'Strong start' to 2011 sees RGFC launch new Whitworth sugar lines
The RGFC saw turnover dip to £200.1m (£215m: 2009), although pre-tax profits for the year ending December 2010 rose slightly to £2.34m; however, in a statement to shareholders today chairman Pieter Totté reported on a "strong start to the current financial year throughout all our businesses".
Sugar procurement
RGFC’s Napier Brown business sources sugar worldwide to supply industrial, retail and foodservice customers, and Totté said that record sugar prices after the EU Sugar Regime ended in October had prompted the firm to secure new supply sources.
In March, Totté said that tight EU and world supplies worsened by crop problems continuing into 2011/12 meant that Napier Brown would increase multiple sourcing, especially from abroad given cuts in UK cane refining and beet crop issues.
Within its retail division Napier Brown will also launch a new range of speciality Whitworth sugars. "These will be sold through a wide range of retail outlets in the UK and we are confident that they will dramatically enhance the Whitworth brand," Totté said.
Totté emphasised that sweet bakery division Haydens’ – which sells chilled and ambient premium patisserie and desserts to retail and foodservice – progress against a ‘recovery plan’ implemented last year, with the “management team fully established and the strategic direction clear”.
Haydens expansion
RGFC finance director Mike Mcdonough told FoodManufacture.co.uk that an £800,000 plan to relocate Haydens’ distribution operation to a purpose-built 30,000 sq ft facility close to the bakery in Devizes was completed in May, and had increased picking capacity by 40%.
Mcdonough added that the Haydens business, acquired in 2003, currently deals with around 120 stock-keeping units (SKUs) a day for Waitrose and M&S. "It's had no problem growing sales, but it's struggled for profits," he said, adding that current divisional Earnings Before Interest, Tax, Depreciation and Amotisation (EBITDA) was in the "few thousands", with the main cause identified as production inefficiencies.
"The downside of the number of SKUs and the focus on quality [with products hand-crafted] is that the production process is very labour intensive and stop-start, so processes aren't that efficient. So we've identified the need to upgrade over a period of time," Mcdonough said.
He added that RGFC was taking a "slow burn" approach to upgrades, given that Haydens makes short shelf-life and chilled products, which meant the company couldn't build up a sufficient stock backlog that would allow them to effect all the desired improvements at once.
However, Mcdonough said the distribution relocation had freed up 10,000 sq ft of space in the factory. "Within the next 6-8 weeks we're looking to replace one process line, and we've got some Swiss kit coming in. Then we've identified around six key factory processes that we're looking to pick through and upgrade."
Strong innovation demand
Meanwhile, Totté told the AGM thatHaydens “sales continue to perform ahead of last year”, with strong demand for the innovation apparent amongst customers, “further highlighted by the success of the Royal Trifle produced for [main customer] Waitrose from a Heston Blumenthal recipe”.
As RGFC's "star performer" during 2010, bakery ingredients business Renshaw grew due to increased UK home baking demand. As a result, Totté will announce the launch of 47 new Renshaw branded products in the UK over the next few weeks, adding that the division also plans to build upon export sales growth during 2010 (particularly in the US).
“Based on our trading performance during the first five months of the current financial period, and my confidence that we can sustain this progress through our international sourcing skills in the sugar market, forthcoming brand launches and the benefits of plant reorganisation work at Haydens,” Totté will say, "I believe the group is on course to significantly exceed current market forecasts for this year."
