Quality product at ‘least cost is the key to success’

By Rick Pendrous

- Last updated on GMT

Related tags: Cost, Chief executive

Large own-label manufacturers are under greater pressure to improve their operational efficiency and drive down costs than small branded and specialist producers, which are able to demand higher margins, according to delegates at Food Manufacture's business leaders' round table debate.

For Samworth Brothers, it is all about being a high-quality, low-cost producer, said chief executive Brian Stein, one of more than 20 mds and chief executives seated around the table at this year's debate​. "If you are not producing quality product that is least cost you are not in the game,"​ said Stein.

"So you need to be driving least cost all the time to be successful as a big player."

It was a view supported by Ian Blackburn, chief executive of chocolate confectioner Zetar. "At the end of the day we have all got to be low-cost producers,"​ he remarked. Around 25% of Zetar's capital expenditure is devoted to making efficiency gains.

For smaller firms 'brand values' are more important drivers than operational efficiency. Patrick O'Flaherty, md of RDA Organics, saw innovation as the main driver for growth. Peter Farquhar, md of Dorset Cereals, remarked: "We could make our manufacturing business more efficient But there are areas we actually build in cost because it adds to the brand values. And you should be able to get that back in the price you charge."

Click here​ for more coverage of the debate, which was sponsored by Eversheds, lean consultancy KM&T and foreign exchange specialist World First UK.

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