IAWS cornering specialist in-store bakery
focus on supplying in-store bakeries across the UK as the company
announces a strong profit rise, increasingly driven by canny
acquisitions and joint ventures abroad, writes Chris Mercer.
IAWS recently launched a new advertising campaign aimed at consolidating its Cuisine de France brand as the top supplier of par-baked and frozen bakery products to a growing number of in-store bakeries in the country.
"There is significant investment going into this market segment through upgrading of stores and investment in the in-store bakery category," said IAWS at the same time as announcing a 15 per cent UK sales rise for the six months up the end of last year.
Supermarket in-store bakeries provide around 16 per cent of Britain's bread and a spokesperson for IAWS said the group expected retailers to build more facilities in 2005 as consumer demand grows for fresh bread and particularly French-style baguettes.
Many of the major supermarkets, including Sainsbury's, the Co-op and Tesco now have facilities to 'bake off' par-baked goods, especially in their smaller town centre stores where space to bake from scratch is limited.
Thanks to this, IAWS' Cuisine de France has already helped to transform the company from an agriculture-nutrition firm to a predominantly foodservice supplier over the last few years.
But, the group also now has extra impetus from a variety of joint ventures and associates, which make up 29 per cent IAWS' total operating profit and offer the firm opportunities in the specialist bakery sector on both sides of the Atlantic.
These include a 22 per cent stake in speciality Swiss baker Hiestand, which recently announced a 20 per cent sales rise in 2004, and joint venture with the Tim Hortons café chain in North America, which posted an average same-store sales rise of 8.6 per cent last year. IAWS is also expanding production at its La Brea artisan bread business in the US.
Together, these businesses have helped IAWS to an interim nine per cent sales rise to €653 million in its 2005 first half. The group also achieved a 55 per cent increase in net profit to €31.4 million for the same period; thanks partially to restructuring work in the UK and the merging of La Brea and Cuisine de France in the US.
The company is now placing a big emphasis on its acquisition of French specialist bakery and confectionery supplier, Groupe Hubert, last December.
Hubert's flagship brand, Coup de Pates, has doubled sales to €111 million since 1999 and an IAWS spokesperson said the firm was especially excited about Hubert's strong reputation for pioneering new par-baked premium and value-added products, including a variety of patisseries and breads, which can be distributed all over France.
Hubert currently offers around 60 new products every year and IAWS said it was hopeful of benefiting from this across its international foodservice business. Details of specific up-coming products were, however, unavailable.
IAWS chief executive Owen Killian said the Hubert acquisition put his firm's products in more than 50,000 outlets across the UK, Ireland, France and North America. And with the company's other brands, such as Delice de France and Cuisine de France, its specialist bakery and confectionery sector is now worth €670 million.
