Real Good Food Company tackles sugar woes

By Rod Addy

- Last updated on GMT

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Totte: 'Strategy now beginning to bear fruit'
Totte: 'Strategy now beginning to bear fruit'
Napier Brown’s Immingham sugar plant is ready for commissioning and should help the firm offset the negative impact of plunging sugar prices, according to owner Real Good Food Company (RGFC).

Issuing its third quarter trading statement, covering the three months to December 31 (Q3), RGFC said: “Commissioning of the new site at Immingham​ is virtually complete and will enable the business to utilise new sources of sugar more cost effectively which is critical to our future business model. 

“Trading has inevitably been impacted by the reduction in sugar prices, but we are confident that the steps we have taken to mitigate against this will restore margins to previous levels during 2014.”​ 

Sales at Napier Brown had increased significantly through industrial and retail channels, reported RGFC. The business had won new listings for its Whitworths sugar brand and utilisation of its Normanton packing facility had increased considerably, it said. 

Management restructure​ 

Its Garrett Ingredients division had been hit by the instability in the sugar market and challenging trading conditions for dairy ingredients. However, RGFC said a recent management restructure at the subsidiary had put it in a good position for future growth. 

The firm stated that three of its businesses, Renshaw; preserves, coatings and sauces company R&W Scott; and Haydens bakery, recorded Q3 pre-tax profit growth, compared to the same period in 2012. 

Ingredients firm Renshaw was poised for export growth, with products launched in the US and production now live in Brussels, and had achieved growth in UK retail sales, said RGFC. R&W Scott was poised to launch various added value products over the next 18 months. 

Strong position​ 

Meanwhile, RGFC forecast that improved use of labour at the Haydens Bakery division would put it in a strong position to grow pre-tax profit in the coming year. 

However, it added that it “continued to be affected by the well-publicised dramatic reduction in sugar market prices”.

Despite this, it remained positive. “We have made good progress in addressing this with a number of new supply sources secured in the past three months and we see sugar margins being fully restored during the course of 2014.”​ 

Growth strategy

RGFC executive chairman Pieter Totte said:“The investments which we have made in increased sales and marketing resources were designed to transform our businesses from being manufacturing-led to market-led and underpin our growth strategy.​ 

“It is pleasing to see that this strategy is now beginning to bear fruit: volumes are showing good growth in Napier, Renshaw and at Haydens, while we have now recruited sales and marketing teams to deliver similar momentum at R&W Scott and Garrett Ingredients. 

“The instability in the sugar market is giving us short term challenges but our strategic plans in this market remain sound and we are encouraged by the support being given to us by customers who recognise the valuable role we play in the market.”

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