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April 22, 2021updated 11 May 2021 3:10pm

UK’s Real Good Food sells snack-bar arm Brighter Foods to THG

By Andy Coyne

UK cake decoration and snacks company Real Good Food (RGF) has sold its snack-bar business Brighter Foods to local consumer brands group THG for GBP43m (US$59.6m).

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The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
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RGF, based in Liverpool in north-west England, owned 84.3% of the business with managers owning the rest, meaning it will pocket GBP35.6m from the sale. The company has been a majority shareholder in Brighter Foods since 2017.

In an announcement to the London Stock Exchange, on which it is listed, RGF said the deal gives it an opportunity to “crystallise an attractive return on invested capital with respect to Brighter Foods, reduce net debt, make a material contribution towards the group’s pension deficit and also to provide additional financial flexibility to support the operation and growth of the continuing group”.

Following the disposal, RGF will consist of cake decorations businesses Renshaw and Rainbow Dust Colours.

Some GBP3m of the proceeds from the deal will be used to provide working capital to support these two businesses. RGF said that as a result of the deal, its net debt is expected to reduce from GBP47.6m (as at 31 March 2021) to GBP21.2m.

After a period of financial problems, RGF has sold a number of assets in recent years in an attempt to shore up the company’s balance sheet and improve its performance.

Speaking about today's deal, Mike Holt, the company's executive chairman, said: "We are very pleased with the disposal which crystallises substantial value for the group and enables us to halve our debt burden at a stroke, whilst materially improve the funding of the pension scheme.

"It also provides a basis for further balance sheet restructuring, as we look to accelerate and maximise value within Renshaw and Rainbow Dust Colours.

"Brighter Foods is a very good business and I am sure it will continue to grow and develop with the direction and support of THG."

Matthew Moulding, executive chairman and CEO of THG, based in Manchester, also in north-west England, said: "Brighter highly complements our developed vertical integration strategy and strengthens our capabilities in the growing convenience and snack bar market.

"Nutritional bars are a high growth category for THG, with significant product extension opportunity across all our brands.

"The Brighter team bring a wealth of bar manufacturing and product development expertise, and in line with the Claremont and Berryman's acquisitions, enables THG to significantly accelerate the launch of further product innovation into global markets, while increasing the proportion of THG Nutrition products wholly manufactured in-house."

THG's nutrition portfolio already includes brands such as Myprotein, Myvegan and Myvitamins,

just-food has asked THG – formerly known as The Hut Group – to expand on its growth plans for the nutrition division.

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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