urban eat beach hut sandwiches adelie

Adelie has restructured its management team with the appointment of a new chief executive, with previous boss Gavin Cox and chairman Per Harkjaer leaving.

The business, owned by HIG Capital since March 2015, has had a challenging year with growth slowing and the loss of a Sainsbury’s contract to rival Greencore.

Martin Johnson took over as CEO from Cox in February following a planned management restructure by the board, which also included the departure of food industry veteran Harkjaer, who has led Findus Group and United Coffee during his career.

Johnson joined Adelie in September 2015 as COO with a view to taking the reins from Cox who has been with the group since 2010, including three years as CFO. He has previously held executive positions with Mars, British Airports Authority, BMW, Ford and, most recently, at private hospital group BMI Healthcare as chief commercial officer.

“The sector has become more challenging since the exceptional results we had in 2014/15. Food price deflation and supermarkets under price pressure all flow through the supply chain,” Johnson told The Grocer. “There is also more complexity in our business as average run lengths in production have reduced as we have added more product SKUs to serve more customers.” He rejected suggestions the business had stretched itself too thin supplying supermarkets, national coffee shop chains, food service groups and convenience stores.

“I’m proud to be agile and flexible and wouldn’t want to change that as it has always been part of our offer.” He added his focus this year was to simplify the supply chain and optimise the manufacturing footprint and ensure the business provided customers with “impeccable quality, unmatched innovation and unrivalled service”.

Adelie makes four million fresh sandwiches and 250,000 salad packs under the Urban Eat brand as well as own label at its six UK production sites each week.

Annual revenues rose 15% to £295m and pre-tax profits were up 39% to £14.4m in the 12 months to 31 March 2015, the year leading up to HIG buying the business from India Hospitality Corporation.

Accounts for the financial year just ended have yet to be drawn up, but Johnson said growth would not be at the same level as last year. “2015 was an exceptional year and this year has been more reflective of challenging environment,” he added. “The coffee shop side of the business is still growing strongly as more stores open and customers at the chains increase.”

Adelie was close late last year to buying supermarket sandwich filling supplier Freshpak but the deal broke down at the last minute. Sources said HIG may have lost its appetite for concluding a deal in light of the changes at the top.

Freshpak has now fallen into private equity hands, as revealed by The Grocer this week. In October, the group acquired The Bite Group from administrators at Deloitte to expand its access to the Irish food-to-go market.

Johnson said Adelie would concentrate on simplifying the business this year but may look to further acquisitions in 2017.

Adelie has lost its contract to provide Sainsbury’s with sandwiches, with Greencore taking sole supply. Johnson said the move has been positive as the factories were almost at full capacity. “It has allowed us to improve productivity and delivery times for customers,” he added.

Adelie has since signed a six-year deal with a major high street chain, Johnson said, but the new contract did not cover the loss of the business.