Healthy appetite for growth of food manufacturing sector

The sale of one of Yorkshire’s best known food manufacturers in a £210m deal earlier this month highlighted the appetite for deals in the sector and its contribution to the regional economy.

Hull-based foods maker Aunt Bessie’s has been acquired by the giant group behind Bird’s Eye and Findus as it continues with its expansion plans.

Feltham-based Nomad Foods, which is listed on the New York Stock Exchange, said the acquisition of the brand from William Jackson & Son would grow its footprint even further in the UK.

Aunt Bessie’s, based in Freightliner Road in Hull, employs around 400 staff and is best known for its Yorkshire puddings and frozen potatoes, where it holds the number one and two market share positions.

For the year ended April 2018, Aunt Bessie’s generated revenues and adjusted EBITDA of around £107.8m and £20.2m respectively.

Stefan Descheemaeker, Nomad Foods’ chief executive, said: “Aunt Bessie’s iconic brand, positive values and strong product credentials align well with our existing portfolio.”

Bedale-based Heck Food is another growing brand. Founded five years ago by Debbie and Andrew Keeble it has a turnover of just under £24m, which it is aiming to double by 2021, and currently employs 106 people.

Its growth story has included the opening of a new £3.5m production facility in 2017, which created 75 jobs and produces more than 700 sausages per minute.

Heck’s products are sold in Asda, Sainsbury’s, Tesco and Waitrose and it is best known for its gourmet pork sausages.

Andrew Keeble inside the new factory

The business, which has 50% of the premium brand sausage market, has now expanded its range to include amongst other things chicken-based foods.

And it has more growth on the menu spearheaded by the increasing appetite for vegetarian and vegan products. That, said Andrew Keeble, would be a “real game changer” for the business.

In common with other manufacturing sectors, he sees Brexit and its impact on the labour market as a big challenge.

Brexit is already making its mark, with EU workers looking elsewhere in Europe for jobs, Keeble said.  And that is not just down to the uncertainty; the weakness of the pound has also weakened the attraction of working here.

He adds: “The knock on effect of that is that as a business we are looking at streamlining all aspects of production to become more and more efficient.”

Keeble added that businesses like his have benefited from the UK’s membership of the EU through grant funding, a cash stream that he fears will now disappear and not be replaced.