Quorn Foods, the UK-based meat-free supplier, has enjoyed solid growth in recent years on the back of growing consumer interest in reducing – or eliminating – meat from their diet. Now owned by Philippines-based Monde Nissin after a deal last autumn, Quorn expects its expansion to continue, CEO Kevin Brennan and Andrew Staal, the company’s international director, tells John Shepherd.
After solid growth in recent years under private-equity ownership, UK-based meat-substitute business Quorn Foods expects its strong performance to continue under the stewardship of Philippines-based Monde Nissin, CEO Kevin Brennan tells just-food.
Brennan, the former Kellogg executive who joined Quorn in 2010 when it was owned by Premier Foods plc just before its sale to Exponent Private Equity, says he expects to see strong growth in the UK and internationally of around 10% for 2016 – and “closer to 15% for 2017”.
Brennan did not provide specific figures for Quorn’s forecast sales but said the projected level of growth for a food company was “exceptional”. He added: “The trend to cutting back on meat is widespread and gaining momentum. If we keep investing in the brand then we should be able to make it an increasingly mainstream brand.”
Brennan’s remarks came just nine months after Quorn announced it was being acquired by Philippines group Monde Nissin in a deal valuing the company at GBP550m (US$831.2m). Quorn’s sales hit GBP150.3m in 2014, the last year for which financial data on the privately-owned business is available. That equated to growth of 6.5% on 2013, a year when Quorn had seen its sales increase 7%.
Monde Nissin has brought “a willingness to invest in the long-term potential of the business”, Brennan says. “Secondly, they have expertise in Asia and we have known about the potential for Quorn there but now we can exploit it.”
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Quorn exports its products from its manufacturing base in north-east England. Quorn said there are no immediate plans for the company to have manufacturing plants in more markets but added: “In a ten-year horizon we may look at overseas facilities. At the moment we are expanding UK capacity significantly.”
Nevertheless, for all Quorn’s forecasts for continued solid growth at the business, the company, which is building its business outside the UK, will be watching events in the wake of the country’s vote to leave the EU very closely.
“Like everyone we are digesting the impact of the result. Clearly remaining would have provided greater clarity and less uncertainty,” Brennan says.
When in February just-food weighed up what impact a Brexit vote could have, Brennan said Quorn wanted the UK to remain in the EU. “Europe is our largest export market with huge potential. A move out of the EU would undoubtedly make expanding this business more difficult so we are strong supporters of staying in the EU.”
In the immediate aftermath of Thursday’s vote Brennan tries to strike a more upbeat tone. “We are confident that trading solutions will be found between UK and EU over the next two-plus years that will enable us to continue to grow our business in this region as well as elsewhere.”
Brennan says, overall, European markets remain “exciting” sales territory for Quorn, which he said, “has been growing strongly in most markets and which is expected to continue for the next few years”.
However, Brennan says the US is the company’s biggest market outside the UK. “There we have huge potential to gain share, given our product superiority,” he insisted. “Business is progressing well and set for our biggest growth ever this year. We are committed to investing to further expand there.”
Andrew Staal, Quorn’s international director, notes exports comprise around 20% of the company’s overall business today. Staal says the company is currently focusing on its newest European market, Italy, which Quorn entered towards the end of last year. “We already have a local representative there and we are winning deals,” he says.
Staal, who joined Quorn as international director in 2013, indicates the company is looking to support its growth in the UK and in international markets with further spending on developing its vegan portfolio. He said Quorn put “significant” investment into the vegan market when the company entered the sector last year, after removing egg content from the product that had been used as a binder for ingredients. “After years of development we launched five to six vegan products in South Africa, Sweden, Australia and, in the last quarter, the UK,” Staal notes.
He says that while vegetarians already use Quorn products, vegans were “more restricted still” in the products they could opt for. Staal expects the vegan range to increasingly appeal to this sector of the market.
Brennan adds: “We have a big focus on our vegan range, as we are only just launching in most markets, but sales rates are outstanding.” More products, including a vegan fish finger, are expected to be added to the range.
Under new ownership, Quorn’s development appears set to continue at a good pace.