Boparan becomes the UK’s largest grocery supplier following acquisitions
After a series of acquisitions, including Goodfella’s Pizza, Fox’s Biscuits and Matthew Walker Christmas Puddings, Boparan has quadrupled its revenue in five years. The company’s success has resulted in it being named number one in QC&C’s Food & Drink 150 rankings, becoming the biggest food and drink producer in the UK.
The QC&C’s Food & Drink ranking scheme, in collaboration with The Grocer, is the only sector-wide analysis of the country’s top food and soft drinks company’s financial statements.
Between 2010 and 2014, Boparan’s ranking jumped from 20th place to the top spot, with revenue rising from £838 million to £3.36 billion within the same timeframe.
Strong competition among grocers has had a knock-on effect on producers’ revenues, with average revenue growth falling 5.8% in 2014 to 2.9% this year.
“Changing shopping habits, supermarket price wars, and the continual rise of discounters’ share of the market in the UK have pushed grocery suppliers’ revenue growth to historic lows and squeezed margins ever tighter,” explained Will Hayllar, partner at OC&C Strategy Consultants and author of the report. “However, there is cause for some optimism. Producers are now tackling these challenges head on by investing heavily in efficiencies and innovation, and we’re seeing M&A [mergers and acquisitions] activity ramping up right across the sector, reflecting greater investor confidence and an appetite for growth among players.”
During the first half of this year, six deals within the food and drink industry resulted in a total value of £3.1bn, compared to the 10 deals in over the whole of 2014 worth a combined value of £2.8bn.
Companies throughout the sector are investing in efficiency and innovation to address changes in consumer demand. This has led to an 18% rise year on year in capital expenditure.
“The biggest success stories in this year’s Food & Drink 150 have ambitions far beyond aggressive cost-cutting,” revealed Hayllar.
He recognised certain companies as performing well by adapting to the ever-changing market and addressing consumers’ needs. “By meeting changes in customer demand head-on, McCain and Alpro have delivered revenue growth of twice and six times the industry average respectively. Producers can take their cue from these success stories: relentless innovation, investment in your core and international growth are crucial for sustainable long-term revenue growth.”
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