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August 18, 2022

Orchard House Foods to close loss-making UK plant

The food-and-beverage business, bought by private equity last year, cited “a series of economic and business challenges”.

By Dean Best

Orchard House Foods, the UK food-and-drinks supplier, is to shut one of its four production facilities.

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The company, sold by US group Hain Celestial to private-equity firm Elaghmore a year ago, is to close a plant in Gateshead in north-eastern England.

Orchard House Foods said the loss-making factory continued to be in the red despite “significant investments”. Up to 430 staff could be made redundant. Overall, the company employs 1,000 permanent workers across its operations.

In a statement, the business, which supplies prepared fruit, fruit drinks and fruit yogurts to UK grocers and foodservice operators, said it “expects that a significant number of new jobs will be created” at its remaining factories in Corby. Orchard House Foods has its head office in the town and plans to re-open a production line at one of its three sites in Corby as part of the changes.

“Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long-term,” Orchard House Foods chief executive Steve Corby said.

“As such, we believe that the future of the business lies in consolidation, so we are starting a review process in consultation with our staff and proposing to amalgamate production from our Gateshead site at our other fruit processing facility in Corby.

“This is not a decision we have taken lightly and comes off the back of an incredibly challenging period for the sector. Like many other businesses across the UK, we have been suffering from a series of economic and business challenges. They include rising energy, raw material, transport and labour costs. There has also been a shortage of available staff to work at our Gateshead site.”

Elaghmore bought Orchard House Foods from Hain Celestial for GBP25m (US$30.1m) in January 2021. Since the takeover, GBP6m has been invested in the soon-to-be-closed site in Gateshead, the manufacturer said.

Mr Corby joined Orchard House Foods last autumn. His most recent role was CEO of UK privately-owned chilled foods company Kanes Foods. Corby has a 30-year career encompassing Cott Beverages, Northern Foods and Greencore.

Six months earlier, former Premier Foods CEO Gavin Darby was hired to to take the role of Orchard House Foods’ chairman.

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2021 was a record-breaking year, with more businesses breaking into the billion-dollar club. Many start-ups have achieved or retained the unicorn status by the end of the year to reflect nearly a fivefold growth from that in 2020. This boom can be linked to a financing frenzy spurred by the quick adoption of technology and innovative solutions by start-ups gaining traction in response to the pandemic. However, the start-up ecosystem is now facing turbulent times for fundraising as investors seek long-term business strategies, valuations, and a route to profitability amid uncertain market circumstances. Nevertheless, 2022 has the potential to carry forward the momentum with multiple entities having a fair chance of being in the right place when aided by the right technologies. GlobalData leverages the power of alternative data to examine the health of start-ups across multiple dimensions including the quality of their innovations, market presence, and the funding they can attract. This helps our clients to analyze the disruptive potential of start-ups for early alliances, investments, and acquisition prospects to develop future-proof strategic roadmaps for a competitive advantage. Read our report and gather insights on the following topics:
  • Recent Unicorn trends
  • Unicorns in 2022
  • Future Unicorns
  • Start-ups to watch out for
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by GlobalData
Enter your details here to receive your free Whitepaper.

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