Real growth lies in retail, says Lees Foods boss

By Ben Bouckley

- Last updated on GMT

Related tags: New product development

Real growth lies in retail, says Lees Foods boss
Despite his firm's successful push to boost foodservice sales over the past year, Lees Foods ceo Clive Miquel believes the retail sector is where the “real growth lies” , as the company looks to extend its brands into complementary product areas.

Miquel (pictured) was speaking to FoodManufacture.co.uk following the release of Lees' full-year results to the City this week. Lees posted sales of £18.65m for the year to December 31 2009 (£18.19m, 2009) and pre-tax profits up 22% to £1.03m.

Lees Foods plc is the parent company of Coatbridge-based Lees of Scotland (confectionery, meringue products) and the Waverly Bakery in Glasgow (ice cream cones and wafers).

Miquel said: “A large part of our business is still on the retail side, but we’ve grown foodservice sales. Not necessarily to new, but existing customers.”

He added that he thought the firm had “perhaps benefited from restaurants and bars deskilling during the recession, tending to buy, say, meringues in, rather than make them in house”.

Cut-throat environment

Miquel said foodservice margins were slightly better than in retail, where promotions hit returns, but he added that in a cut-throat business environment “foodservice people can be as aggressive as retail buyers”.

While Lees had successfully achieved "targeted priceincreases"​ to customers across its Lees and Waverly ranges, Miquel said promotions were vital on the retail side of operations, which is where he saw real growth potential given quick product turnaround.

“Consumers are looking for value, and will readily switch when an offer is at hand. We need a balance between promotions and standard sales, but of course the hope is that someone will try your product on promotion, like it and buy it again.”

During the first quarter of 2011 the firm completed a £300,000 investment in a new depositor to increase the efficiency of its meringue production at the Lees of Scotland facility, Miquel said, while it had also automated the process taking pans from the pan wash to the depositor.

Brands and NPD

While Miquel declined to reveal a turnover target, he said Lees had had a “good couple of years, especially the last year. We’re operating in a very challenging environment and there is little we can do to combat commodity and packaging price rises and other world influences”.

Going forward, and with brands obviously achieving better margins than private label, Miquel said Lees was also exploring the possibility of extending their reach into “complementary”​ product areas, while new product development (NPD) generally remained a key focus.

Miquel said: “We are increasing our focus on developing the Lees brand. We sucessfully launched Lees Mallow Dreams earlier this year, the first new branded product for some time.”

Related topics: Ambient foods, Bakery, Confectionery

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