Earlier this month, Japanese food group Mizkan acquired Premier Foods plc’s vinegar and sour pickles business in the UK, including the Sarson’s and Haywards brands. In the latest just the answer interview, Mizkan Euro-Americas president Craig Smith tells Michelle Russell what the company’s plans are for the brands and about its long-term ambitions in Europe and beyond.

just-food: Can you tell me what attracted you to Premier Foods‘ brands?

Smith: We’re a condiments company and that’s our sweet spot. We’ve been making vinegar for over 200 years and most of the products we make all use vinegar as a key ingredient, so we’ve been watching those brands for a number of years, waiting for the right time to buy them.

just-food: Is this the first acquisition for Mizkan in the UK since acquiring the Manor Vinegar Brewery from Greencore in 2002?

Smith: In the UK yes, this will be the second one for us there.

just-food: Why have you left it so long to make another acquisition in the UK?

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Smith: It’s a combination of things. I was hired 11 years ago to build our North American business and once we’d got that to a critical scale then it was always our intention to expand into the UK and Europe. We’ve actually tried to buy those brands from Premier for several years but the timing wasn’t right for them. So it’s always been our intention [to make acquisitions]. We have a number of other acquisition candidates as well. The hope is that we can build the UK organisation to a scale that is similar to North America and use the economies of scale to introduce new products to the consumers that haven’t been done before and we’ve got a whole array of products here in North America, many of which would probably translate very well for the UK consumer.

just-food: Can you expand any further on what your acquisition targets are?

Smith: They will be in the condiments category. We have two active ones right now that we are beginning the process on. There is no telling where they will go but certainly we can’t disclose that due to the agreement we have with the potential sellers.

just-food: Are these acquisition targets specifically in the UK, or in Europe or North America?

Smith: These are UK-based companies.

just-food: There appears to be a growing trend of companies in the East buying in the West, for example Indian leisure company India Hospitality Corp acquiring UK convenience food producer Adelie Food Holdings in April. Is this something Mizkan is seeing more of and participating more in given its Japanese roots?

Smith: As a group, Mizkan’s entities are trying to globalise and have been over the last 30 years and we have done so very methodically. Rather than taking a shotgun approach we try to stay within our core sweet spot of condiments and it’s worked out very well. The intention now is to go beyond our traditional markets. We’ll probably be expanding into the continent in the future too, but right now the UK is our primary focus. We are also doing forays into South America and Mexico, but again we want to stay within the sweet spot where we understand the consumer first and then, as those opportunities become mature, we’ll move more into the third-world where the eating practices are quite a bit different and we have a steeper learning curve.

just-food: Mizkan has described itself as operating mainly as a branded company. The transaction with Premier Foods includes private-label assets in the UK. I understand Mizkan already operates in private label in the US, but is this a first for for Mizkan in the UK?

Smith: We have quite a lot of private label in North America and a tremendous amount of private label in the UK. It’s a good solid business, but our long-term projection for the future really depends on brand growth not private label growth. Private-label growth in the UK is about as mature as it can possibly be. The US is also approaching maturity so we’re not looking to that to drive these acquisitions, we think the investments in the new products we launch on the branded side will be the key to our future growth.

just-food: Of the brands you bought from Premier Foods, are your plans for them domestic?

Smith: We’ll increase somewhat the exports from the UK, but certainly Haywards and Sarsons are more British-type products that have a limited market outside of the UK just because of consumer eating habits. But what we intend to do is not only continue with the traditional products those brands sell but also introduce more contemporised concepts with appeal to the younger generations.

just-food: How many manufacturing facilities does Mizkan operate in the UK? As part of the deal with Premier, I understand all employees at the brand’s site in Middleton will transfer to Mizkan?

Smith: Right now we have a facility in Burntwood [Staffordshire], then we’ll also take over the Middleton facility after the transaction closes so there’ll be two facilities. The intention is that we’ll move the production equipment from our site down to Middleton and increase the size of that plant. Typically, I have somewhat of a counter-culture theory on doing acquisitions. Most acquirers, the first thing they do is look to see if they can cut heads. We have done just the opposite here and it’s worked very well. When I took over Mizkan Americas, within the first year we increased employment by 15% and we’ve continued to do that. We will be doing something similar to that in the UK and we’ll be creating a UK headquarters in west London, so the headquarters itself will not be located in the manufacturing site because our expectation is, in the next few years, there’ll be numerous manufacturing sites in the UK and we want to make sure we have a centralised location.

just-food: How many jobs are you hoping to create through the new headquarters?

Smith: Probably in addition of 20 to 25 people.

just-food: How many additional facilities are you looking to open in the UK?

Smith: It really depends upon what the facilities are that we acquire with brands. We are really a branded company and obviously that is where we are focusing our efforts. There obviously would be some additional employment if we moved production into Middleton, what that would be I don’t know. They have a very flexible shift arrangement now and until we get our hands into things we really don’t know what the outcome will be. But we tend to operate as a de-centralised organisation. The company we have acquired is a British company, it just happens to be owned by a Japanese company. Mizkan Americas is an American company owned by a Japanese company but it’s run locally.