Canadian biscuit, cracker and confectionery manufacturer Dare Foods has a clear sense of ambition and a well-thought out expansion strategy. Michelle Russell talks to Dare Foods’ chairman Bill Farrell about how the company will achieve this growth, where it sees opportunities internationally and the challenges it faces.
just-food: When we spoke with you last year you said Dare Foods was focusing on the emerging BRIC economies for growth opportunities. How much progress have you made over the last 12 months?
Bill Farrell: It is still a target. From our perspective we think the international channel has a lot of potential. We sell in over 35 countries today, but we think there is a lot of [international] growth opportunity for a number of different reasons. Canada is viewed positively where food manufacturing is concerned, as is Dare Foods. We’ve got 121 years of experience. A lot of distributors globally view us as providing good food so it’s really leveraging that.
just-food: Does this include looking for M&A opportunies?
Farrell: Yes, but I don’t think the intent would be to go out and buy 100% of a business. We would consider partnering with groups because we don’t have that global expertise. We need to identify groups that have global expertise and global distribution. We are certainly looking at any investment or partnership solution where the business continues to have some economics in the business. We would then provide some capital and manufacturing expertise and capabilities. Also some branded formulation and some product that we can put into their system. That would be an ideal kind of scenario for us.
just-food: Can we expect any sizeable deals in the next six to 12 months?
Farrell: We’re looking at a number of different opportunities. Will we be announcing something in the next six months? I don’t know. I can’t really comment on that. The key takeaway here is that we’re absolutely looking for acquisition opportunities. We’re engaged on a number of different fronts and we want to continue to explore as many as we possibly can.
just-food: Do you see potential for overseas growth in all of your categories?
Farrell: Yes, in all of our categories. We are predominantly cracker as far as the international channel is concerned and we’re big in cookies, fine bread and confectionery. Really what we need to do is get some traction in that regard, so we’re working on better establishing relationships with some distributors and brokers globally and we’ve been growing our international business. We’re going to continue to focus on that strategically.
just-food: You’ve talked previously about how tough it is to get organic growth domestically. Are you finding this is still the case?
Dare Foods chairman Bill Farrell
Farrell: In order for us to be successful, we are up against the big guys like Mondelez, Kellogg and PepsiCo, so we need to be continuously innovating. We started launching product in Q1 of this year so we’ve had some very good innovation, like our new Breton Popped line which we introduced at Sial, which has done exceptionally well. We’ve also got a new fine bread product that we’ll be launching this summer that we’re very excited about. So, we’re continuously driving innovation in order to get growth but we are still very much on the lookout for acquisitions domestically. Nothing has changed in that regard. We are still looking for anything that would be speciality – speciality crackers, snacking – but something that would be core or shoulder to our existing category on the snacking side. We’re fairly active in that regard right now.
just-food: Do you see M&A and innovation as key to winning against these competitors such as Kellogg and Mondelez, or does it also come down to other strategies like cost?
Farrell: It’s a mix. In order to win against the big guys you’ve got to be nimble, you’ve got to be cost effective, you’ve got to be very innovative and you’ve got to continuously grow. You can’t take your eye off the ball. You’ve got to be growing but you’ve got to be growing through innovation and supporting your existing brand and ensuring that you’ve got healthy brands in your portfolio.
just-food: How do you plan to grow your confectionery brands, which operate in what remains a highly competitive category?
Farrell: We’re not focusing on acquiring confectionery businesses but we are absolutely focusing on building our branded confectionery business and that is one of our strategic priorities: to build Real Fruit. We’ve got a winner with this product. It’s a great brand and we really need to grow distribution for that product domestically in North America, Canada, the US … so that is a strategic priority for us. We’ve got a lot of capability right now as far as confectionery is concerned. We just need to get distribution, so we’re working hard on getting distribution on that product.
just-food: Are you unfazed by the competition from the major players in the confectionery market?
Farrell: We think we’ve got a pretty unique product and we think it’s sufficiently differentiated in being a real fruit product. There is no question. It’s like all of our categories, they are all very competitively pressured, it’s not different in confectionery to anything else.
just-food: Do you see Dare Foods diversifying and entering new categories?
Farrell: We’re really responding to the consumer needs. We’ve got a fairly disciplined programme when it comes to innovation and what we’re doing is coming up with a lot of ideas, screening them and making sure they are ideas that are resonating with the consumers. It’s all about ensuring that we can get from idea to market very quickly. That’s how we have to differentiate ourselves.
just-food: When we spoke last year, you said you were in the process of establishing a mid-term plan. Can you detail Dare’s strategic priorities in the medium term?
Farrel: It’s to continue to grow. To be focused on the international marketplace, across all of our categories. It is also about continuing to grow our base in the US and that is organically and through acquisition. It is a renewed focus on our candy business, particularly in our real fruit business. Also, to increase distribution for all of our categories, certainly in our domestic marketplace into a number of different channels… Fom a bigger picture perspective, this company has been in the Dare family for 121 years and the expectation is that we’re all hopefully and excited about the opportunity for it to be in the same family for the next 121 years.