business acumen.

This year the company has been named Speciality Food Producer of the Year at the Great Taste awards and it has also been hailed as the best ‘third generation family business’. Meanwhile its jalapeno wafers, white chocolate and cranberry biscuits and Marmite flatbreads are Taste of the West and Great Taste winners.

At the outset, the company was based in Leigh, near Sherborne. Like every other village bakery, it serviced the community and outlying farms and tried to stay afloat at a time when every village had its own baker and the depression was affecting all levels of society.

“There was a time when every house baked its own bread, but then people started taking their dough to one house and these became the village bakery,” said Steve Fudge, Percy’s grandson and the current managing director of Fudge’s.

“When my grandfather started, they used to bake through the night and get the bread out in the horse and cart as early as possible the next morning, aiming to sell as much as they could.

“Each village had its own bakery and they had a gentleman’s agreement not to poach customers from each other’s patch – although I’m not sure how strictly they kept to it!”

As with so many other genteel business practises, gentlemen’s agreements have long since gone by the board, with Fudge’s products now having to fight for elbowroom on supermarket shelves alongside the big boys of the biscuit industry, McVities and Jacobs.

But the company is more than holding its own. All the ‘multiples’ – Tesco, Sainsbury’s, Morrisons etc – stock their produce, as do prestige stores such as Fortnum and Masons and independent delis and farm shops throughout the country.

Fudge’s biscuits are also sold all over the world in countries as diverse as America, Denmark and Sweden, Vietnam, the Caiman Islands and the United Arab Emirates.

The company has a turnover of £8 million and has virtually outgrown its Stalbridge premises. Inside the Willy Wonka-ish factory, with its mouth-watering, pervasive baking smells, the staff work alongside advanced machines designed to roll, shape, mark and bake thousands of cakes and biscuits every day.

The Christmas drive is well underway, with boxes of tree-shaped chocolate biscuits and mini mince pies stacked roof-high and ready for dispersal. The bulk of the festive baking has already been done and what takes place over the next few weeks will simply be to top up stores where customer demand has outstripped supplies.

In recent years many bakeries have moved their business to the Czech Republic and Poland, but Fudge’s has refused to follow that trend because they see themselves as ‘a quintessential British brand with a Dorset bias’.

Steve Fudge did not initially plan to be a part of the family business. His passion is sweets and he trained as a confectioner in Germany before returning to the UK, where he worked as a lecturer in London and at Salisbury College.

But when colleges started to rank IT over traditional skills in the 1980s, Steve realised the peril of his position. He decided to return to the family fold, which by now was struggling badly in the face of mass-produced sliced bread, the collapse of the farming industry and a decline in the amount of bread bought by the public.

“I decided to go back to the company and steer it somewhere different,” he explained. “We had to produce a high quality product that you could transport and that reflected Dorset.”

The company started making savoury biscuits using local butter, cream and cheese – and also started looking for new premises.

Towards the end of the 1990s Fudge’s moved from Leigh to Stalbridge. Their new premises were formerly owned by the town’s Dikes bakery – another firm that grew from humble beginnings – and production reached new heights.

“We went from having a staff of six and turnover of £180,000 to a staff of 120 and turning over £3 million,” said Steve.

“Of course I had ideas of continuing with the bread making side of the business, but within two-and-a-half years that stopped. I got rid of 14 vans and concentrated solely on biscuits and we came into profit.”

Fudge’s niche products include the hugely popular Cerne Giant biscuit, large shortbread circles depicting Dorset’s well-endowed chalk figure.

“We have about 100 lines, but I am very fond of the giant,” smiled Steve. “It has that local edge that makes us special. We can handle that as well as the wider business and that makes me happy.”