Premier’s £1.2bn takeover of RHM came as a surprise to many investors, but the company has demonstrated an appetite for iconic British brands in the past.Since its stock market flotation two years ago, Premier has acquired Bird’s custard and Angel Delight brands, and the company behind the meat substitute brand Quorn for £172m. In July it also acquired Campbell’s Soup, which includes Oxo, Batchelor soups and Homepride sauces, in a £460m deal.After the RHM deal, Premier’s finance director Paul Thomas said the company was still looking for more UK brands to add to its portfolio and had the financial capacity to pursue further acquisitions.The RHM deal is predicted by industry commentators to put pressure on rivals such as Associated British Foods and Northern Foods.For the year ending 31 December 2005, Premier Foods reported sales of £790m and operating profits of £102m. The company wants to get a larger part of sales from branded products, which offer a higher rate of return, than making goods under supermarkets own-brands.The deal with RHM will leave Premier as the UK’s biggest food producer with combined sales of around £2.6bn per year.RHM has annual sales of over £1.5bn and over 15,000 employees at approximately 50 locations.For the year ended 29 April 2006, RHM reported sales of £1.56bn and profit of £174m. RHM reported gross assets of £1.35bn and net debt of £676m.Investment group Doughty Hanson floated RHM in July 2005 and retained a 33% shareholding in the company. It first sold stock to investors in July 2005 at 275p. RHM was valued at 352.45p per share by Premier in the deal. Despite high wheat and energy costs, RHM announced. In October that its first-half sales rose 2%.Premier has predicted annual synergies of £85m over the next three years. According to press reports, these will come from £50m worth of cost reductions at manufacturing facilities, a further £25m will come from lower purchasing costs and £10m from closing RHM’s head office in Buckinghamshire, which employs 100 people.Premier Foods was represented by Rothschild and Merrill Lynch in the deal. RHM was represented by Credit Suisse and Citigroup.
Food & Hotel Asia 2008 (FHA2008), an international food event, is set to take place from 22-25 April 2008 at Singapore Expo. This year a Bakery & Pastry 2008 show has been incorporated for the first time to reflect demand from Asia’s growing baking industry.Bakery & Pastry 2008 is set to be visited by industry professionals including ingredients suppliers, packaging, storage and refrigeration equipment suppliers, display and shopfitting equipment and representatives from both plant and craft bakeries, claim organisers, Singapore Exhibition Services.The Asian Pastry Cup, which will also take place at Bakery & Pastry 2008, aims to promote pastry art, giving pastry chefs a chance to meet and share their ideas. Each country is represented by three bakers, which will present a chocolate showpiece, a sugar showpiece, a plated dessert and chocolate cake.There will be also be conferences, seminars, workshops and competitions taking place over the three days.FHA attracted 36,658 trade visitors and 2,327 exhibiting companies in April 2006.Among some of the feedback from FHA2006, managing director of Bakewell Supplies, said: “This show provides an excellent opportunity for us to shop around for baking supplies and equipment. I’m pleased to have a number of business deals in the works.”The 2008 show is the 16th FHA and is expected to attract buyers from all over the world.Food & Hotel Asia (FHA2008) features six specialised events, including Bakery & Pastry 2008.
Bakers are facing high raw material, ingredients and energy costs, and could do without the government’s plans to increase fuel duty by a further 2p per litre from 1 April.Representatives of the Freight Transport Association and the Road Haulage Association met with the Chancellor of the Exchequer Alistair Darling on Monday, 11 February, to try to get him to change these plans.At 50.35p per litre, UK fuel duty for diesel and petrol is already the highest in Europe. Indeed, UK diesel duty is double the EU average rate of 25p per litre. An increase of 2p will generate serious difficulties for bakery firms and distributors.In the last 18 months the whole of UK industry has experienced increased costs as a consequence of higher oil prices on the world market. At a time when we are suffering from the joint threats of an economic slowdown and increasing inflation, the higher costs of transporting goods and services have impacted on every single company throughout the UK.Clearly the Chancellor can have little influence on the world price of oil, but he is responsible for the greater part of the cost of diesel and petrol which is made up of fuel duty and VAT. These taxes constitute almost two-thirds of pump prices ? for every £1.05 per litre, the government collects 66p.
A Welsh pastry business and 40 jobs have been saved, after senior management took control of the firm in a £1m deal.Sales directors Emma Crowther and Philip Stanton, finance director Ceri Smith and operations director Mark Jones all worked for frozen food manufacturer Medway Foods, which operated three factories at Whitstable and Sheppey in Kent and Bridgend in Wales, before it fell into the hands of receivers.They have now become majority shareholders of a new company, Pin-it Pastry, which has acquired the goodwill and assets of the Medway Foods Bridgend pastry factory.The company specialises in the manufacture of turnovers and other frozen pastry products, which are sold to wholesale bakers and food suppliers. The company’s savoury pastry is used in pie crusts for restaurants and bars, including Vintage Inns and Wetherspoons, while its en croute pastry is used in ready meals sold by Marks & Spencer, Waitrose and Sainsbury’s.Crowther said: “We have a very committed expert workforce and excellent niche products. Trading as Pin-it, the new company will be focused on a market we know very well, with the highest-quality products.”Stanton added: “This is a new start for the best aspects of Medway Foods, and means a future for dozens of Welsh workers.”A Pin-it statement said Medway struggled due to under-performance in its cooked meat and prepared food factories in Kent, which are not part of the deal.
I often wonder about the differences between success and failure. We are all aware that businesses in every sector are struggling in the current economic climate; some get to the point where they cannot carry on and, sadly, are forced to go into administration.The recent, well-publicised events at Coffee Republic are a good case in point. (At this point I should mention that my former business supplied them from 1998, and I purchased a few shares so I would receive copies of their accounts.)Over the years, Coffee Republic has rapidly expanded, acquired businesses – for example, Good Bean – contracted and finally moved towards a franchise-based operation, increasing its estate again. My 10,000 shares purchased at 8p had been diluted to 166, worth 20p each at the time of their administration. I purchased 800 shares at 40p in Caffè Nero at the same time. When it went private a couple of years ago, shareholders received 250p per share. Caffè Nero has continued to expand and, more importantly, make a good profit.A visit to both chains will show great superficial similarity; they both serve similar-sounding drinks and comparable ranges of sandwiches, paninis and muffins and so on. The difference in their performance is not just down to timing; Coffee Republic was into variably performing franchises and some very high rents. Even now, I am watching some great coffee shops not only opening, but thriving; examples include London coffee shops Flat White (www.flat-white.co.uk) and Sacred (www.sacredcafe.co.uk). Many of the successes in this area now have very strong Antipodean roots. Indeed, the current hot spot for coffee shops is New Zealand – in particular, Wellington.I can think of examples in other bakery-related sectors. Paul has been an enormous national success story, expanding rapidly, but they sell freshly baked bread (albeit from part-baked frozen), cakes and pastries, plus a range of filled baguettes and drinks – does this sound familiar? Le Pain Quotidien (www.lepainquotidien.com) has a similar range, although more geared to sit down.Ottolenghi (www.ottolenghi.co.uk), my current favourite London bakery/deli, is going from strength to strength. I defy anyone to visit one of their shops and not feel inspired to purchase. I loved my lunch yesterday, the strawberry-peach and pistachio tart as dessert. I only eat their muesli for breakfast and will deliver their cakes to mum today – via the gym!If you get the chance, please visit some of the places I have mentioned and ask yourself: ’What are they doing right/wrong?’ and, more importantly, ’What can I do with my business to make sure I remain one of the successes?’
The Food Standards Agency (FSA)/National Association of Master Bakers’ project specifically looked at reducing salt levels in tin loaves and bloomers, as well as considering no-time dough, sponge-and-dough and long fermentation processes using a variety of flour types, improver types, dough temperatures and rest times.Test baking was carried out in Marriage’s test bakery and also in a range of craft bakery settings.Research showed that:l there are no technical barriers to reducing salt to the FSA 2012 salt reduction target (1g salt or 400mg sodium, average) or below in craft bakeries; all that is required is simple recipe changes and good process control.l bakers can estimate the current salt levels of their bread using a tool developed following the research project and without submitting a sample to the public analyst. By following simple guidance on recipe changes, they can make gradual step-wise reductions towards the FSA 2012 salt target and below.Tools developedAs a result of the project, two salt reduction tools for bakers have now been developed. The first is a web tool, which can be found at www.food.gov.uk/saltcalculator. This enables craft bakers to calculate the current salt level of their bread, by simply entering the amount of flour and salt they use, and to gauge where they are in comparison to the FSA’s target. The second is an easy-to-use table, which provides guidance on stepwise recipe changes that can be made by bakers to reduce the salt content of their bread while retaining consumer acceptance of the new recipes. This can be found at: www.food.gov.uk/news/newsarchive/2010/jul/bakers.Local authority projectTo disseminate the results of the project and the tools that have been developed, the FSA is working in partnership with the NAMB and local authorities. From July to November, local authority officers may make contact with bakers in their area to talk to them about reducing salt in bread.The support offered will involve two visits. At the first, a calculation or a sample will be taken to determine the current salt level in a baker’s bread, advice will be given as to how to reduce salt and any questions answered. A follow-up visit around three months after the first will be made to assess progress, and a further sample or calculation made to determine the reductions made.The results and feedback on any issues arising will be collected centrally. This will enable the FSA and the NAMB to promote the success of the actions of the craft bakery sector in reducing the salt content of bread and providing their consumers with an even healthier product.We encourage you to take part in this initiative, which has the potential to make a really positive impact on the health of your customers and to promote the products on offer by the craft bakery sector.l For further information please contact: Alette Addison at the FSA on [email protected] or the NAMB on 01920 468061.
Equipment manufacturer Starfrost and parent company Star Refrigeration have joined forces to launch a new range of equipment called Glacier.The line combines a spiral freezer and refrigeration plant in one package.The spiral system is suitable for freezing or chilling items, such as pizza, pastry products, desserts and meat and poultry and fish. Each Glacier package is designed, manufactured and installed to meet individual cooling requirements, with a dual-purpose freeze/chill operation available.Glacier features a range of spiral systems and associated refrigeration packages, with cooling capacities from 75kW to 450kW. Available with a range of belt sizes and tier heights, it can be designed to process from 500kg/hr, to over 6,000kg/hr.”Glacier’s cooling system operates with natural refrigerant ammonia,” explained Star Refrigeration sales and marketing director Rob Lamb. “This results in excellent operating efficiency, with zero environmental impact in terms of ozone depletion and global warming. The spiral unit and refrigeration plant are designed to work in complete unison and offer a cost-effective, energy-efficient and flexible solution.”
The humble filling station is not historically known for top bakery cuisine. Not too many years ago, picking up a soggy pasty was about the best the average driver could hope for. But the UK’s fuel retailing industry has been through some pretty major changes recently, and this has resulted in consumers increasingly starting to seek out petrol stations as a destination stop for food including bakery products as either food-to-go or for take-home.One reason for the change is declining profits at the pumps. As fuel sales margins have been squeezed, retailers have been forced to become more inventive with their shop offer. According to IGD’s Convenience Retailing report (May 2010), bakery’s contribution to average sales at UK forecourt stores was 2.9% in 2009, up ever so slightly from 2.8% in 2008. Yet retailers and oil companies alike say the category has plenty of potential.Steady growthRobert Jenkins, food services and chilled category manager at Total UK, says the oil company’s forecourt shops have been seeing steady growth in baked goods. “The growth is coming from hot, savoury food items, and anything related to breakfast meal deals,” he says. “Breakfast baps (bacon etc) have seen an increase in sales of 35-40% in the past 52 weeks. Customers are being tempted by deals more than ever before. In spite of the economic climate, consumers are as hungry as ever, and have no intention of cutting back.”And with major bakery retail names like Greggs expanding into forecourts, the future certainly looks positive. But industry experts warn that the main challenge for suppliers is understanding how the fuel retailing sector works.Firstly, it’s not always obvious who owns which petrol station. Only about a quarter of forecourts today are owned by oil companies. According to figures from Experian Catalist, just over 60% are owned by independents and 14% by hypermarkets. Some retailers own one site, while others own hundreds. Still others are part of a symbol group, such as Spar or Budgens. It can seem a bit complicated, but it’s not impossible to crack.Shell still owns some of its own forecourts and uses its category partners at Foodservice Centre (FSC Group) to look after its bakery lines. Jeremy Simpson, commercial director at FSC Group and also responsible for buying bakery products for Shell’s company-owned sites, says suppliers must research the forecourt sector thoroughly and understand how it operates. It’s also important to learn about the business of each retailer before approaching them sites have differing consumer needs depending on location and customer demographic.Simpson explains: “In the dealer channel, the oil companies have little to do with the shops. With fuel margins being low, more retailers are working with symbol groups, such as Spar and Mace, to enhance their shop offer, so there is an opportunity for bakery suppliers to get their products into the symbol group shops by teaming up with wholesalers. It’s a good way to get into that channel.”He advises suppliers to approach wholesalers directly with products, adding: “If the wholesaler likes them, they might list and promote them and the supplier invoices through the wholesaler. The wholesaler might expect a discount on the product, but because the supplier invoices through the wholesaler, it removes the need for a large credit control department.”That’s a far better route than going out and pitching to individual retailers, which can be time-consuming. Teaming up with a wholesaler can seem expensive, but the wholesaler will really push your products if they like them through their annual trade shows etc. It’s quite a popular route with suppliers, and is becoming increasingly popular.”Direct approachAs far as the sites owned by the oil companies are concerned, Simpson says it’s better to approach the company directly through head office and arrange a meeting with a buyer. About 60% of Shell’s estate is franchise-operated. FSC Group either stocks a brand or uses its own brand, Deli2go. Simpson adds that, at transient sites, such as those owned by Shell, customers often have a different mind-set to those visiting their local petrol station for a loaf of bread. His advice is: “Don’t expect to take your existing product and sell it to the forecourt market. It’s a very different market to the high street and the consumer has a different mind-set. They are often feeling negative in a petrol station usually over the price of the fuel they’ve just bought! and often just want to get home. They’re usually also short of time.”Understanding case size and packaging is also very important. It’s pointless to approach a site that only sells five pasties a day with a case of 50 fresh pasties. And when designing packaging, remember that the consumer will probably need to eat the product in their car.”Give thought to the operation, supply and consumer need-state,” he adds. “If you’ve thought that through, not only will you sell more product, but you’ll impress the buyer with your presentation. That’s what will help clinch the deal.”Sausage rolls are the biggest seller by a long way, he says, followed by savoury slices and pasties. Danish pastries are quite popular, but products like muffins and donuts don’t do so well at Shell’s bigger, high-volume outlets.The company has four suppliers for its savoury pastry range, including Crantock Bakery in Cornwall for pasties and Pieminister for sausage rolls. Simpson adds: “In the main, it’s still mostly impulse buys at busy main route forecourts.”Over at Total, it’s a slightly different story. Jenkins says freshly baked bread is very popular and the more variety the better.He adds: “Price seems to be less of an issue for consumers, with bread baked on-premise commanding a higher price than well-known plant bread. Large French baguettes are our biggest-selling line; these have grown by 12-15% over the past 52 weeks.”Breakfast goods, such as crumpets, muffins and teacakes are still a relatively small part of our business, but have huge potential for development. We are restricted on our ability to grow this category due to short shelf-life, and most products falling into 48-hour lines. Breakfast goods must be ordered in advance, since warehouse availability cannot be guaranteed. This kind of forecasting is a risky business, which requires relatively high store turnover.”He advises bakers to look at supplying locally-sourced products, explaining: “We are currently selling baked products from a well-known village bakery across two of our service stations. Early results are very encouraging: customers want to support their local bakers. Results from the two-site trial suggest that fresh cream cakes and muffins are favourites among customers.”Brian Madderson, chairman of RMI Petrol, which represents 6,000 independent forecourts in the UK, agrees there’s a market for locally baked products. And while it’s usually best for bigger suppliers to go through wholesalers, smaller bakery suppliers should approach retailers directly.Madderson explains: “For smaller bakers, there’s a big and growing demand for local speciality breads and bakery products. Some independents, even though they may have a symbol brand store, still like to sell local produce. These are usually homemade items, or maybe speciality loaves something different, not just your average sliced white loaf. Snacks that can be eaten on the go, such as Danish pastries, are also very popular.”The local baker also needs to make sure that the presentation of their products is right, or at least that the local retailer is prepared to present their products in a manner that is attractive for example in bread baskets.” Madderson advises smaller bakers to look for retailers who already sell other local produce, such as fruit and veg or meat, and approach them directly.Big in bake-offMeanwhile, bake-off is big in many forecourts, with companies like Country Choice and Cuisine de France the main suppliers. Sunil Tandon runs Croydon-based Park Garage Group, one of the biggest independent fuel retailer groups in the UK with 96 sites. He says about 60% of sites have a bake-off facility, all with Country Choice.”Country Choice has a huge range, but it’s the traditional products that are still the most popular sausage rolls, steak and kidney pies etc,” he says. “If you get bake-off wrong, it can cost a lot in labour, plus there’s also wastage to consider. But the margins are quite good if you get it right.”FSC Group has been working with Shell to put bake-off in 50 stores under its existing Deli2go brand. Simpson says: “There are opportunities; just make a call to head office and explain what product you’ve got. We have agreements in place, but we’re always interested in having discussions with potential new suppliers.”Simon Lawrence runs independent group Lawrences Garages (London), and sources speciality breads for one of its five sites from a local bakery in Norwich. He explains: “The bakery supplies us with artisan breads ciabatta, stone-baked but this is very much for a forecourt with local, regular customers. There’s not a huge demand for these types of products, but there’s enough. We also stock the well-known bread brands. We rely on Country Choice for pretty much all our other bakery products. We get our freeze-and-bake products from them sausage rolls are still the best seller.”Pack sizes are very important. Anis Patel is director of Bolton-based Aleef Garages, another of the UK’s biggest independent retailers. He says smaller pack sizes tend to sell better for example, a pack of six rather than 12 snacking items, such as muffins. The company tends to use wholesalers rather than dealing with bakery suppliers directly. Its biggest gripe concerns being able to get enough product without being penalised for minimum orders along with the ability to return unsold bakery goods. Patel adds: “Bread is very low-margin but it is a must-have item. The opportunity is there for small local suppliers, but branded goods do sell. We use a company called Bobby’s Foods for all our snacking lines, such as muffins, cakes and teacakes.”Over at BP, spokesman Mark Salt says snacking trends are moving towards “indulgent American-style confectionery”, such as muffins, donuts, cookies and whoopie pies. The oil company, which has about 250 company-owned sites and sells bakery products via its Wild Bean Café brand, advises bakery manufacturers and brands to “modify and tailor solutions relevant to format and customer type”, but adds that it offers no opportunities for small suppliers.According to James Hall, controller of Bestway symbol group Best-one, suppliers need to research the market and find a point of difference. He advises: “It’s best to make an appointment and take in a range of goods that you can easily produce. Have a look at what type of customer uses the forecourt builders, people on the way to work and put together an appropriate selection of the actual goods and let the person try them. Make the range interesting and a bit special.” Country Choice’s top 10 bakery products in UK forecourts l Extra Large White Baguettel Small White Baguettel White Organic Loafl Small Harvest Grain Baguettel Batched White Crusty Rollsl All Butter Croissant (Curved)l Pain Au Chocolatl Maple Pecan Plaitl Decorated Ring Doughnutsl Yum YumsSource: Country Choice marketing controller Stephen Clifford
BB75 is the annual authoritative tracker of companies that sell baked products as the primary element of their food offering in a retail, food-to-go or eat-in format, benchmarked by the number of outlets operated.This exclusive report monitors the fortunes of all specialist retailers of bakery products on an annual basis, including traditional craft bakers, sandwich chains and branded coffee shop chains.The full in-depth analysis is only available to subscribers of British Baker Magazine, however you can download a pdf of the 2011 league table here>> Download league table (pdf)>> Find out more about subscribing to British Baker Magazine>> Read news article: Bakery retailers see a rise in outlet openings
Retail sales saw a slight increase of 0.3% last month, according to the latest figures.However, the British Retail Consortium (BRC) said the late scorching weather had meant shoppers had turned their back on clothes in favour of stocking up for barbecues.BRC director-general Stephen Robertson said that in tough times the industry should be “thankful” for the improvement in September over August’s 0.6% decline, but conditions remain weak and spending growth below inflation means customers are buying less than this time last year. Taken across the three months to the end of September, the BRC said food sales were up by 2.1%, with non-food sales down by 1.4%.A slower start to food sales in the changeable first few weeks of the month was offset by the unseasonably warm and sunny weather in the last week.“This drove salads, fresh fruit, barbecue foods, ice cream and soft drinks,” the BRC said. “Promotions continued to do well as shoppers remained cautious and looked for value and attractive offers.”Total sales in September rose by 2.5% and for the quarter were 2.2% ahead of this time in 2010, but Robertson said growth has been “flipping” between 1.5% and 2.5% for four months and in the year to date like-for-like growth is “zero”.This was backed up by analysts at Evolution Securities said the figures still represented a “volume decline”.