A drive by consumers for meat-free alternative has helped Quorn continue to register growth despite the competitive environment in UK grocery.
Sales rose 5.2% at the brand to £158m in the face of “sluggish” conditions in the UK. A significant investment in marketing, with ads featuring Olympian gold medallist Mo Farah, helped drive that sales growth, accounts for parent Marlow Foods in 2015 revealed.
But the tough conditions in the slowed growth down from the 7% recorded in 2014.
CEO Kevin Brennan said despite the “very difficult” retail environment Quorn was growing strongly with virtually every customer it trades with in the UK in 2016.
He was also confident that investment by new owner Monde Nissin, which acquired Quorn for £550m in October 2015, in overseas markets would help growth get back towards double-digit levels this year. And a push into Asia – the home market of Monde Nissin – is expected to fuel a further 15% jump in sales in 2017.
“Despite the very difficult retail environment we’re growing with virtually every customer we trade with in the UK and some seeing good double digit growth as well,” he said.
“And with some of the retailers’ performances that takes some doing at the moment. We also see that momentum building.
“Part of reason for our outperformance in the UK is that despite the lack of growth in grocery there is a declining consumption of meat and the move towards meat alternatives continues apace. There are not a lot of growth opportunities out there so this category is a compelling case.”
Brennan is confident Quorn will be a $1bn brand worldwide in the medium term with the backing of Monde Nissin.
Moy Park has appointed Sian Land as chief financial officer. She is a chartered accountant and has more than 20 years’ experience working for food manufacturing businesses, including in senior finance roles at Campbell’s Frozen Foods, Premier Foods and Muller Dairy. Most recently, Land was group finance director at IPL, a £2bn turnover UK-based food and drink company.
Moy Park CEO Janet McCollum said: “I am delighted to be welcoming someone of Sian’s calibre to the company. She has substantial experience of finance roles within the food sector, which will be invaluable to Moy Park as we enter our next phase of growth. I would also like to thank Helen Glennie for her hard work and commitment as interim CFO, and we wish her very well for the future.”
Morrisons (MRW) continued to benefit from its turnaround this morning with shares up another 1.2% to 210.6p. But Ocado (OCDO) was back on the slide with shares down 1.9% to 267.8p. Tesco (TSCO) was also down 1% this morning to 167.9p. The FTSE 100 has also nudged up 0.2% to 6,743.92 points.
Yesterday in the City
Morrisons (MRW) shares soared 7% to 207.1p on the positive half-year figures release yesterday with like-for-like growth of 2%. The stock has now recovered 40% so far this year as CEO David Potts has methodically made steady inroads with a difficult turnaround.
Tesco (TSCO) and Sainsbury’s (SBRY) also shared in the recovery of the sector, with shares up 3.5% to 167.3p and 1.6% to 238.8p.
The sector helped keep the FTSE 100 above water, with the index up 0.5% to 6,709.41 points.
Ocado (OCADO) also stopped the rot after two days of heavy falls, climbing 4.7% to 269.1p. However, after shares fell 20% on Tuesday and Wednesday after a margin warning by CEO Tim Steiner, the price is still way down this week.
Booker (BOK) also had a good day, up 1.7% to 180.9p, after Londis and Budgens helped Q2 sales jump 15.2%.
Other risers included Coca-Cola HBC (CCH), Diageo (DGE) and Greggs (GRG), up 3.8% to 269.1p, 2.2% to 2,119p and 1.7% to 1,043p.
Investors in value meat operator Crawshaw (CRAW) had a nightmare as a mass sell-off led to the share price collapsing 43% to 41.9p after the group revealed sales had slowed down in the first half. It also warned that the category had become more competitive as the supermarkets aggressively targeted meat price cuts in recent weeks.
Marks & Spencer (MKS) was also down 2.5% to 313.7p and Associated British Foods (ABF) continued to have a bad week, falling 1.3% to 2,722p – down 14% since Monday’s trading update.