The £45m-a-year M&S Italian ready-meal contract has been split between Bakkavör and RF Brookes, The Grocer can reveal.
It has taken M&S less than two months to find a new supplier for its own-label lasagne and pasta ready meals after Northern Foods refused to bow to new terms set by the retailer and mothballed its Fenland Foods factory in Grantham.
Iceland-based ready meal giant Bakkavör will make the filled pasta dishes, said a source close to the negotiations. RF Brookes, owned by Premier Foods, which already makes other ready meals for M&S, will manufacture the bestselling 400g M&S lasagne meals, which sell five million units a year.
Although neither company would confirm the deal, the news will be welcomed by workers at RF Brookes after The Daily Telegraph reported Premier was planning to sell the company in April. Premier was understood to be looking to cease its own-label food production in favour of focusing on its core brands such as Hovis and Mr Kipling.
But Catalyst Corporate Finance retail analyst Simon Peacock warned Premier and Bakkavör not to expect an easy ride from M&S, which was criticised by manufacturers for its aggressive Project Genesis initiative to improve supplier terms. "M&S will maintain its strong stance with the two companies because there is a lot of competition out there to supply ready meals," said Peacock. "But bigger companies such as Premier and Bakkavör can handle M&S's demands for price discounts because they are more flexible, have the means to reshuffle economies and be more creative with process at the start of the production chain."
Meanwhile there was also renewed hope for the 730 workers facing redundancy at the Fenland Foods plant. "Northern Foods is engaged in dialogue with a couple of retailers regarding lasagne, although it is early days," said a spokesman.
This week Northern Foods announced the departure of FD Jez Maiden. Communications director Hilary Bakery left last Friday.