Simon Richardson, commercial manager at The Real Good Food Company-owned Haydens Bakery, said the company relied on too few large contracts and could have risked similar problems to Avana Bakeries, which suffered after losing a major contract with Marks & Spencer.
There now seems to be some hope for Avana, following its sale to Food Utopia Ltd as a going concern, having previously looked like it was headed for closure. But Richardson told FoodManufacture.co.uk he wanted to avoid similar choppy waters.
“Avana Bakeries was an example that we looked on with some concern, as in the past we had run a similar business model to theirs,” he said.
“From a customer’s perspective, we’ve had to devise a strategy that wouldn’t leave us in that position."
Part of the business’s restructure saw Richardson’s appointment last year, as well as a new operations director and plans to move trade into a multichannel operation.
‘Not focusing exclusively on one area’
“We’re focusing on all areas, including retail, foodservice and distributors,” he said. “We’re not focusing exclusively on one or the other.
“We have got a retail business at the moment, but there’s huge potential and interest from the foodservice sector."
Haydens Bakery, which posted pre-tax profits of £917,000 and sales increases of 7.6% on last year, recently secured a “sizeable” contract with Morrisons to supply desserts and pastry products, he said.
The company has had a long-standing contract to supply Waitrose with pastries and desserts too and has another contract with Costa Coffee. Richardson refused to disclose details about the value of the contracts.
However, he did say the company was at an “advanced stage” to supply pastries and desserts to three other companies, which were both foodservice and retail.
“I can’t disclose who they are, but it’s split between foodservice and retail,” he said. “They have the potential to be worth millions of pounds each.”
More than £7M investment
More than £7M has been invested in Haydens Bakery’s Devizes, Wiltshire-based, facilities over the past three years, he added.
Much of the investment was pumped into new machinery and production lines to allow Haydens Bakeries to up its output.
The company had also slimmed its product line down from 10 products to six, revealed Richardson.
“It frees up our resources more,” he said. “We’re walking away from large cakes and fresh cream products and focusing on other areas.
“We would have had to invest huge amounts of money to bring ourselves above our competitors in the areas we’ve dropped."
Although Richardson could not break the output of products down by specific areas, he said the site produced more than 35M baked and pastry products a year.
Haydens’s 5,109m² facility was built at the Real Good Food Company’s Devizes site to provide the company with a base to develop 40 new bakery products.
In the same year, Haydens Bakery announced it would create 150 new jobs after relationships with Marks & Spencer, Waitrose and Costa Coffee had strengthened.