Acquisitions drive growth at Inter Link

Related tags Inter link Cakes New product development Malt

The acquisition of the Soreen malt loaf business, and a continued
focus on new product development, have helped Inter Link Foods
become one of the fastest-growing companies in the UK cake market.

A number of strategic acquisitions over the last few years have helped Inter Link Foods​, the British bakery group, to double-digit gains in both sales and profits for 2003.

The company, which supplies all the leading UK supermarket groups with own label, branded and licensed cakes and pastry products, has reported a 12 per cent increase in turnover to £51.4 million (€74.7m) for the year to 30 April, while pre-tax profits rose 10 per cent to £3 million.

The increase in sales was attributed to the steady pace of expansion at Inter Link, which has acquired a number of businesses in the last two years. Hepworth & Whittles, a manufacturer of small cakes, was acquired in January 2001, while the Cakes for the Connoisseur brand and business was bought just a month later.

In March 2001, Inter Link announced the acquisition of The Creative Cake Company, which manufactures celebration cakes with licensed characters such as Bob the Builder, Spiderman and Harry Potter. In June 2001, Inter Link took control of William Lusty, which sells a range of layer and fruit cakes to major multiple retailers in the UK, while February this year saw the group complete the acquisition of the Soreen Malt Loaf business from Warburtons, its largest acquisition to date.

But while acquisitions remain a core element of the company's strategy, it has also continued to drive the pace of new product development. In 2002, sales within the UK cake market were around £1.76 billion, according to Mintel data cited by the company, with innovation and the demand for premium quality products driving the growth.

Own label products accounted for 37 per cent of the market in 2001, reflecting the impact of the grocery multiples in this sector, Inter Link said. Sales of both own label and branded cakes will continue to show steady growth up to 2006, with the market passing the £2 billion mark for the first time, according to the Mintel data.

The growth in snacking and eating away from the home has also opened up new distribution channels with 'eat now' products being sold through convenience stores and petrol forecourts. 'Healthy eating' and children's products represent further opportunities, and the development of these new sectors should help to sustain positive growth within the market, even in the event of a slowdown in the general economy.

Inter Link is well aware of the opportunities to be found in these growth markets. "We recently began to extend the Soreen malt loaf brand into the snacking area, a market that Inter Link has been targeting across the group,"​ said Inter Link's chairman Jeremy Hamer."We will continue to support this initiative fully, particularly as this segment of the overall market is showing exciting growth opportunities."

With Soreen giving it a foothold in the branded cake market for the first time, Inter Link is in an extremely strong position to build sales in the current year. It now supplies all the leading multiple grocers in the UK, and with its continued emphasis on acquisitions and product development it should be able to achieve its goal of becoming the second-largest cake supplier in the UK.

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