The GBP80m deal will give Aryzta a presence in the flat bread market and a spokesperson for the Swiss bakery giant was upbeat about the category’s potential.
“Flat breads are a product we’ve had no capability until now [and] are growing in demand in all channels,” the spokesperson said.
Aryzta supplies the retail and foodservice sectors and the spokesperson said the acquisition of Honeytop would bolster the product range it offers to customers, who, he said, are “looking for large product ranges from as fewer players as possible”.
Officials at Honeytop, which claims to be Europe’s leading producer of naan and flat breads, could not be reached for immediate comment.
The Kent-based business was founded in 1984 and sells a range that also includes tortillas, pancakes and crumpets.
Aryzta made the announcement as it reported a rise in annual profits on the back of increased sales, which were boosted by acquisitions made in North America in 2010. In June last year, the company announced it had agreed to pay a combined US$1.08bn for US firms Fresh Start Bakeries and Great Kitchens.
Today, Aryzta said it had “committed EUR100m investment to a number of bolt-on acquisitions in Asia and the UK”.
Aryzta revealed that it expects to close the acquisition of two bakeries in Taiwan and Singapore by the end of the year. Last year, the company it was looking to invest in bakeries in the countries that supplied a “leading international quick service restaurants operator”. The Aryzta spokesperson said today there had been a number of “financial and legal issues” that had delayed the deals.
The acquisitions of the bakeries in Taiwan and Singapore and the purchase of Honeytop are set to add EUR78m to Aryzta’s revenue in the current financial year.
At the time of Aryzta’s original announcement on the planned investments in Taiwan and Singapore, it had also said it would invest in a third bakery in Malaysia. However, today, Aryzta said it now planned instead to build its own bakery in the country.
Speaking to analysts after Aryzta announced its annual results, CEO Owen Killian said the company could not rely on economic growth to increase its revenues. Killian said Aryzta would “leverage our key customer relationships” to bolster its top line, as well as look to more acquisitions. He also indicated that the company would continue to invest in developing markets.
“We seek consolidation opportunities to add customers, channels, products and geographies and we see increased investment in emerging markets, particulalry by the best operators in limited serve restaurants who understand the value of sophisticated supply chain and who value partnerships,” Killian said.
The Aryzta chief also outlined the company’s plan to accelerate its Aryzta Transformation Initiative, which would see it spend EUR100m on “optimising” its supply chain and investing in enterprise resource planning.
Killian said the initiative was a “critical enabler to transform our business” and would help the company increase its revenues by “leveraging these customer relationships we have for cross-selling opportunities”. He said: “The objective is to provide full availability of our entire product range across all channels and customers.”
The Aryzta CEO insisted the ATI programme would improve the company’s “leadership” position in speciality bakery and “deliver margin enhancement”. He added: “We already have excellent bakery capability embedded throughout our business, which may in many cases be trapped in within a business and available only to certain customers. We need to liberate this potential and make our capability available to all our customers.”