Cranswick chief executive Adam Couch has told of his excitement at taking a bite into the pet food market, following a recent acquisition.
The FTSE-listed firm, diversifying from its pure pork interests to poultry and now a four-legged consumer, swooped for Grove Pet Foods, a long-established Lincolnshire business.
It followed an aborted attempt to take on a North Yorkshire producer just over a year ago.
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Speaking to Business Live following a robust trading update covering off the Christmas period, which is likely to see the Hull firm emerge as a £2 billion turnover firm at year-end, Mr Couch said: “We have got a good pipeline of growth. The acquisition was something we have been chasing for a while, we came close with another a year ago but it didn’t quite come off, and this is a nice fit for us, in keeping with how we manage the business - bolt on acquisitions where we can put scale in.
“Often the management teams are great, but maybe need capital. It helps that we are already in that area too. We do provide product that ends up in pet food, so it is the right area for us to be in.”
Grove is a £21.5 million turnover company that employs 100 people at a plant at North Scarle, just west of Lincoln. Brands include Vitalin and Alpha Feeds, while it also has strong white label production with retailers.
Organic growth is also a huge focus, no more so in Hull, where a breaded chicken production facility is completing in Helsinki Road, creating 200 jobs and opening more avenues.
It follows poultry production starting in Eye, Norfolk, a few years ago, with Morrisons a key client.
“We will open the new breaded poultry factory at the end of March, ready for the new financial year,” Mr Couch said of the progress with the big reveal last May. “It is really exciting, a brand new facility, £31 million invested in Helsinki Road.
“It puts us on the value-added road in poultry, with great innovation and some exciting products heading mainly for retail, but with a high volume food service line in there too.”
He wouldn’t be drawn on whether McDonald’s could be the potential end customer for that, having recently added bacon supply to the golden arches from a neighbouring site.
On the progress in the past quarter, Mr Couch - in his tenth year as chief executive - said: “We had great execution over Christmas, as good as I can recall in terms of service delivery and quality, and we managed it despite the headwinds of staffing, Omicron and the usual suspects - I cannot remember a time like it.
“It was a phenomenal Christmas trade, particularly with our pastry products for M&S. There was a lot of innovation, inspirational products, and we’re proud of that, so we had a very strong Christmas.
“Now we are heading straight for Easter, and again we have some great innovative lines coming out of our pastry sites. One is a platter pack, 10 or more different elements, salami, cheese, breadsticks - a smorgasbord of different produce - and I certainly look forward to more innovation in this area.”
That is in Malton, but one further headwind facing the business is the over-supply of pigs, with China a concern.
“We have been hit by a three-pronged issue,” he explained, with lobbying of government ongoing on several fronts.
“The loss of China, in terms of demand because of constant lockdown and then a suspended export license, one site has still not received it back, and it is not just affecting us but other manufacturers.”
It was suspended due to a Covid outbreak - along with a Northern Ireland site. The latter was returned quickly, Norfolk still remains on the ban list.
“Omicron has led to a lack of labour on sites, so we are still running quite tight on staffing,” Mr Couch continued.
“We’re now processing on weekends to recover, working with government to give a better steer on migrant workforces, working on ways to take in staff from other parts of the globe.”
“Then there is general oversupply as well. We’re up on numbers year on year, but not quite where we’d like to be.
“We are heavily affected, we have 30 per cent of the market, but it is a whole industry issue, and one suffered around Europe, particularly in Ireland too.
“There is an increase of pigs post-Christmas which we are working with farmers and government to find a suitable solution for.
“China is home to half the world’s pig population; demand has been subdued due to the pandemic, but we are hopeful this will come to an end once China comes out of lockdown."
The day's trading saw shares lift 2 per cent on the back of the update, to 3,756p.
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