Big Interview

Ex Rachel's boss unveils plan to get Loseley ice cream into a freezer cabinet near you

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Burchell: Man on a mission
Burchell: Man on a mission

Related tags: Ice cream, Ice cream maker, Brand

With sales at Loseley Dairy Ice Cream up a cool 36% in 2010, the Cwmbran-based ice cream maker has certainly had a better year than a lot of other firms competing for space in the nation's freezer cabinets, but its best is yet to come, new md Neil Burchell tells Elaine Watson.

Its ill-fated Hill Station ice cream brand might be consigned to the dustbin of history, but mid-market brand Thayers and its posher stablemate Loseley have huge potential, says Burchell​.

"Currently, it's fair to say that branded sales here are pretty modest - a significant part of the business is still own-label - but I am a branded person. That's my main motivation for joining this company and that's the main reason why they asked me to join them."

Thayers, which has listings in Sainsbury's, Tesco, Asda and the independent retail sector is an "everyday, feel-good brand",​ while Loseley - listed in Asda, the Co-operative and the independent trade - is "premium, but not super-premium", ​adds Burchell, who was poached from organic yogurt maker Rachel's to work his magic on Loseley last November.

"We also have Granelli as more of a price-fighter brand, which is really strong in the North West."

While these brands already have a modest presence in the UK's biggest supermarket chains, Burchell's mission is to increase this - massively - he says.

"I'm in negotiations with all of the main retailers about our brands. In three years' time I'd like Loseley to be seen as a branded company."

Own-label

While slogging it out with the likes of R&R, Fredericks and Frank's Ice Cream to produce own-label ice cream for Iceland, Morrisons et al might not therefore be his long-term goal, own-label products still account for the bulk of volumes going through the Cwmbran factory right now, and must not only earn their place in his customers' freezer cabinets, but pay for themselves, he stresses.

"We're pretty broad-based, producing value lines, soft scoop, Cornish, Neopolitan, oval tubs and super premium tubs for retailers. But I don't believe in just producing for producing's sake. I absolutely believe that each line we make must be profitable."

Suicidal discounting

But the suidical discounting in evidence in recent months as retailers try to keep a lid on inflation and manufacturers resort to ever more margin-crushing madness to retain market share can be dispiriting for people that have spent their careers building brands, admits Burchell.

"Some of the premium brands in ice cream are indulging in some very very aggressive promotional activity and the fear I have is that it will drive the ice cream market into the same position as the cheese market. That's very damaging and I do question whether it is prudent."

On the plus side however, the UK ice cream market is still in growth, and while premium or discretionary items (we don’t need luxury ice cream) are arguably more vulnerable than staple goods in a recession, the UK’s cash-strapped punters are still prepared to cough up for a tub of premium ice cream after a bad week at work, says Burchell.

"Ice cream is a feel good product. People want to treat themselves."

£5m investment

Loseley's private equity backer Acuity Capital has also been willing to put its money where its mouth is, investing £5m in the business since acquiring it from administrators in late 2008, enabling the firm to improve its operational efficiency and capabilities and invest in an image overhaul for the Loseley brand plus tweaks to recipes to make it "richer and creamier",​ says Burchell.

Cash has also been spent on new product development, with the recent launch of a new range of booze-infused ice cream​ tubs under the Loseley brand including cognac, whisky and Irish cream flavours, says Burchell.

Turbulent past

Set up by investment bankers Charles and Gina Hall in the 1990s, Loseley (formerly known as Hill Station) became the UK’s third-largest ice cream business in 2006 after striking a £5.6m reverse takeover deal to acquire Loseley Dairy Ice Cream (based in Cwmbran) and Granelli McDermott (which had factories in Tattenhall and Cheadle).

All production was then gradually consolidated into Loseley's Cwmbran factory.

However, the AIM-listed company was hamstrung by cash-flow problems and eventually called in the administrators in October 2008. It was then acquired by Acuity Capital.

The Cwmbran factory has the capability to produce a wide range of tubs, yogurts, sorbets and impulse products such as choc ices and lollies.

Related topics: Dairy, Frozen, People & Skills

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