Aryzta says bake-off success is driving market share gains

Global bakery business Aryzta has said the competitive advantages of bake-off goods are driving the business’s market share growth.

The bakery giant has reported a 24.2% increase in revenue to in the first half of its financial year to €1,037.1m after cost inflation pushed its prices up by 19.3%.

But the business said consumer trends remained unchanged despite the price increases as bake off remained attractively priced, and was supported by advantages in terms of savings on labour, space and waste. It described volume growth as “healthy” at 5.8%.

Aryzta reported growth across the group and its channels, with outperformance in markets including France, Poland and Switzerland. It said strong performance in the quick-serve restaurant market had been boosted by new product innovation, and that it had outperformed the European retail market in terms of volume and value.

Aryzta last year announced it was doubling its production capacity for sourdough and speciality breads in the UK and Ireland following investment in its Grange Castle bakery in Dublin.

Overall EBITDA margins increased from 7.1% in the last period to 12.5% in H1. Excluding the impact of disposal and restructuring costs on the last period, EBITDA margin was flat. Aryzta said cost management and improved operational benefits had protected group margin from input cost inflation The company reported that initiatives such as manufacturing improvement, standardisation of recipes, procurement and end-to-end optimisation had all contributed to margins.

“Aryzta’s business performance improved across all our key metrics as our strategic plan continues to deliver,” said Aryzta chairman and interim CEO Urs Jordi. “Revenue and organic growth both improved despite unavoidable pricing to recover significant cost inflation.

“Our performance reflects the step-by-step implementation of our bakery strategy as we focus on operational performance improvements within the businesses. We continue to benefit from market share gains as the competitive advantages of bake off drive volume and value”.

The business also announced the appointment of Sandip Gudka as chief operations officer. Gudka, who joined Aryzta in 2015, will retain his current responsibilities as managing director for Global Bun Bakeries.