Blackfriar: Cranswick reaps reward for keeping its nerve in crisis

The group has had to navigate its way between declining consumer demand as food inflation, job losses and Government austerity measures dealt it one blow, and increasing pressure from the omnipotent supermarkets to reduce prices dealing it another.

It would have been all too easy during this time to batten down the hatches, but Cranswick has invested hundreds of millions of pounds ensuring that its factories are state-of-the-art and as efficient as they can possibly be.

This effort paid off this week when the group reported a 10 per cent increase in sales as more families switched to pork, ham, sausages and bacon over the festive season.

With pork selling at less than half the price of beef and lamb, cost-conscious shoppers are increasingly switching to “the alternative white meat”.

Hull-based Cranswick also benefited from the decision by many families to supplement expensive poultry joints such as turkey and chicken with hams and other pork products such as bacon and sausages, a trend identified earlier this year by Bradford-based Morrisons’ chief executive Dalton Philips.

Cranswick, which supplies the Jamie Oliver brand as well as Sainsbury’s and Tesco, said meat-eaters are turning to pork because it represents good value and is healthier compared with other types of proteins.

All its product categories saw improved trading, with “particularly strong” demand for bacon and fresh pork ensuring sales for the quarter to December 31 were up by 10 per cent on a year earlier.

There was a six per cent increase in UK pigs produced last year, while Cranswick did even better with an 11 per cent increase.

Like many of the best Yorkshire operators, Cranswick is also making the most of overseas demand.

Last week Blackfriar commented on Leeds-based Asda’s export initiative as it starts exporting its highly regarded fashion budget clothing brand George to the Middle East.

This week Cranswick’s decision to start exporting pig joints to South East Asia and the Far East last year has definitely paid off.

Initially Cranswick was exporting pork cuts that wouldn’t fetch much, if any, money in the UK. These typically involved heads, tails and feet.

But as the area grows in affluence, more expensive cuts such as hocks and shin meat are also becoming popular.

At the same time as these initiatives grow in strength, Cranswick is not resting on its laurels at home.

It has moved into pastry products, with its all-butter pastry premium sausage rolls going down well with customers.

Other new products include the Yorkish Pasty following Cornwall’s success in banning other counties from calling their pasties ‘Cornish’.

The Yorkish Pasty is available in a traditional meat version as well as a cheese and onion and a curried vegetable version.

Speaking about Cranswick’s results yesterday, analyst Darren Shirley at Shore Capital said: “Progress is evident across all UK product categories, with sales benefiting from pork’s increasing value credentials relative to other proteins, whilst delivering share gains through a strong new product development programme.

“International sales have more than doubled, enhancing margins.

“Cranswick is reaffirming its position as a best-in-class operator within the UK mid-cap consumer arena and should represent a core holding.

“To our minds, critical to Cranswick’s progress is industry-leading new product development, with management suggesting new products are responsible for 50 per cent of total category growth.”

Cranswick has its finger in a number of pies and it is managing to excel in all its enterprises.

Management deserve credit for keeping faith during the downturn and continuing to invest.

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