Profits at Warburtons rose by more than 30% in 2020, according to the company’s latest accounts.
The UK’s largest bread brand reported an operating profit of £24.2m for the 52-week period to 26 September 2020 compared with £18.5m for the same period a year prior – an increase of 30.8%. This improved profitability was attributed to volume growth, strong cost management and lower exceptional costs, although this was partially offset by higher Covid-19 related costs.
Turnover, meanwhile, increased by 10% from £503.8m to £556m.
”The wrapped bakery market remains very competitive, with underlying long-term declines in bread being offset by growth in other wrapped bakery such as crumpets, thins and rolls,” a spokesperson for Warburtons said. “Overall, we delivered strong growth during our 2019-2020 financial year, delivered through the continued focus on quality, innovation and distribution gains in other wrapped bakery.”
Warburtons’ growth in the first half of the year was led by innovation and distribution gains in the non-bread market, it said. It had launched its full-sized, pre-sliced bagels a few months prior to the beginning of the period – with the NPD supported by an advert starring Robert De Niro.
The second half of the year saw a significant increase in grocery items, including bread, because of the pandemic which was described as having a ‘significant impact’ on the business.
“During the periods of peak demand, the company worked closely with its customers and took measures to maximise the available capacity,” the strategic report stated.
”Over the last 16 months we have worked incredibly hard to ensure that we played our part in feeding the nation, working with customers to maintain service levels throughout the pandemic while also ensuring the health and welfare of our people and managing a significant increase in costs,” the spokesperson added.
Looking forward, the family-owned business, headed by fifth generation and chairman Jonathan Warburton, continues to “focus on the quality of product and service supported by the ongoing development of new product ranges” with recent NPD including gluten-free cake squares, a premium cake range, and pitta breads. It has also kickstarted an own-label bread contract for Co-op in partnership with Jacksons.
“We continue to focus on new product innovations to meet evolving consumer trends while also ensuring our products get to stores across the country fresh each day. This is coming to fruition via our recent £56m boost to manufacturing and distribution, resulting in the opening of three new depots and creation of 150 new jobs,” the spokesperson added.
This investment, which it unveiled in May 2021, includes an £8m crumpet line and £18m thin bagel plant.