Finsbury CEO outlines growth

27 September, 2011

The export of branded cakes has helped Finsbury Food Group to a 12.1% increase in sales in its cake division, as the exchange rate has benefited its Lightbody Europe (LBE) business.

Finsbury CEO John Duffy told British Baker that the firm had posted “pretty respectable” full-year financials in what had been a difficult trading market.

“It has not been the easiest few years for us. We have had to take stock and rethink some plans, but the figures for the end of this financial year have demonstrated that some of the hard work over the previous few years has started to come through in terms of front-line growth.”

The manufacturer of cake, bread and morning goods achieved a 12.6% increase in group revenue in its preliminary results for the year to 2 July 2011. Adjusted profit before tax was up 8.3% to £5.8m, while group revenue stood at £189.6m.

Sales in its cake division hit the £139.6m mark, while its bread and free-from sales continued to see a good rate growth, up 14.2% to £50m.

Duffy said that, in part, the growth in its cake division had come about through refocusing on its licensed brands, higher-value celebration cakes and premium own-label.

“We demonstrated to our customers, through a bit of innovation and repositioning, as well as the category management work we’ve invested in, that consumers didn’t just want a lot of cheap products to choose from; they wanted good value, but they also wanted good products and innovation.”

Approximately 50% of the sales growth in its cake division was generated by LBE, a 50%-owned subsidiary export operation. “LBE has been doing fairly steady business for the past 10 years, exporting licensed celebration cakes, such as Thorntons, and little niche UK products into Europe. It has continued to grow in the past 12 months, and we’ve also slightly tweaked the business model,” said Duffy. “We found there were a number of branded players in the UK that wanted to export their products, so we’re now doing that job for them through LBE.”

The cakes are mainly exported to France, Benelux and Scandinavian countries, but LBE has also exported relatively small volumes to the US and Japan in the past year. Duffy said it was certainly an area the group would look to grow, especially if the exchange rate was favourable.

Finsbury also added the Disney small cakes licence to its portfolio, which has already seen the launch of a number of new products.

The firm said the increased revenue within bread and free-from had come from its investment in the Vogels brand, as well as the ongoing growth of its fresh free-from range of both Genius branded products and own-label.

Cranks performed well, said Duffy, and since named in CASH’s recent bread report as a brand that contained high levels of salt, he said the firm had accelerated its salt reduction programme in order to meet the 2012 salt targets. However, he said its breads were made to ‘real bread’ standards, and he would not want to reduce the amount of salt to levels where “nasties” would need to be added the bread instead.

Duffy said a noticeable trend, of late, had been that consumers had become more deal-orientated. However, he said they were also still quite discerning about what products they chose, and were still interested in what their food was made from and how healthy it was, for example. “They want real value, and are perhaps more critical, but are willing to pay for it.”

He added: “The macro environment seems to be getting tougher, and we’re clearly very concerned about the possibility of a double-dip recession, and the effect those worries are having on consumers’ minds. All we can do is keep providing choice.”

>>Bread and cakes drive Finsbury

>>Finsbury and Genius strike new deal





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