Bakkavor invests in chilled breads facility

By Rod Addy contact

- Last updated on GMT

Related tags: Bread

Bakkavor makes a range of chilled breads, from garlic breads to ciabattas
Bakkavor makes a range of chilled breads, from garlic breads to ciabattas
Bakkavor revealed plans for a multi-million pound investment in its chilled bread plant at Crewe as it reported results up to the end of its third financial quarter (Q3).

The global convenience food firm, which counts Tesco, Marks & Spencer, Sainsbury and Morrisons among its customers, said it aimed to invest in additional baking capacity at the factory to meet increased demand.

The investment would enhance the quality of its offering in the growing artisan bread market as well as boosting capacity, it said. The additional lines were expected to be operational by the end of this year.

Bakkavor acquired UK chilled bread supplier New Primebake at Barton-on-Humber in 2006, which at the time made it the market’s largest supplier of chilled bread products. It makes a range of such items, including garlic breads, baguettes, ciabattas and dough balls.

According to the company, there are now three New Primebake sites at Barton, Crewe and Nantwich. FoodManufacture.co.uk understands the latest tranche of cash will be invested at the Crewe facility in Cheshire.

The company said it could not comment on the knock-on effect on jobs in the business.

Although most of its capital was dedicated to the UK market, it said, it would continue to invest in its international businesses.

US expansion

It confirmed that its expansion of its US East Coast facility remained on track. Additional space there would triple capacity, replicating its successful and established business on the West Coast of the US and allowing it to continue to grow with national customers.

Meanwhile, it said the first phase of the investment in its pizza business, was completed in the quarter. Bakkavor revealed a £5M investment in stone-baking and wood-fired pizza ovens at two London sites earlier this year.

The competitive landscape for that category had changed significantly over the past two years, with capacity taken out of the market, the company said.

The investment would therefore allow it to consolidate its number one market position through increasing our stone-baking and wood-firing capacity, building share and further enhancing its offering in the category, it explained.

‘Extended market share’

“We continued the group’s positive performance through this latest quarter as we further extended our market share whilst also improving margins,”​ said Bakkavor ceo Agust Gudmundsson.

“There are unprecedented changes affecting the UK grocery market with the discounters continuing to gain ground. Nonetheless, we remain committed to supporting our customers by significant investment in new technologies and product innovation.”

In the UK, Bakkavor posted 3.4% growth in like-for-like revenue in Q3, from £368.8M last year to £381.6M. Adjusted earnings before interest, taxes, depreciation and amortisation in the same periods rose 9%, from £28.1M to £30.7M.

The company boosted group like-for-like revenue by 4% in the 39 weeks to September 27, from £1.2bn in the same period last year to 1.3bn.

It chalked up operating profit of £56.9M, up on £48.9M in the first nine months of last year. In the same periods, pre-tax profit before non-recurring items rose from £10.5M to £16.1M.

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