Our stock is soaring
The economic downturn, a team ‘rationalisation’ and the horsemeat crisis suggest it should have been a tricky few years for Tipton-based BHJ Ingredients UK.
And while director Richard Parnell willingly concedes there have been “challenges” for the animal protein ingredients manufacturer, his 10 years at the firm have coincided with steady sales and volume growth, with more forecast for the year ahead.
A key reason for the firm’s sustained success it that, at its core, it has a number of tried, tested and trusted ingredients that have built up an enviable reputation over decades.
The biggest-selling product out of the UK operation’s West Midlands base is Drinde: a dry pork protein derived from the rind that is added to meat products such as sausages, burgers and pies.
“This has been our branded product in the UK for about 40 years and we'll make about 2,500t of that in the UK this year,” says Parnell.
“We have a beef protein product also made on this site and then stocks that are processed in Sweden, which are of all the species – beef, chicken, lamb and pork – and they are available in liquid and powder form for use in ready meals, sauces, gravies and other bases.”
Meat into meat (Return to top)
In relation to Drinde, the firm takes the pork rind and processes it to dry off the fat and moisture to create a dry protein product that is then able to bind water and fat when used in a meat product.
“You are adding a meat product, back into a meat product,” says Parnell.
“Drinde is low fat, functional and it costs less than other meat ingredients that could be used. Also, because it is able to bind fat and water more efficiently than other products can, you get a lot of benefits in terms of consistency and slicing because it is a permanent bond.”
While Drinde continues to sell well, Parnell also gives credit to the company's global management for giving him the remit to run the UK activity as he sees fit.
BHJ was originally a Danish-owned outfit, until it was bought by the US firm LGI six years ago. However, the company's management is still based in Denmark, with Parnell reporting directly to the company chief executive.
“We are very much trusted to run the business here, which is very refreshing,” he says.
“If I have an idea I'm allowed to get on and do it and, if it works, I get a ‘well done’, if it doesn't, I'm told not to make the same mistake again! It's a great way to be able to work.”
Today, BHJ Ingredients UK serves multiple customers from the big food manufacturing groups right down to people who will buy single bags of products.
Alongside the Tipton site – which will trade about 5,000t of product this year – there are two factories in Denmark and a stock plant based in Sweden.
Last year the UK operation was “rationalised”, with Parnell overseeing changes to shift patterns, working practices and the inevitable “small number” of redundancies.
While that process “hurt”, Parnell says the firm is now reaping the benefits.
“Everybody took a hit but we are coming through that now and we are much more productive and efficient than we were. Five years ago this plant ran very differently. We can now get more through in less time and still meet the standards.”
While the recession impacted on the business, especially in terms of rising raw material prices, it also seems to have opened some doors and strengthened existing relationships because Parnell refused to pass the entire cost increase on to customers.
“We’re now coming out of that cost peak and hopefully starting to show the benefits of supporting our customers through that,” says Parnell, adding that the company’s “value offerings” were also nicely suited to food and drink manufacturers who were looking to reduce costs while maintaining quality.
Cost-efficiency (Return to top)
“When it comes to cost-efficiency, it isn’t always about making a product for 1p per kilo or less,” he adds.
“For example, our products help improve the yield from slicing, which is clearly a cost benefit. If you take a ham product and add our leg Drinde to it, the slice yield will go up. If you can save 1% on wastage, that's a lot of money. Likewise, if you can increase throughput by making a sausage mix more consistent, you will save money. One of the benefits of using BHJ Ingredients' products is that you will reduce variability in quality across the board and will always do so.”
However, these practical benefits mean that deals with customers are very much a “technical sale” – something that suits Parnell down to the ground.
Being “technically biased” himself with a background in the poultry industry – including Bernard Matthews and a company that was later absorbed into Solae –means he and his team are more than happy to roll their sleeves up and demonstrate their products’ capabilities.
“This is a very traditional industry in many regards because customers will often say to us: ‘I hear what you’re saying but show us it works.’ It’s only when you get your boots on and get into the factory and make a sausage, a burger or a pie with them and prove it works that the sale is possible,” he says.
“We are very fortunate to have maintained a high level of technical ability amongst our sales operation and we have actually reinforced it too. Being able to talk to a customer about formulation, equipment and process operations is crucial. It is very much a technical sale.”
While some of those sales dropped off in the wake of the horsemeat scandal, especially when it came to their stocks products, which are targeted at the ready meal sector, Parnell says sales of pork proteins were unaffected, while the beef products dipped only slightly.
To counter-balance this, however, the firm has been branching out into new areas and securing success in new markets.
“We are now bringing in other products [to our core offering], so we might take a Drinde or a beef protein product and add in perhaps one, two or three other ingredients to provide a synergistic benefit such as a flavour compound or extra water binding capacity.
"One that is proving to be successful at the moment is our Scanpro product, which is a blend of our beef protein and one or two other ingredients for kebab products. These help keep the kebab’s shape, improve its form and aid slicing. It’s a surprising industry, you'd be surprised how much of it is eaten on a Friday night, but it is also quite a high-quality product, especially in its traditional communities.”
British quality assurance (Return to top)
The biggest achievement for the company over the past five years has been securing British Quality Assurance accreditation for its pork products, which means that its customers can promote a product’s 100% British pork credentials.
"That probably accounts for 35% of our sales, because there is so much interest in this at the point-of-sale,” Parnell says.
Looking ahead, his priorities are to develop the stocks business – in which he sees “huge potential” – maintain the manufacturing efficiencies which have been developed and ensure the customer is at the heart of operations.
“I like to think the 10 years I have been here have been a success story. Revenue and volumes have increased significantly and we will grow again this year,” he says.
“We’re not the biggest player but we are very good at what we do. We are very organised, very efficient and are often complimented for the way we operate as a business. We are driven, and will continue to be driven, by providing high levels of customer service.”
