Weetabix Invests in UK Manufacturing Sites but Warns of Potential Price Hike

4925a386-e6fb-4075-aca4-433c0dc58ab3articleimage.jpg

31 Jan 2017 --- Cereal giant Weetabix has announced a £30 million (US$37 million) capital investment program across its British manufacturing sites which will create a new production capacity by 2018 to keep pace with increasing sales domestically and overseas. The investment comes on the back of Weetabix’s UK market share for cereals and drinks rising from 15.3% to 16.4% in the past year.

However, Giles Turrell, the chief executive of Weetabix, said prices of Weetabix could rise, although this would be a last resort and any increase would be minimal. 

Even if Weetabix wheat is sourced from the UK, it is priced in dollars and the weak pound means more investment to buy the cereal grain. 

Just last week Weetabix reaffirmed its commitment to sourcing wheat from farmers located within a 50 mile radius of its factory in Northamptonshire, England, but nevertheless the commodity is still priced in dollars. 

The overall level of inflation rose by 1.6 per cent last month, up from 1.2 per cent on the previous month. 

He made the comments about a potential price increase caused by the fallout of Brexit while speaking to the BBC. 

The capital investment program relates to UK manufacturing sites in Burton Latimer and Corby and will lead to new jobs and follows the launch of Weetabix Protein which added £7 million (US$8.7 million) to sales in 2016, and was the biggest new cereal launch in the category.

“We’ve consistently bucked the market, through our innovation and focus on nutritionally strong products that taste great. We have been successful in increasing our sales of brands such as Weetabix and Alpen, with consumers trusting us to deliver best in class nutrition and taste,” says Giles Turrell, CEO of Weetabix Food Company.

The company employs 1,100 people in the UK, including 800 in manufacturing, and 1,800 globally.

The investment news was welcomed by Philip Hollobone MP for the Kettering Constituency.

“As someone who eats Weetabix every day I am delighted at this new investment in the local economy and am confident that Weetabix has a bright future ahead of it,” he said.

Alongside cereals, Weetabix runs a breakfast drinks business. Weetabix On the Go, has grown rapidly, recently selling its 18 millionth bottle. As a standalone brand it would now be in the top 20 breakfast brands having grown 70% in 2016. 

UK Plant Protection

Meanwhile the impact that Brexit may have on UK plant protection is being explored in the latest edition of Horizon reports from the Agriculture and Horticulture Development Board (AHDB). It looks at the various pieces of legislation impacting the use of plant Protection Products (PPPs) in the UK and puts forward four broad options for post-Brexit regulation.

PPPs currently go through a harmonized process throughout Europe, with active substances receiving general approval at EU level and specific product uses controlled at national level. Strict hazard-based criteria mean about 58 per cent of applications are rejected by the EU, which has implications in terms of time and associated costs.

The number of available PPPs and their efficacy are being pressured by an increasingly challenging regulatory environment and the growing resistance of pests, diseases and weeds to products now on the market.

“There is immense complexity in this area of regulation in terms of the UK’s obligations at both EU and international level. Although plant protection may not be at the top of the priority list for negotiators, the continued supply of safe and nutritious food is of fundamental importance and these products are often key to growing healthy and profitable crops,” says Sarah Baker, AHDB Senior Analyst, who wrote the report.

“In the short term, it is likely not much will change as wider Brexit issues are more likely to take precedence but the industry cannot treat it as business as usual. The UK must start thinking about what it needs to achieve through plant protection and what might be gained from a new regulatory framework. 

“This will involve balancing myriad interests, including the UK’s reputation in the global marketplace, how UK farming and growing businesses remain economically viable, environmental considerations and customer preference.”

To contact our editorial team please email us at editorial@cnsmedia.com

Related Articles

Food Ingredients News

A turning point in history? World Food Day shines a light on eradicating hunger, boosting nutrition and mitigating climate change

16 Oct 2018 --- As the dust settles after last week’s stark warnings from climate change experts about how future drought, high temperatures and extreme weather events could seriously impact crops and supply chains, attention turns to World Food Day (WFD) which is being marked today with a campaign to eradicate hunger. Once again food security is on the agenda as key players meet in Rome to mark the day and urge a greater awareness and action for those who suffer from hunger and to ensure food security and nutritious diets for all.

Food Ingredients News

Irish Minister launches dairy research center, reinforces commitment to agri-food sector

16 Oct 2018 --- The Irish Minister for Agriculture, Food and the Marine, Michael Creed TD, has launched the new VistaMilk SFI Research Centre which is jointly funded by Science Foundation Ireland (SFI) and his department. The VistaMilk Centre will be hosted by Teagasc Moorepark (Co. Cork), in partnership with a number of research performing organizations, multinational and SME companies in the food sectors are also part of the consortium.

Food Ingredients News

Beer shortages? Study reveals climate change could affect global beer supply

15 Oct 2018 --- Severe climate events could cause shortages in the global beer supply, according to new research involving the University of East Anglia (UEA). The study warns that increasingly widespread and severe drought and heat may cause substantial decreases in barley yields worldwide, affecting the supply used to make beer. This will ultimately result in “dramatic” declines in beer consumption and rises in beer prices.

Food Ingredients News

Start-up focus: US-based Variety Fun targets healthy and convenient snacks market, direct to your door

15 Oct 2018 --- Two entrepreneurs have turned their US$165,000 investment into a millennial-favorite snack subscription box, that is now projecting US$12 million dollars in sales for 2018 and over 500,000 boxes sold on Amazon. According to the company, Variety Fun’s subscription service delivers an assortment of snacks to US offices, improving workplace culture and boosting employee morale. Variety Fun is a snack subscription box that curates “hundreds of the best-tasting, classic and nutritional brands,” including Popcorners, Hippeas, and Popchips, for offices in the US. By partnering with over 500 snack brands, the company offers businesses the most affordable and convenient subscription snack service with the most extensive selection.

Food Ingredients News

Asia’s fast-moving cheese markets present opportunities for Australian dairy exporters, says Rabobank report

12 Oct 2018 --- There is plenty of room for robust growth in Asia’s cheese market, particularly for Australian dairy exporters who are well-placed to take advantage of increasing demand for cheese, even though it’s not a traditional part of the Asian diet. Market competition is already intensifying and there are opportunities to tap into growing demand from Asia, according to a new Rabobank report.

More Articles