Smithfield's UK push
Three years ago, one of the largest meat players in the world quietly set up shop in the UK.
In 2004, the Norwich Food Company merged with US giant Smithfield Foods to create its first UK office and, since then, the company has been steadily growing and building a strong base in the market. "Our combined revenue [in 2004] was £38m," says CEO John Alton Jones. "By the end of this financial year, we'll be near to £100m. That's good growth in three years."
While the company's launch into the UK market might be described as low-key, it is no longer keeping quiet about its ambitions. "It's our ambition to be THE respected supplier of imported meats with integrity, which match or exceed UK standards," says Alton Jones.
The name Smithfield is familiar to many in the industry - and not just because of the famous and historic wholesale market. Smithfield is described as the world's largest pork supplier and there is no doubting that its reach around the globe is significant.
Until 2004, however, it had yet to establish a presence in the UK market. That changed when Alton Jones merged his business, the Norwich Food Company, into the Smithfield family. "We had a history of dealing with companies in Poland, Spain, Hungary and other cost-effective producers of quality chilled meats. There was also a history of working with Smithfield through Animax, its Polish operation.
"We came to the attention of the US company, which was looking to establish a sales marketing and distribution operation in the UK. They approached me and my business was at a stage where we wanted to consolidate our supply base to move further into retail. So I sold my company to Smithfield to start Smithfield Foods Ltd."
Smithfield then went on to acquire Ridpath Pek, which became a distribution channel for Polish meats, Alton Jones adds.
"The great thing about putting the two businesses together was that there was no overlap in terms of products or customers. In that time, we've consolidated the company into what I like to call a total meat company. We now offer everything except lamb." He says the range of supply makes his company effectively a one-stop shop.
Since then, the company has also strengthened its UK operations further with the acquisition of Sara Lee's EU assets. "We've taken over IFS, Sara Lee's sales platform here in the UK, and integrated its sales and marketing, and that has strengthened the deli and processed meat side of our business," says Alton Jones.
In a market where a branded presence is conspicuous by its absence, Alton Jones claims Smithfield's wealth of brands from across its European portfolio give it a key opportunity over its competitors.
He says the company's authentic brands within the continental deli meat market - such as Jean Caby, a big brand in France, and Morliny from Poland - are a key asset. "Through Smithfield, we own the number one brand in Spain and the top three brands in Poland. We can bring the best of deli to both retail and foodservice."
But it's not just the brands from the Continent that Alton Jones is keen to exploit; the Smithfield name also presents an opportunity, he feels. "Smithfield is a great brand and has a lot of potential. We'll take every opportunity to use the brand where we can."
That work is already under way and the company has been carrying out trials with Tesco, using the Smithfield brand on turkey. "It's a trial," he says. "But it will be expanded if it's successful. Wherever we can, we'll drive forward with the brand and exploit those opportunities."
That said, Alton Jones acknowledges the UK is predominantly own-label and Smithfield will supply according to its customers needs. But he feels there is a strong case for his brands in the deli and charcuterie area, particularly drawing on the authenticity of its sourcing. Those, he claims, make the company a strong player not just in the UK, but in Europe too, and while the big retailers' interests continue to lie with overseas expansion, Smithfield is well-placed to supply them across multiple markets - a distinct advantage for the business, he adds.
Around 94% of all the products supplied through Smithfield are sourced through the wider company's operations, which are all produced to the same technical and quality standards as competitors in the UK, says Alton Jones. "Our production facilities just happen to be more competitively located, or where they are most authentic," he claims.
While Smithfield is doing well in the UK with its imports, it has no assets in UK production at present, but Alton Jones refuses to rule out any move in that direction. "We'll continue to look for opportunities, including acquisitions with British meat. Smithfield has been highly acquisitive, so should the opportunity arise, we'll see."
In the meantime, what is next for the company? "We want to keep moving forward with step-by-step organic growth," says Alton Jones. "We want to make sure we continue to be profitable and that we maintain our customer service levels through that growth. Customer service is the highest priority."
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