UK: Ready-meals growth prompts Greencore move for Hain site

By Dean Best | 23 August 2012

Greencore wanted to up capacity to meet demand for ready meals

Greencore wanted to up capacity to meet demand for ready meals

The growth in the UK ready-meals market has led Greencore to move for Hain Celestial's own-label plant in the country, the Irish group said today (23 August).

Hain Celestial, the US food manufacturer said last night that Greencore was the buyer of the UK own-label chilled ready meals unit it had announced in May it would sell.

Greencore has snapped up International Cuisine Limited, or ICL, a ready meals business based in north-east England for an undisclosed sum. The site generates annual turnover of around GBP45m (US$71.5m).

ICL supplies UK retailers including Asda and The Co-operative Group, two existing Greencore customers.

However, a Greencore spokesperson told just-food the acquisition was made to boost capacity to meet demand for ready meals.

Citing Kantar Worldpanel data Greencore published in its first-half results statement in March, the spokesperson said the UK ready-meals sector was growing at 9.2%.

"A lot of it has been driven by meal deals. We've seen growth at the low end of the market and at the premium end. It's driven by more consumers using the eating at home occasion rather than dining out," the spokesperson said.

Around 530 staff work at the ICL plant in Durham. The spokesperson said Greencore would look to extract synergies at the site but said it was "too early" to say "where they are going to come from". However, he added there were "no plans" to change the number of staff at the plant.

Analysts at Shore Capital said the acquisition was "a sensible deal at attractive multiples".

"We believe the transaction makes sense as it provides additional ready meals capacity for Greencore without expanding capacity within the industry. At recent historic growth rates, we believe Greencore would have needed to expand its ready meals capacity with 12-18 months, either through expansion of an existing facility or a green field site, either avenue potentially requiring significant capital investment, maybe GBP10-15m," they wrote in a note to investors.

Sectors: Chilled foods, Mergers & acquisitions, Private label

Companies: Greencore, Hain Celestial, Asda, The Co-operative Group

View next/previous articles

Currently reading -

UK: Ready-meals growth prompts Greencore move for Hain site

There are currently no comments on this article

Be the first to comment on this article

Related research

Asda UK: Consumer Profile

Asda UK: Consumer Profile is the result of Canadean’s extensive online consumer survey Asda in the UK, presenting uniquely detailed data on Asda’s end-consumers. It provides retailer profiles for both Main and Occasional consumers (determined by the ...

Related articles

Editor's choice: the highlights on just-food last week

Last week ended as it started: with a household brand caught up in the horsemeat contamination scandal. On Monday, Nestle said it had pulled Buitoni products in Spain and Italy after positive tests and, on Friday, Birds Eye said it had recalled ready meals across Europe after similar results. Over in the US, leading executives from some of the largest packaged food companies were at CAGNY to discuss their prospects for the year ahead.

HORSEMEAT: "Shocked" Asda CEO Clarke sets out to rebuild trust

Asda CEO Andy Clarke has said the UK retailer will "leave no stone unturned" in rebuilding consumer confidence "dented" amid the horsemeat contamination scandal.

On the money: Price strategy paying off, insists Asda

Asda CEO Andy Clarke has insisted the retailer's moves to lower prices on "essential" products are working despite sales slowing in the last three months of its financial year.

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page