Northern Foods insisted it will not be “holding a fire sale” after revealing it is to divest many of its bakery businesses over the next 12 months.The supplier said this week it wants to dispose of businesses which currently account for 40% of its sales, including Park Cakes, Fletchers Bakery, its chilled pastry businesses and Smith Flour Mills.Chief executive Pat O’Driscoll told British Baker the disposals will reduce the risk and complexity in Northern Foods’ business. She said: “This is not a fire sale, these are good businesses we are selling. We are still very much in the bakery business, but we are focusing on strong brands or growing own label businesses.”Northern Foods hopes to “work through” the sales over the next 12 months, and raise £200m from them. Around 9,000 of its 20,500 staff are expected to transfer to new owners, and a consultation with unions and employee forums is underway, Driscoll said. The rationalisation will leave Northern Foods with five categories: pizza, biscuits, ready meals, sandwiches and Christmas puddings, through its Matthew Walker brand. Brands will account for half the remaining business.Worksop-based Smiths Flour Mills, which has three sites in the UK, is being sold as it is “non-core”, Driscoll said.Park Cakes, which employs 2,000 staff in Oldham and Bolton, and Sheffield-based foodservice supplier Fletchers Bakery, which makes rolls, muffins and scones under the Kara and Fletcher brands are being divested as they are “somewhat lower margin businesses”. Northern Food’s chilled pastry products businesses now on the market are Pork Farms pies and sausage rolls business, Melton Mowbray pork pies, Hollands Pies and Riverside Bakery. These have significant potential, but require major investment “best executed by another market participant”, Northern Foods said. The company hopes to raise £200m from the sales, to fund its pension liabilities, reduce its debts and invest in remaining businesses.Analyst Andrew Saunders from Numis said: “We were expecting more. If this is about playing your best hand of cards, what is being kept is slightly puzzling, There have been three profit warnings in the last three years on biscuits, and Christmas puddings is not a growing market.”The news, which follows a three month review, was announced as the company posted its preliminary results for the year to April 1 with a 27% slide in pre-tax profits – down to £45.1m. Sales were up from £1.42 bn to £1.44bn, as strong sales in the frozen division offset weaker results in bakery and chilled foods arms.
Here’s a question which keeps coming up. Our simple, yet perceptive, country baker Tony Phillips raises it in his column. Are craft bakers too focused on baking, at the expense of sales? As he puts it, bakers tend to spend their time on the production side “with their head in the trough and their bottoms in the air”. The selling side, which requires a totally different set of skills from production – merchandising, marketing and so on, is sidelined. It’s a balancing act, but bakers must remember that, if their stores do not look inviting, passers-by may form the impression that the same standards apply to production as to presentation, They assume what is on sale is neither high-quality nor tasty. That, I think, is why a more glossy outfit, which looks bright and welcoming, may have a queue stretching to the door, while the established local bakery shop, where delicious products are made from scratch, can look like an empty set on a TV drama about yesteryear. When I’m out and about, I keep my eyes peeled for bakery shops. They are disappointingly few and far between. And, when I do find them, they tend to be painted in peeling brown gloss paint, with dusty windows, often with scrappy pieces of A4 paper, advertising promotions, blu-tacked on. It sounds mean to be critical of craft bakers, who have fantastic skills and work really hard, but sadly, appearances do count. If, to attract new customers, you spend £5,000 on a shop makeover, your takings may go up £500 a week. In three months’ time, you start to have funds to invest. It may seem a risky strategy to take on debt if sales are poor. But if you’re sure your bakery is in a good location, it is the way forward, particularly with the rise of slick sandwich chains and coffee bars, which sell cakes and biscuits. There is also the question of opening hours. On a Sunday I’m often struck by the fact my local Greggs is open, that Subway is chugging away nicely, Pret A Manger is full, and Caffè Nero is buzzing, yet the neighbourhood’s independent shops are firmly closed. Perhaps, they need to take a lead from the likes of Birds of Derby or Chester-based Chatwins, which sell a skeleton range and employ a skeleton staff in stores that trade on Sundays. On the subject of clever solutions: we welcome entries from forward-thinking craft bakers in our Baking Industry Awards; the deadline for entry is now June 30.
Epsom-based EPP, has just brought out its sixth-generation MIWE ovens, recently seen on the company’s stand at IBA.Fuel consumption is fine-tuned by an energy saving heating element, a well-balanced circulator fan, and precision nozzles, which distribute the exact amount of heat into the baking chamber.The ovens can be heated with gas, electricity or oil and are available in a number of variations with baking areas ranging from 4sq m to 24sq m.
In the past 25 years, the face of retailing across this country has changed completely. In have come the big supermarkets and out have gone the local community shops – bakers often being a typical example. And I see nothing in the preliminary report from the Competition Commission that will change anything one iota (pg 8).It says issues brought to its attention include the character of town centres and high streets and while farmers sometimes may get a raw deal, suppliers, it thinks, are faring OK.No threats or promises though. No recipe for change yet. Plant bakers and ingredient suppliers may have fewer small customers but the best of them also have much larger customers in the supermarkets and are grateful for that. So overall, it’s rather bland.Of more interest is the Sustainable Communities Bill, sponsored by Conservative MP Nick Hurd, which has cross-party support. By its existence, it recognises that something needs to be done. It says local shopkeepers should be among those who have a say in planning, parking and, let’s hope one day, in fair business rates. Furthermore, it specifically recognises the value of local food traders because anyone with an ounce of common sense knows that shoppers follow food.That guardian of local bakery traders, the National Association of Master Bakers (NA), has found that it is time for tough decisions at the top. Recently appointed CEO Gill Brooks Lonican has decided to close the training section of the NA, which has lost a considerable amount of money over the years. Our columnist and past president Tony Phillips has been against the way it was run from day one, despite the talent of its assessors. His views have been vindicated and Gill Brooks Lonican has shown the common sense and courage needed by a new CEO (pg 6). This bodes well for the association.Meanwhile, organic wheat prices are at an historic high (pg 4). There is a global shortage of organic wheat and there is no good news on the horizon. But as we went to press the great news is that the national media is full of stories about how wholemeal bread and a high-fibre diet can help prevent breast cancer in pre-menopausal women. Let’s hope sales of added-value wholemeal simply soar!
American giant Whole Foods Market opened its UK flagship superstore on Kensington High Street, London, last week, with bakery a key attraction.A working bakery and bakery display section are the centrepiece in the entrance area of the store, with point of sale boasting that breads are: “made from scratch in house by our artisan bread bakers”.In total, 35 varieties are offered, baked throughout the day, using unbleached flour.The bakery range in this area includes teacakes, cookies, muffins, and products sourced from upmarket suppliers including Honeyrose Bakery and Popina. The offer also includes chilled cakes and large ambient ’coffee cakes’, to eat with coffee.In total, the new Whole Foods Market food store occupies an 80,000sq ft three-storey premises, with an eating area on the top level, takeaway foods on the ground floor and groceries in the basement.The takeaway area includes hot and cold foods to go. Unlike the company’s stores in the United States, sandwiches are not made to order. A small range of prepared sandwiches and filled croissants are sold from a chiller area at the back, priced from £2.99 for a filled croissant to £4.99 for a large bloomer or baguette sandwich.The grocery area in the basement has counters including a sweets counter, with select your own chocolates and a ’pies, pastries and quiche’ counter, selling items such as chicken spinach and old spot ham seven-inch pies at £34.99.Whole Foods plans to open around 40 stores in the UK. It currently operates 189 stores in the United States and Canada, as well as five Fresh & Wild shops in the UK.
London-based manufacturer The Bagel Group has gone into administration, with around 80 jobs believed to be at risk. The company, previously known as Mr Bagels, produces bagels under the Mr Bagels brand and filed for administration on 16 January 2009. MCR Corporate Restructuring is administrator. Mr Bagels was set up in 1988 by the Kahalani brothers, Paul and Avi and, in 1996, became a limited company. The firm supplies bagels to the retail and foodservice markets. The Bagel Group hit national headlines in December after alleging an executive at rival Maple Leaf Foods was involved in attempted price-fixing – an allegation that is still under investigation. The Bagel Group declined to comment.
Hoshizaki has launched a new chemical-free cleaning system, which takes ordinary tap water and transforms it into Alkaline ’E’ Water and Acidic ’E’ Water. The ROX machine can use these two water types for almost all cleaning and sanitising requirements, without the use of chemicals and detergents. It is available in two models – the ROX-10WB-E which produces 0.7-1.5 litres of each water per minute, and the ROX-20TB-E, which produces 1.5-3 litres of each water per minute.The machine has a central tank, which takes tap water, with the addition of salt, and uses electrolysis and a negatively charged terminal on one side (for Alkaline ’E’ Water) and a positively charged terminal on the other side (for Acidic ’E’ Water). The Alkaline water is suitable for dissolving proteins and oils, whereas the acidic water is suitable for sanitising and for the removal and control of bacteria, which the company says is 80 times more effective than chemical cleaning. The two types of water can be used individually or at the same time and do not leave any residue.The two models are available for sale, lease and rental and are covered by a two-year guarantee.[http://www.hoshizaki.com]
Bakery manufacturer Evron Foods, which supplies Subway’s breads, is to invest £400k in research and development, to include the investigation of a new sweet muffin-style range.The investment has been supported by an offer of over £140,000 from Invest NI, with funding from the European Regional Development Programme.The firm, which manufactures a range of chilled, frozen and ambient breads and pastries for the retail, foodservice, wholesale and food processing sectors, now hopes to increase its current turnover of approximately £20m by 50% within the next three years. It has also appointed a new commercial manager and key account manager as part of its plan to drive the business forward.“With the support of Invest NI, we now hope to achieve additional efficiencies by further strengthening our management team, while increasing our foothold in the retail bakery market around the UK and Ireland with our new sweet muffin range,” said Morris Evans, managing director, Evron Foods.He said alongside the constant challenge of meeting and exceeding customer expectations, the firm has also faced increasing pressure on its overheads. “Flour, butter and electricity costs have all risen dramatically in recent times, but this further motivates us to be innovative in how we do things,” he added.
Jo Fairley is co-owner of Judges organic bakery and grocery shop in Hastings and co-founded and sold Green & Black’s chocolate firm, with hubby Craig SamsDespite the rise in interest rates and the government cuts, we are all privately or publicly giving three cheers for the fact that the UK is officially out of recession. At Judges Bakery, situated in Hastings a town on the south coast which boasts three out of the 10 poorest boroughs in the UK it has been challenging to compete with the BOGOFs, the sudden middle-class ’fashion’ for trawling the aisles of Lidl and Aldi (where before, the 4×4-driving mob would never have been seen dead), not to mention Tesco online.But we’ve survived and thrived. Indeed, a second shop a ’franchise’ has now been opened 10 miles away. So, how have we managed? Initially, it was all too easy to be lured down the route of price-cutting. In fact, bread is unbelievable value, when you consider pence-per-calorie but we felt we needed to be perceived as truly competing with the supermarkets and bakery chains, even though our organic flour costs more. So our £1 loaf was born: a Monday/Tuesday/Wednesday-only initiative, which offered an 800g (unsliced) sandwich loaf for just a quid.Because we sell a wide range of groceries, we started to offer more goods on promotion: our own two-for-ones, or offering discounts on slower lines to shift stock. The lunchtime ’meal deal’ was created: a sandwich, a drink and a piece of fruit for a very competitive price. But none of this really worked, and turnover fell. The £1 loaf was popular but the customers that bought it didn’t come back, the rest of the week, as we’d hoped. And as for lunch? We all know that, across the land, many people started making their own sandwiches, to save money.So we took a different tack and decided to innovate our way out of the doldrums. Enter the Judges brioche; the seven-seed sourdough; the ’Mmmmmeringue’, as we call it a multi-peaked light-as-air confection about the size of Wales. We ’sexed up’ the sarnies and we introduced innovative and yes, often more expensive grocery lines. And, hey presto! Sales revived beautifully.Because the simple truth is that, while many people are out there looking for a bargain, the majority want to be excited, tempted and delighted when they visit a small, independent bakery/store like ours. BOGOFs don’t do that, but a garlic-and-rosemary ’bread of the month’ another initiative sure did. And if the bread proved popular enough, we kept it as a weekend item. Most importantly, we tasted out our creations right, left and centre because tasting really is believing.So Judges has become known again as somewhere to go to have your taste buds tantalised. The simple truth is, no matter how we cut prices, we were never going to compete with Lidl. But Lidl cannot compete with a bakery where there’s always something new and exciting to try, and where you never know what this month’s bread-of-the-month is going to be until you nip in to find out.They say nothing succeeds like success. But in a recession, I’d say, nothing succeeds like innovation.
Don’t forget to register to attend Bakers’ Fair Autumn. The free-to-attend event will take place at Bolton Arena on Sunday 2 October.The Richemont Club is to host its eighth annual competition, which is open to non-members for the first time, with the winners to be announced by ’Allo ’Allo! star Vicky Michelle.There will also be a talk from the Soil Association on ’Demystifying organic’, and a cake pop-making masterclass by John Robertshaw of Bako North Western.Call 01270 624572 or send an email to [email protected] for competition details. The entry closing date is 16 September. For more details on Bakers’ Fair, visit www.bakersfair.co.uk.