McCain Foods, which employs about 1,000 people in the Scarborough area, has announced plans to switch production at part of its Cayton site from baking and topping pizzas to baking potatoes.
A statement issued by the firm last week (June 1) said the proposal was a result of declining pizza sales. It said demand for its recently introduced Ready Baked Jacket Potatoes remained strong.
The move could involve significant financial investment from the company to convert the current prepared foods facility, which is alongside the main frozen chip production site.
“The scale of work required means decommissioning the current unit and extensive installation of new equipment in this part of the site,” said McCain manufacturing director Alan Bridges.
“As a result, we have met employees and made preparations for a period of consultation because, regrettably, up to 40 jobs may be at risk of redundancy. The exact number will become clearer once the consultation takes place and all options for suitable alternative employment have been fully explored.”
McCain said that, despite its best efforts, it had continued to experience declining volumes in an increasingly competitive market place and this trend meant that in-house pizza production was no longer financially viable.
“At the same time, demand for our new Ready Baked Jacket Potatoes is growing, so we want to move quickly and seize the opportunities this presents for growth and future jobs,” said Bridges. “This new production facility would be in addition to one already operating very successfully in the West Midlands.
“We fully appreciate that the uncertainty caused by this proposal will be unsettling for those potentially affected, so our focus is on open communication. Throughout the coming consultation process, we will continue to treat all employees with fairness and respect.”
Meanwhile, market research firm Mintel reported sales in the UK take home pizza market up by 22% to reach £825M between 2006 and last year.
“Growth was driven by a combination of factors, however, at core was the expansion of own-label, increased promotional activity and the position of pizza as a relatively low-priced family friendly food,” said Mintel.