UPDATE - Hilton planning further pizza rollout in Poland
Hilton extending pizza roll out
UK-based meat processor Hilton Food Group plans to extend the roll out of its new pizza products to additional European markets.
The company initially revealed plans to supply ICA supermarkets in Sweden with fresh pizza products in July. A spokesperson for the company told just-food today (13 September) that the rollout is progressing to plan and that the group is now eyeing additional European markets for its pizza range.
"The venture to supply fresh pizzas is progressing well and we expect to launch the supply to ICA in Sweden in Q4 2016. In terms of roll out of this product into other markets; a roll out in central Europe, specifically Poland, is planned for Q4 2016," the spokesperson said.
The spokesperson declined to provide details of its expansion into the Polish pizza category or indicate whether it intends to enter the sector in conjunction with ICA.
Hilton supplies meat products in the UK, continental Europe and Australia. Expanding into the pizza sector extends the group's category reach but should nevertheless generate synergies as it leverages existing distribution channels, XTB.com analyst David Cheetham told just-food.
"With Hilton Food Group's core competency based in meat packing, the expansion into fresh pizzas is a move away from its traditional lines of business and may be viewed by some as risky. However, I believe that the decision to supply the pizzas to ICA, an existing customer and the leading retailer in Sweden, mitigates a lot of these risks as the distribution channels and sales process is already in place. There is obviously some synergies in the present business model and in the supply of pizzas, and this vertical integration could ultimately prove to be a shrewd idea, and expand profit margins that are traditionally tight in the sector," he suggested.
Earlier this morning, Hilton revealed that operating profit jumped 25.7% in the 28 weeks to 17 July. The company highlighted progress made on strategic issues such as its expansion in pizza. Hilton is also investing in increasing meat processing capacity in Australia and has established a supply agreement with Portuguese retailer Sonae.
ShoreCapital analysts said that the company continues to out-perform the market. "We deem this to be a very good performance from a well-rounded and robust company," the analysts observed in an investor note.
"Hilton continues with its programme of investing in its network of facilities, noting the recent product extension in Sweden into pizza... More broadly, management continues to build up the activity levels in Australia whilst an agreement with Sonae in Portugal is now in place, which may further nudge up operating income in due course."
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