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May 19, 2011

UK: Zetar CEO Blackburn sets target for branded growth

Zetar, the UK confectioner and snack maker, is looking to drive branded sales to account for half its turnover in four years time.

By Dean Best

Zetar, the UK confectioner and snack maker, is looking to drive branded sales to account for half its turnover in four years time.

Ian Blackburn, Zetar’s chief executive, told just-food that the company wants its branded confectionery and snacks to generate 50% of its revenues in “three to four years”, up from the current level of “33-35%”.

Blackburn was speaking after Zetar, which also makes private-label confectionery and snacks for UK multiples, published a 2% increase in annual sales, which was driven by growth from the company’s confectionery division.

The Zetar chief said the firm had, over the last 12 months, been looking to sell more branded products. The company’s branded stable includes its proprietary products like Lir chocolates.

However, Zetar’s brands also include a raft of products made under licence for media giants like Pixar and for food and drink brands like Baileys and Famous Grouse.

“We have a branded model that people do not appreciate,” Blackburn said. “We are a branded player. We’re now taking that branded model into the snacks area.”

Zetar has teamed up with Premier Foods plc and has developed nuts and confectionery under the UK food group’s Branston, Sharwoods and Ambrosia brands. Retailers including Tesco, Asda and Sainsbury’s have agreed to list at least some of those new lines.

Blackburn said Zetar was keen to develop partnerships with brands that already had a “presence in the marketplace” and the company had more launches in the pipeline.

Zetar is also looking to develop its proprietary brands – like Lir and Kinnerton – products that Blackburn had admitted the company had “never really marketed before”. The firm, for example, is looking to position Lir as “affordable luxury chocolates”.

Other initiatives include continuing to promote Zetar as a supplier of “everyday” chocolates, as well as seasonal lines for Christmas and Easter.

However, Blackburn acknowledged that Zetar, along with its confectionery and snack competitors, would be operating in a context of commodity costs that have reached new, permanent, higher levels.

Cocoa prices, Blackburn said, seemed to have stablised around a “new base” of GBP2,000 (US$3,236) a tonne, up from the GBP900 seen in recent years.

The increasing cost of nuts and fruits had been “pretty unrelenting”, Blackburn noted, but “on the whole” had been “relatively stable in the last five to six weeks” and would “come off a little bit” when the yields of new crops appeared.

He added that the cost of oil was only “going to go one way” in the long term.

Blackburn insisted the prospect of permanently higher commodity costs was a factor in the drive behind Zetar’s brands. “That is one of the reasons we are going to increase our proportion of branded sales,” he noted.

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