Food group Chaucer’s appetite to raise new capital

Chaucer Foods wants to take advantage of growth opportunities in the global market for specialist food ingredients.

The company manufactures freeze-dried fruits and bread crouton products for customers including Kellogg’s, Heinz, Unilever, Kraft, Nestle and Starbucks.

Chaucer has revenues of $120m, of which 70 per cent come from international sales, and oversees supply chain operations across the world.

It has invested heavily in recent years, increasing capacity at its Hull operations and acquiring a rival in the United States.

Chaucer is led by chief executive Andrew Ducker and chairman David Manning, long-standing business partners who joined the business in 2011.

Royal Bank of Scotland, HSBC and Endless own 60 per cent of the company with management holding the rest.

Chaucer is carrying a debt burden of $40m after a management buyout in the pre-financial crisis year of 2005.

Mr Ducker told The Yorkshire Post: “At some point we will want to bring new capital into the business to allow the company to further expand and grow because the opportunities in the natural ingredient and health and nutrition space are growing very rapidly and we want to take advantage of those.

“Bringing new investment is part of the plan.”

Chaucer’s freeze-dried fruit business accounts for 80 per cent of sales. The company is reckoned to be the largest industrial user of strawberries in the world.

It uses 25,000 tonnes of fresh strawberries a year, creating 2,000 tonnes of freeze-dried ones, the type used in cereals like Special K.

Chaucer grows its own strawberries in Chile, Tunisia and China and is constantly looking for new farmers to add to its supply chain.

The company has freeze-drying facilities in Saumer in France and in China, although Mr Ducker indicated he was looking for other production facilities elsewhere in the East.

He said: “Double-digit inflation in labour in China is becoming a challenge (as is) the industrialisation of farming land. We are looking further afield into Vietnam and Laos.”

Earlier this year, Chaucer bought a majority stake in a Californian business, Crunchies Food Company, the leading US freeze-fried brand, to strengthen its position in the fast-growing market for health conscious consumers in America. It is sold through Walmart, Costco and Whole Foods.

Mr Ducker said the investment was part of the company’s corporate strategy to become a truly global, market leading specialist food ingredient and consumer products producer.

Chaucer has invested £8m in America to date.

Bread products make up the rest of Chaucer’s business. It has a bakery in Derby and manufacturing operations in Hull, which have seen a £3m upgrade.

The company received taxpayer support for the investment of its Hull factory, with the Humber Local Enterprise Partnership proving 10 per cent of the cost to expand premises and buy new plant.

The plan created 50 jobs, nearly doubling the workforce in Hull. In total, Chaucer employs 400 people.

Mr Ducker, 51, is a chartered accountant who trained at KPMG. He has held three CEO positions at public and privately held companies. His business patner, Mr Manning, 56, is a former banker.

The company was founded in Kent in 1980 as a bakery that specialised in making a special type of bread for croutons in instant soup. It moved to Hull in 1988 to be closer to its two main raw material suppliers, William Jackson Food Group and AAK UK.

US target snapped up after entering bankruptcy proceedings

Crunchies Food Company launched in 2005 to take advantage of strong demand among American consumers for tasty snacks that taste good.

Its products - freeze-dried fruits and vegetables, with no additives - proved so popular that the business experienced strong double-digit growth.

But the Californian business filed for Chapter 11 bankruptcy protection this summer, according to US media.

Chaucer Foods announced in October that it had entered into an agreement to acquire 65 per cent of Crunchies.

“The investment provides Crunchies with access to our significant global reach and marketing/sales leverage to continue their growth trajectory,” said the Yorkshire business.