Premier snaps up Quorn manufacturer for £172m

Premier Foods is to acquire Marlow Foods Holdings, owner of the mycoprotein-based meat alternative Quorn, for £172m from Montagu Private Equity,...

Premier Foods is to acquire Marlow Foods Holdings, owner of the mycoprotein-based meat alternative Quorn, for £172m from Montagu Private Equity, which bought the company back in May 2003.

The acquisition increases Premier’s branded sales mix from 57% to 61%. While the UK represents 75% of Quorn sales - where it claimed a 60% share of the £155m meat alternative category and a 15% share of the broader £640m meat-free category - about 21% is exported to Sweden, Switzerland, Belgium and Holland.

It also claimed to be the number two meat alternative brand in the US natural foods sector. However, Quorn has come under attack from the pressure group US Center for Science in the Public Interest (CSPI) claiming that it is potentially allergenic and “dangerous to sensitive individuals”. The CSPI receives funding primarily from subscriptions to its Nutrition Action Healthletter.

Launched in the UK in 1994, Quorn sales have grown 7% annually over the past five years, reaching £79m at December 31 2004. Marlow Foods now offers a range of Quorn branded products, ranging from burgers, sausages and escalopes through to cottage pies and lasagne.

Marlow Foods will continue to be run by its existing management team, led by md Nick Hughes. However, it will benefit from access to Premier’s more powerful sourcing and routes to market and its more developed presence in the foodservice channel. Marlow operates out of two sites in the UK: Stokesley in North Yorkshire and Belasis in Teesside and employs 360 people.

Premier plans to increase brand investment and will operate Marlow as a stand-alone unit. Costs savings of around £4m a year are expected by 2008.

Premier chief executive Robert Schofield said: “This is a fantastic acquisition for Premier Foods. Quorn’s strong brand recognition and leading category positions immediately provide Premier with a very strong branded position in an exciting growth market … As well as being by far the largest brand in its category, it will be the largest brand in our portfolio.”