Weetabix shrugged off the toughest market conditions for a decade to grow revenues and profits in its first full year of ownership by China’s Bright Food Group.
Turnover for the year to 28 December 2013 increased by 3.3% to £366.4m, while operating profit before exceptional items was up 2.2% to £102.5m accounts filed at Companies House reveal this week.
The Alpen and Ready Brek-maker labelled the year “ultimately satisfactory” after what it described as “probably the most difficult and challenging year for the business in a decade.”
Giles Turrell, CEO of Weetabix, told The Grocer: “The top line sales growth was made possible by continued investment behind our core brands, successful innovation, and strong partnership with our major customers.
“Our flagship Weetabix brand remains the UK’s best-selling breakfast cereal. I am particularly pleased that we achieved this in a tough and challenging market environment, this is a reflection of the outstanding work by my team.”
Performance was particularly impacted by a disastrous 2012 wheat harvest, which meant paying significantly higher prices for growers to meet its quality expectations and led to recipe changes to achieve its own quality standards.
Additionally, the firm temporarily suspended the production of Weetabix Minis during the period while it undertook a review of its processes and procedures causing the product to come off shelves in many retailers.
Weetabix also said it was battling low consumer confidence for much of the year and changing shopping behaviour, which saw consumers switch from traditional retailers to the discounters and increasingly turn to their private label ranges.
It noted that many of these issues have persisted into 2014, stating: “We are aware that we are facing some considerable headwinds; the mainstream cereal market continues to decline in volume, the private label sector of the market has become more competitive and levels of promotion in the branded market are likely to increase”.
However, it has invested in NPD to mitigate these pressures, launching Weetabix On The Go breakfast biscuit to tackle the increasing trend of eating breakfast away from the home.
It has continued this push in 2014, saying it is “very encouraged” by early feedback on its Weetabix On The Go drink launched in January 2014.
During the year Weetabix also drew up a plan for growth in China and have used the reach of Bright Foods to gain listings in 2,600 retail outlets in the Shanghai area.
China-based Bright Foods bought a 60% stake in Weetabix in a deal that valued the company at £1.2bn in May 2012.