“We cannot afford not to invest.” At a time when there is much financial and political uncertainty, these words may jar, but Cranswick chief executive Adam Couch is adamant that investing in the business is the right way for it to thrive.
Over the past three years, the meat processor certainly hasn’t been afraid to open its purse strings, with significant investments made in existing and new operations.
Couch says Cranswick’s 17 manufacturing sites have all benefited from investment over the past two years – with its three primary sites on the receiving end of a “significant” spend. This includes more lairage capacity at Preston, new chilling technology in Norfolk and a 40% throughput increase in the processing capabilities in Northern Ireland.
Couch says nobody should be surprised by the investment, and they should expect more.
More investment (back to top)
“We’re always looking out for new technology and the ability to become more efficient,” he explains. “Often, we’ll change equipment – not because it’s exhausted or outdated, but because there is new equipment that can help improve efficiencies and yield.
“Our capital expenditure is double the depreciation rate for the business. It has been for the past three years and it will be for the next two years at least. We plough a lot into our facilities because we know how important it is to have modern facilities in a post-Brexit environment.”
Brexit, he adds, is “not just the elephant in the room – it is the room”. So is the huge level of investment being made by Cranswick in preparation for UK leaving the EU?
“It would have happened anyway,” he says. “Brexit is a concern for us in terms of clarity, but we have confidence that there will always be a requirement for premium-quality British food. This leaves us with the reassurance to continue investing.”
With formal transition proceedings to leave the EU less than a year away, there have been concerns about importing food from other countries that may not be of the same standard as that in the UK. Couch says everyone has a part to play to ensure standards are met.
A level playing field (back to top)
“There is always a concern that we want to work from a level playing field, but this is something for trade bodies and regulators to maintain. The UK is 55% self-sufficient in pig meat, so there will be product coming in to fill those gaps. The industry has a responsibility to ensure those standards are maintained.”
In discussing standards, it’s impossible to skirt over the recent wave of enforcement action by the Food Standards Agency that has resulted in some businesses closing their doors. Rather than getting frustrated that the entire sector may be getting tarred with the same brush, Couch is focusing on what Cranswick can do to protect itself and its customers.
“We employ more than 10,000 staff, and well over 350 of these work in technical teams at our processing facilities to oversee transparency. Yes, it’s disappointing when we see the issues highlighted, but all we can do is maintain our own high standards.”
Looking ahead, Couch says that investment will help the firm expand into new areas, such as charcuterie and poultry. “We are just about to open up our new Continental Fine Foods facility in Bury. It’s a 12,000m2 facility that is double the existing site and this will enable us to continue to grow in areas we’re not always associated with.”
New facility (back to top)
Over the next two years, Cranswick plans to build a new poultry processing facility in Eye, Suffolk. Couch says initial expenditure will be £55m, with further investment to be made in farming and a feed mill.
“There hasn’t been a new poultry site of this scale built in the UK for well over 20 years,” he says. “If you looked at our business three years ago, we weren’t in poultry and now it’s 15% of revenues, with the intention to make it a lot more in the medium to long term.
“And the building of the new facility is an extremely exciting phase for us. We’ve not done a capital expenditure programme even approaching this level in the past; we’re spending close to £60m, which is a signal of our intent going forward.”
Poultry isn’t the only area Cranswick is branching into. Couch believes that British charcuterie is ready to explode and he wants the business to be at the forefront.
“Everyone thinks charcuterie has to be the preserve of the Spanish or the Italians, but that’s not the case, we’ve got some great innovations and fantastic products within the Woodall’s range. Expect to see them hit the retailers in increasing volumes over the next two to three years.
“Relevant is a buzzword in Cranswick right now. We want to keep the products relevant in the marketplace. New product development is still the lifeblood of our industry and charcuterie feeds into this.”