Uniq invests £10M in desserts business

By Elaine Watson

- Last updated on GMT

Related tags: Lean manufacturing, Investment

Uniq is pumping more than £10M into its desserts factories this year as it embarks on a mission to “reinvigorate” the category.

It has also opened a new production unit at its Northampton sandwich factory and invested in factory data capture systems that have delivered “significant quality benefits​”.

Uniq chief executive Geoff Eaton said he would be making a “significant investment​” in the chocolate desserts facility at Minsterley this year to produce Cadbury products as well as new own-label products for the supermarkets. The extra capacity would facilitate “increased promotional activity​” and help drive volumes essential to improved profitability, he said.

Investment of more than £10M in capital equipment over the next year will create the flexibility, value for money and formats most relevant to consumers, driven by the new and improved product ranges for 2010 created by our new commercial and development teams. We believe this will enable us to reinvigorate the sector of the desserts market we serve.”

The firm had also reduced raw materials costs by changing from a fixed price milk contract and “locking in price falls early in 2009​”, added Eaton. It had also helped to offset higher cream, butter, bacon and egg prices by using ‘smart procurement’ methods.

While sales of desserts had dipped slightly in 2009 (down 1.4% to £150.3M), losses had reduced significantly from £8.2M to £2.9M, as the firm reaped the benefits of lean manufacturing techniques, got a better control of costs and waste, cut its energy use and reduced the amount of waste sent to landfill, he said.

Food to go

Sales in the food to go business fell 3.7% in the first half of the year, but “rallied​” by 7.9% in the second half as Uniq adapted ranges to changing demand and picked up new business, he said. “Overall, sales rose 2% last year to £136.9M, with profits growing by 5.8% to £7.3M.”

However, Uniq was badly hit by British Airways’ decision to reduce its catering provision on short-haul flights, said Eaton: “Supplair, our customer, lost sales, which resulted in an annualised loss of sales for us of £8.2M.”

As the major beneficiary of Marks & Spencer’s decision to consolidate its sandwich suppliers from three to two, Uniq’s Northampton factory now had a 65% share of M&S’s sandwich business and had gained an additional £15M in new orders on an annualised basis, said Eaton.

The salad factory in Spalding also scooped £12M of new business (on an annualised basis) with the Co-operative Group, and relaunched almost half of its dressed salads range to reduce salt and clean up labels. Equipment refurbishment also delivered significant cost savings and improved manufacturing processes, he said. “This has put the site in a good position to start 2010 with the newly won volumes and benefit from increased investment in capital in a warehouse extension.”

Financial results

Uniq posted a £4.4M trading profit in the UK in the year to December 31, 2009, compared to a loss of £1.3M in 2008. However, the group overall posted an £18.5M loss before tax from continuing operations “significantly impacted by £11.3m of pension related finance expense”.

Group sales in the first quarter of 2010 were up 4.2% compared to the first quarter of 2009. Food to go sales grew by 12.5%, while desserts sales were down 2.2% “reflecting promotional phasing​”.

Related topics: Chilled foods, Dairy, Fresh produce

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