To me at least, it was strange that the repatriation (sort of) of Princes to the list of UK domiciled food companies didn’t create more hullabaloo.
Some 150 years after the business was established, the Liverpool-headquartered owner of a veritable hamper of familiar UK brands – Branston, Batchelors and Flora, in addition to Princes itself – takes its place as one of the UK’s top five food and drink businesses. It stands just behind ABF, Britvic, Tate & Lyle and Premier Foods.
The scale of its ambition for acquisition – laid out in the prospectus which accompanied last week’s IPO – suggests that number five position is just the start for the relaunched business. Indeed, growth by acquisition might well be essential: the same prospectus makes clear that Princes will have almost a third of its total manufacturing capacity available for additional brands or contracts.
Princes’ strong business credentials
I have three particular reasons for wishing the business well. First, in my seven years as chief executive at the Food & Drink Federation and under its previous Mitsubishi ownership, Princes was an active, engaged and supportive member company.
Secondly, my very good friend and former Diageo colleague David Gosnell is the new company’s vice chair. No-one brings more supply chain management, manufacturing expertise and hard-headed common sense to the boardroom table than him.
Finally, Princes will be a test case for the proposition that today’s UK market can provide a launchpad for a serious and successful international food and drink business.
The business has strong credentials, with a well-established brand portfolio across diverse Europe markets, many of which already show significant potential for growth. Its strong manufacturing base (18 factories across the UK, Europe and Africa) and vertically integrated production should allow it to innovate quickly, while a focus on own-brand production might just catch the next food and drink zeitgeist.
But success is by no means assured. Headwinds are growing stronger, particularly in the UK, where food price inflation, geopolitical uncertainty and the already apparent impacts of climate change will continue to dog shoppers for the immediate future.
Global headwinds and Trump chaos
This column has long argued that President Trump, though a deliberate agent of chaos (it keeps his opponents – and his supporters and very probably the man himself – wondering what he’ll do next), is actually a symptom of the ‘great fragmentation’, rather than its cause. But that is a subject for another day.
Still, whether it’s the rise of populism, the global tariff war, or the tragic conflicts in Ukraine, Gaza, and Sudan, these threads all expose the fragility of global supply chains and the erosion of global economic confidence.
The same is true of climate change. Mr Trump may rage – quite literally – against the wind. He may absent the US from next week’s COP30. But global crop yields will remain precarious, with UK food production increasingly challenging. This year’s harvest is the second worst on record and future prospects are even more depressing.
According to the All Party Parliamentary Group on Science & Technology in Agriculture, domestic food production will fall by more than 30% over the next three decades unless urgent action is taken.
Given the complete incoherence of the Keir Starmer administration’s policies on food and drink, that action seems extraordinarily unlikely. More predictably, Chancellor of the Exchequer Rachel Reeves has spent much of the past week softening us all up for a whopping 2p income tax rise. Even allowing for some deliberate exaggeration to mitigate the pain in the budget on 26 November, it seems likely shoppers will have less money and considerably less inclination to spend it after Reeves has done her worst.
While this may open the door to low-cost, distressed acquisitions for Princes, the broader operating environment remains far from benign. The decision to list in London was always finely balanced. Now it stands as a real test of whether a newly established, successful international food and drink business can truly thrive in the UK.
Ian Wright is a partner at Acuti Associates
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