Grainfarmers Group, which recently struck a deal with Sainsbury’s to supply its in-store bakeries with fully traceable milling wheat, has reached profitability after paring down staff and transport costs.

Chairman Andrew Christie-Miller told British Baker that creating a leaner, more efficient operation and seeking further agreements with "other major end users" was part of "a move towards becoming more of a food business than purely a merchanting business".

The company reported operating profits for the 12 months to July 31, 2007, of £2.1m, compared to losses of £2.6m and £4m in the previous two years. The farmer-owned business’s marketing arm, Grainfarmers PLC, made a £2.6m operating profit. Turnover was £371m.

Christie-Miller said that the company had shed 55 employees, reducing the number of staff to 195, as part of a review of costs and had invested heavily in logistics software. It spends around £17m a year on transport.

He said the company’s bid to link up with supermarkets and other major grain users would be helped by its network of central stores, which meant that it was well-placed to meet demand and ensure quality. The company recognised that security and continuity of supply are key factors in a volatile market.

The two-year deal with Sainsbury’s involves Camgrain, an East Anglian-based farmer-owned cooperative. The wheat is milled by Whitworth Bros.