INTERVIEW: Warburtons plots free-from drive
Warburtons has unveiled an ambitious plan for its free-from business. The UK baker intends to double sales of free-from products during 2013. Katy Askew caught up with Warburtons free-from director Chris Hook to find out how this can be achieved.
Currently, the proportion of Warbutons sales that are generated in the free-from aisle are "very small", free-from director Chris Hook tells just-food.
This does not, however, signal that the firm is lacking in ambition for the business.
Warburtons has said it intends to become "one of the world's best family food businesses" over the next five years. The baker hopes to grow its sales by diversifying its interests, with significant growth expected in snacks, export and free-from.
As part of this drive, Warburtons aims to double its free-from sales over the next 12 months under the newly launched Newburn Bakehouse brand. Currently the baker's free-from sales total GBP5.7m.
"If we hit our target of doubling sales in 2013, it will put Newburn Bakehouse in the top five fastest growing Warburtons brands," Hook reveals.
While Hook soberly observes that such an ambitious target will not be easy to meet, he is optimistic about the firm's ability to drive growth in a category that grew by 18% last year.
Kicking off this initiative last week, Warburtons revealed it is rebranding its free-from offering under the Newburn Bakehouse brand.
According to Hook, the move is significant as it addresses a degree of "confusion" over Warburtons' free-from offering.
On the one hand, Hook says, retailers were not necessarily clear on where the merchandising of Warburtons free-from line up, with some displaying the products alongside conventional counterparts. On the other hand, consumers were concerned with provenance and whether these gluten-free products were being produced in a regular bakery.
"Newburn Bakehouse establishes a point of difference while also leveraging the Warburtons brand," Hook suggests.
As the company launches Newburn, it is "pushing hard" with its marketing and is laying out an initial investment of GBP0.5m. "For a small business, this is a significant amount," Hook emphasises.
In its marketing message, Warburtons will target three key consumer groups: those with coeliac disease, consumers who have a gluten sensitivity and "lifestylers".
"We really trying to grow the market through three broad categories," Hook says. "One, through diagnosed coeliacs, to make their lives easier. That is still the core of our business.... The other consumer that is coming through very strongly are people who are gluten sensitive. We will be communicating with those people fairly actively and encouraging them to seek out the gluten-free options that they need. The third group is lifestylers. They will add the volume purchase, but they are much more transient."
The marketing messages applied are "slightly different" to each group, Hook adds. "For a lifestyler its making them aware that we are in this fixture, with the coeliac its a much more intense and engaged communication and the gluten sensitive falls between the two."
The company is also rolling out a number of new products and innovation will be an important growth driver moving forward, Hook suggests.
"Innovation is key. We have a good range of core products but in terms of new innovation, that is really this year's plan to get new, fresh, high quality baked goods onto the market."
However, "mimicking" products that traditionally sell well in mainstream categories is easier said than done, Hook says. Developing a gluten and wheat-free alternative that stands up to the quality that Warburtons puts behind its baked goods is a significant challenge in itself. As is overcoming the stereotype that gluten-free equates to "cardboard" tasting, Hook says.
In the longer term, Hook says that Warburtons could look beyond the baked goods category. "We might, in the coming years, look into biscuits or... chilled products," he reveals.
Relaunching Warburtons' free-from range under the Newburn brand could provide the platform for the group to move its free-from business outside Warburtons' traditional area of expertise.
"Newburn Bakehouse gives us the ability to build a brand that is transferable," Hook predicts.
Hook also claims that the free-from category could be becoming more mainstream, drawing a parallel with the early days of the organic movement.
"There are parallels between free-from and organic. Whereas once retailers had dedicated organic areas, organic products now sit on the shelf next to conventional ones. As free-from becomes more mainstream, we could see that happening here also."
Currently, keeping free-from products in a dedicated part of the store presents Warburtons with a particular challenge because of the short shelf-life of their free from bakery range.
Hook explains: "A lot of retailers are committing significant fixture space, but for us because we are doing fresh product our biggest issue is getting product on the shelf. It may be arriving in the distribution supply chain but it doesn't always reach the shelf and that is something we are working very hard with retailers to improve on.
"Traditionally most free from products are long shelf life and are treated in a different way in store. Whereas if you go to a bakery section you will see people refreshing that fixture continually throughout the day, they don't do that with a free from fixture."
Another challenge that Warburtons is grappling with as it looks to grow free-from sales is "production and ensuring the quality of the product," Hook comments. "All our ingredients are positively released. And its maintaining the high standards of ingredients, that is a challenge in itself."
The gluten-free market in the UK is a small but rapidly expanding category. And it is also, as you might expect, a highly competitive one, Hook says.
"It is competitive. Own label is very strong - all the retailers have invested in developing their own label free-from products. They have committed significant space within the fixture, where you could be looking at 50-70% own label. And then there are other brands that are particularly strong in sectors within free-from - so somebody could be strong in biscuits, somebody could be strong in cereal. It is quite fragmented."
Even as Warburtons puts its muscle behind developing a strong presence in the free-from aisle, the company is not then expecting a cake walk.
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