Mutti is aiming for 30% sales growth this year in the UK where the Italy-headquartered tomato business has just set up a subsidiary.
Dhiresh Hirani, who will head up the unit for the UK and Ireland as managing director, said the current focus is on accelerating growth in ambient tomatoes and pasta sauces, with options for ketchup, ready-made sauces and soups further down the line.
Sales for 2023 are expected to come in at around €20m ($21.8m), covering both retail and foodservice, in a market that Mutti first entered with a “soft launch” in 2015 through its distributor and sales agent RH Amar.
Hirani told Just Food that 2015 onwards was all about gauging whether consumers “were receptive to premiumisation in what is typically a commoditised category”, before Mutti went the whole hog in 2020 with “proper investment in people and advertising”, and a TV campaign.
The UK subsidiary launches this month – Mutti’s sixth – but there are no plans for a manufacturing base. Products will still be imported from Italy and RH Amar will be retained for the logistics and warehousing functions and select sales operations.
Hirani said Mutti has set up a limited company registered with Companies House and will file its own accounts.
“We have a two-pronged subsidiary approach. We will be the sales agents where we manage the customer and category conversations with our key retailers,” Hirani explained. “When we go into a full subsidiary that’s when we would manage the logistics and the back office ourselves but that’s not our plan at the moment.
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By GlobalData“Our plan is to probably do that, should everything go well, in maybe three or four years.”
Mutti currently holds an 8% share of the UK ambient tomatoes market at retail, where the company has listings with all the major supermarket chains. It kicked off in the UK with Ocado in 2019.
Retail dominates Mutti’s sales in the UK with the out-of-home channel expected to generate €4m in sales, or about 20% of the group total in the country, Hirani said.
“Foodservice is really gaining momentum,” he added, noting Mutti’s UK focus for now is on “brand building” and increasing distribution in ambient tomatoes and pasta sauce at the retail level before introducing other products from Italy.
Family-owned Mutti generated a turnover of more than €563m in 2022 across a product range stretching from tomatoes to passata and puree, and pizza sauces and ketchup.
Hirani acknowledged that Mutti sits at the premium end of the category. But he suggested consumers are either “trading down” into private label or “trading up” as they seek to replicate the restaurant meal experience at home in the current economic environment.
“What we want to do is try to really elevate the experience of creating restaurant meals at home and that's where you start to trade up into premium quality ingredients. We also want to educate and aspire shoppers to cook with good ingredients.”
He insists sales will hold up even as the cost-of-living crunch eases.
“What we know from the data is that when people buy our product they very rarely go back to what they used to buy because they realise that the difference in quality is something they can really appreciate.
“I think the headroom is massive; it's an affordable luxury.”
Mutti’s quality and sustainability values are at the forefront of promoting the brand over other products on the market, both of which are “key pillars” on the company’s agenda, from farm-to-fork, Hirani said.
Ketchup is an area where Mutti wants to expand in the future. The business currently has a listing for tomato sauce with Asda.
“There are some hidden gems that we've got within our portfolio that we just need to bring to the market at the right time,” Hirani added.
