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Current Position:Home » News » Agri & Animal Products » Meat & Seafood » Topic

Chinese and US exports to boost Cranswick sales

Zoom in font  Zoom out font Published: 2012-05-22  Origin: foodmanufacture  Authour: Lorraine Mullaney
Core Tip: Exports to China and new product launches have helped UK pork products producer Cranswick boost sales despite the recession.
The firm has reported 2011/12 preliminary results a little ahead of analysts’ forecasts, with underlying revenue growth of 10%. Adjusted pre-tax profit reached £45M (against a forecast of £44.2M) after including losses of £712k from the sale of its meat plant Farmers Boy Deeside. 

With its lower price point, pork has been taking market share from other red meats as consumers tighten their belts in the recession. But Cranswick’s sales have been further boosted by strong export markets in South East Asia, according to market analysts.

Prior to the direct export deal agreed with China last week, (click
 
here for details), Cranswick has been using intermediaries to sell fifth quarter pork products – such as offal, tripe and trotters – which are not widely consumed in the UK. 

Strong demand

Nicola Mallard, analyst at Investec Securities, told FoodManufacture.co.uk:
 “Cranswick has been exporting fifth quarter products to China via intermediaries, where pricing has been increasing given strong demand. DEFRA [Department for Environment, Food and Rural Affairs] is currently attempting to establish direct trade links from the UK to China.”

Cranwick’s export revenue looks set to receive a further boost from the US market as the firm’s Preston site was recently accredited by the United States Department of Agriculture. This will enable the firm to take advantage of pork’s higher price point in the US. 

Mallard said:
 “Gaining a licence to sell in the US is important to Cranswick because they get a better price over there and ribs are one of the great American eating out experiences, which makes them an important export product.”

Adam Couch, Cranswick’s new chief operating officer, said: “This [the US] could be quite a significant revenue stream. Depending on the time of year, you are looking at 20–35% more.”

Licence to export

The firm is also seeking a licence to export to Australia, which Mallard predicted would happen in the next six months.

Analysts also said Cranswick’s ongoing product innovation had contributed to its success.

Mallard said: “There’s definitely been a consumer shift towards pork but Cranswick has also gained market share through its constant innovation. They have developed new lines such as pastry products, antipasti and air-dried UK hams and are always looking for new possibilities.”

On a category basis, Cranswick reported 15% revenue growth in fresh pork and 6% in cooked meat. This supported by ongoing product innovation such as the launch of a range of air-dried hams. 

Sausage sales grew by 12%.

Bacon sales rose by 39%, which the group said was driven by an expansion of the customer base and product range.

UK pork sales have risen by an estimated 15% and 25% in volume and value terms respectively between 2006 and 2011, said Mintel. Sales increased from £730M in 2006 to £916M in 2011.
 
 
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