Gluten free driving growth at Nairns Oatcakes

Gluten free driving growth at Nairn's Oatcakes

Nairn's Oatcakes is eyeing expansion in western Europe as the UK oats products manufacturer looks to continue to build its growing export business.

The Edinburgh-based business, which saw turnover jump 19% in its most recent financial year thanks to growth at home and abroad, is also preparing a push into the UK foodservice channel.

Exports account for around 10% of sales at Nairn's, which saw total turnover increase 19.1% to GBP22.1m (US$33.1m) in the 12 months to the end of May.

The company's largest export markets include the US - where it has a subsidiary - South Africa, Malta and Cyprus. It has a presence in France, Spain and Portugal but Katie Birrell, export sales manager at Nairn's, said the company was targeting more markets in western Europe this year.

"That's a lot of western Europe where previously we haven't really targeted," Birrell told just-food at the IFE trade exhibition in London yesterday (23 March). "It's mainly been further afield markets we've done well. Now the focus is more western Europe, targeting Germany, Holland, Belgium and Scandinavia. We think gluten free has a real opportunity for the same reasons as in the UK, where, in any developed market that eats a lot of wheat, the likelihood of gluten-free products being popular is increasing all the time."

Scandinavia is often mentioned as a target market for free-from companies. Birrell also touted the potential for oat-based products in the region. "They understand oats and the benefits of oats, which is very useful. We're about to ship our first order into Finland and that's looking to be quite a strong market for us. There's a lot of opportunity still to go for."

Revenue from outside the UK rose "around 20%" in Nairn's most recent financial year, Birrell said. Company revenues were up 19.1% year-on-year. In a filing with Companies House submitted last month, Nairn's said the increase in sales had come from "continuing growth in sales from the range of gluten-free products, particularly oatcakes and biscuits".

Nairn's core products are wheat-free but in 2010 the company decided to start manufacturing gluten-free products at a dedicated facility. Before then, Nairn's could not market its products as gluten-free due to the potential of cross contamination. At the time, the company felt it could be losing consumers that were once happy with its wheat-free products but had started to look for gluten-free alternatives.

Business development director John Holroyd said the move to lease a new facility had paid off. "My sales forecast have just about been doubled," he said. "All of our growth is coming from gluten free. Increasingly people are looking for really healthy stuff. They don't shop sweet biscuits at all and have rumbled that cereal bars and breakfast biscuits aren't actually healthy so they are either shopping in savoury biscuits or they are shopping in free from."

Domestically, Nairn's has added to its core portfolio in recent months with the launches of healthy snacks product Muesli Breaks and of Astro Bites, snacks targeted at children.

The company, which focuses on the retail channel in the UK, is eyeing a fresh push into foodservice. Nairn's is looking to launch a range of core, wheat-free, oat-based snacks, as well as a line of gluten-free products.

Holroyd said Nairn's had made a foray into foodservice a decade ago but "with products that aren't as good as these".

He explained Nairn's was using IFE to weigh up interest from foodservice buyers but "provisionally" believed the new products could be sold in workplace canteens, coffee shops and, potentially, the in-store restaurants of the company's major retail customers.

Birrell said there could be an opportunity for Nairn's in foodservice channels in export markets. "Definitely for the gluten-free products it will be a target for export," she added.