Consumers turn to Cranswick after scandal

Consumers are increasingly demanding guarantees about where their meat comes from, a move which plays to the Hull-based company’s strengths.

Cranswick’s chief executive Adam Couch said the group only slaughters British pigs and 70 per cent of its pigs come from within a 50-mile radius of its processing sites in Hull and Norfolk, which are both major pig farming areas with a focus on outdoor reared animals.

The other 30 per cent comes from areas like the Scottish borders.

“A lot of our customers are concerned about where the product is from,” said Mr Couch.

“We can prove our traceability. Customers can have every confidence in our products.”

Cranswick processes 25 per cent of the UK’s pigs and has rigorous testing and validation standards.

“Our traceability systems are second to none. We can prove our supply sourcing,” said Mr Couch.

The group carried out tests across all its produce when the horse meat scandal broke in January and no traces of horse or any other meat were found in its pork, duck or other products.

Cranswick’s focus on the premium end of the market has also helped as people go out less and treat themselves at home.

In addition, its focus on pork has helped as pig prices are around one third of the price of beef.

Underlying sales rose by five per cent in the year to March 31.

Total sales were seven per cent higher after taking into account the contribution from Kingston Foods which it bought last June.

Cranswick invested £30m in its asset base during the year to provide additional capacity. The group said it is continuing to broaden its customer base, develop new products and categories and gain market share.

The group commissioned a new fresh pork retail packing facility in Hull at the beginning of March to accommodate new business that was won from Leeds-based Asda earlier this year.

It said that development of the new pastry facility in Malton, North Yorkshire, is on schedule and to budget, with production expected to start at the end of this month.

Marks & Spencer will be the anchor customer at the facility which will produce upmarket all-butter pastry products.

Despite the significant capital investment programme and the purchase of Kingston Foods during the year, Cranswick said strong cash generation in the final quarter will result in year-end net debt being substantially lower than at the end of the third quarter and in line with the level reported a year ago.

The group said it is in a sound financial position, with committed, unsecured facilities of £100m which provide “generous headroom” going forward.

Analyst Darren Shirley, at Shore Capital, said: “In a subdued UK grocery market, categorised by low single digit growth and flat to negative volumes, Cranswick’s full year trading update has confirmed outstanding trading both for the full year and particularly the three-month fourth-quarter period from January to March.

“The acceleration in growth was driven by a combination of Cranswick’s continuing emphasis on new product development, robust in-store category performances across the broadening product portfolio and also market share gains within the cate- gories.”

Cranswick’s export of ribs to the United States and offal and trotters to the Far East is gathering pace.

It is shipping about 25 containers a week to the Far East, plus one a week to the US. Exports now make up about five per cent of group sales and this is expected to grow.

The group has also recently won Australian approval and should start exporting pork leg meat in the next six weeks.

The company has invested about £120m over the past five years in increasing capacity, including at its gourmet bacon plant in Sherburn-in-Elmet, near Leeds.