Ingredients and creativity plump sales for poultry firm

By Jess Halliday

- Last updated on GMT

Related tags: Meat, Livestock, Supply and demand

Rectory Foods is eyeing up another year of bumper sales, despite the recession taking its toll on many in the sector. Its secret? Branching out into ingredients and responding quickly to market changes.

The UK-based company, which started out in 1996, saw sales of £26m in 2009 – 18 per cent up on the previous year. It is now investing in new equipment, taking on more staff, and building its product portfolio.

Company founder and director Charles Woolley has a background in poultry, and the company supplies poultry meat to broad base of customers in the food chain: manufacturing and co-packing; wholesale; food service; institutions; butchers; and retail.

Two years ago he decided to branch out into frozen and dried ingredients too, a decision taken partly to give the company some protection from high profile issues with animal products – such as like BSE, foot and mouth, avian flu and salmonella in eggs – which have all caused dips in the market in the past, even for companies whose own products are not affected.

“I felt the business was fairly vulnerable to fluctuations, as we can’t influence them. They are out of our control,”​ he said.

In addition, the new divisions for ingredients, and fresh and frozen fruits and vegetables, make sense for Rectory Foods’ ready meal customers, as they can purchase more of the components they need from one supplier. New offerings include lentils, sunflower seeds, broccoli, garlic and ginger

Early warning

Nonetheless, Rectory Foods did take some positive action to stave off the worst effects of the recession.

“We anticipated the recession as much as we could,”​ said Woolley.

With the collapse of Bare Sterns and Lehman Brothers, “we took the decision to tighten up in credit control and credit management. We did anticipate issues with people who couldn’t get finance, and shed some customers.”

Woolley was also able to bring in some changes in the products offered. Noticing that the retail market was turning towards discounters, “we were able to source cheaper products that the market wanted,” ​he said.

Where next?

Now the economy’s bite appears to be easing off, the higher quality poultry market is rebounding. “There is now less demand now in discount stores”.

But one area in which Woolley expects recovery to be slower is organic, both for meat and for vegetables.

“Over the next few years we expect the organic side of the business will be fairly quiet, One per cent of our sales are organic, it was never a side we have found that interesting for us.

The organic side will take 2 to 3 years to be back on stream,”​ he said.

In the meantime, there are some concerns about poultry prices in general, as birds from Asia and South America are now commanding higher prices and the effect is hitting Europe.

Not only are feed costs higher, but factories in Thailand and Brazil, in particular, have been producing meat to Western tastes for some time. But consumers there are adopting more Western tastes, more of the products are being used to serve domestic demand and less is available for export.

At the same time, with demand high in Europe people are looking to those countries for cheaper production.

But “they are no fools, they are putting the prices up accordingly”,​ Woolley said.

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