Greencore invests in new product development
Speaking as the convenience food manufacturer published its interim results, Williams told FoodManufacture.co.uk: “We are seeing increased interest from customers in our prepared meals division on where they can get longer shelf-life without the loss of quality or flavour.
“We are making a fair amount of investment in that area, both around packaging and processing. We use a high pressure steam vessel and specific packaging to get a longer life from products.
“We have also reformulated recipes and the way we cook products so we are able to get a better taste profile and longer shelf-life.”
Hot eats
Hot eats would also be a big focus for Greencore’s new product development (NPD) during the rest of the year, he added. “When you buy a sandwich in a grocery retail outlet it invariably will be chilled. We’re trying to work with retailers on how to help them deliver hot sandwich and snack products.”
Greencore said it remained focused on food-to-go, which represents 40% of its trade in the form of sandwiches, sushi and salads, as that was where it saw the most lucrative business opportunities. The company achieved 7% UK sales growth in that division in the period.
Reporting on its interim results, Greencore flagged up first-half, multi-million pound capital investments in the initial phase of its UK Northampton sandwich factory, now completed, and its US Rhode Island plant – also now finished. Phase two at Northampton, construction of a new production facility adjacent to the existing site, was now well underway, it said.
Half of the company’s first-half £43.7M capital expenditure had been spent on those two sites, with the remaining cash largely covering US and UK maintenance work, Williams said.
It had resolved supply chain disruption at its US Jacksonville site and now continued to boost production there, Greencore added.
Next build
“Our next build is on the US West Coast, a smaller scale facility half the cost of Rhode Island in the Seattle area,” added Williams.
FoodManufacture.co.uk understands that plant will predominantly serve Starbucks, one of Greencore’s two major US customers, and will be operational from spring or early summer 2016. The Northampton site is expected to be fully functional at roughly the same time.
Other work was being done in collaboration with major retail customers to take costs out of the supply chain, for example through better forecasting and ordering, said Williams.
In results for the 26 weeks to March 27, Greencore reported group revenue of £639.8M, up 3.9% on a like-for-like basis. Adjusted pre-tax profit rose by 9.2% compared to the same period last year, from £37.2M to £40.1M.
Chilled prepared meals
Sales of chilled prepared meals, comprising ready meals, quiche, soup and sauces, grew by 2.4%, with the best performance in Italian ready meals. However, quiche sales were hit by one customer bringing quiche production in-house in 2014.
Like-for-like revenue in Greencore’s grocery division declined 2.1%, driven by the loss of some seasonal cake business.
“The group delivered good financial and strategic progress in the first half of the year,” said ceo Patrick Coveney.
“Our strategy of deepening our leadership, capability, capacity footprint and customer partnerships in the UK and US food-to-go markets continues to deliver growth, with like-for-like revenue in that part of our business up 8.7%.
“We carry good momentum into the second half and remain confident in our ability to deliver adjusted [earnings] growth for the year in line with market expectations.”
