Cake Decoration is a growing and global market with a spectrum of consumers from experts to beginners and a wide range of trade channels.

2017/2018 Performance

This year’s result for Cake Decoration was disappointing in one of the key businesses of the Group. Significant delays to the commissioning of new manufacturing equipment aimed at introducing new products, formats and a new brand, a delay in recovering commodity cost increases during the key sales period, and a significant increase in competitive intensity, particularly in the retail sector, were the most significant factors contributing to the performance. Consumer demand in the Cake Decoration category in the UK was largely flat, although consumer shopping behaviour continued to change, with footfall moving from Grocery Multiples to Discount & Bargain store channels where the range of homebaking products is more limited. During the key trading season for sweet homebaking, competitive intensity increased considerably resulting in lower selling prices across brand and own-label products. A delay in recovering commodity cost increases in sugar and dairy products further contributed to reduced margins.

A transformational capital investment programme started during the year, with a new line to produce convenience formats of Renshaw’s core product, rolled icing, and a new soft icings plant; one line is now fully operational and the other is in the final stages of commissioning. Outside the UK, the establishment of a USA-based warehouse to fulfil orders for North America was completed, leading to a one-off reduction of stock within the supply chain but consumer demand remains strong. A review of the order fulfilment model for Continental Europe customers was initiated with the aim of ensuring the division is easier to do business with and the Europe-based personnel are focused on business development. A product rebranding and relaunch exercise at Rainbow Dust was initiated with some delays experienced due to the scale and technical complexity of ensuring product compliance, particularly for export markets. The Preston manufacturing site made significant strides to ensuring it has the potential to distribute products into new channels and territories, achieving both FDA and BRC accreditations.

Forward Plans

The business is implementing plans focused on streamlining processes and resources to ensure better coordination of activity across the Cake Decoration operating units and executing a growth strategy focused on increased supply of everyday usage and convenience products under its own and retailer brands, in the UK and in selected export markets. In business-to-business, the division sees significant opportunities to leverage its long-standing industry knowledge and expertise to help cake manufacturers, for example, by delivering better value core ingredients and some new innovative products, capitalising on current cake decorating trends. Export growth is focused on North America where the division has identified significant potential to grow sales, and a plan has been developed which will see an increase in sales resource, a higher profile presence in the market and the acquisition of new customers.

Following its review of the order fulfilment model for Europe, the business has closed its Brussels warehouse and reverted to supplying product from the UK with no detriment to service levels. The Europe-based sales effort will now focus on existing and new business development. Ensuring the supply of consistently high-quality product remains the key imperative for the division and, while it values the reputation it has and the accreditations achieved, it is implementing various initiatives to ensure product quality standards continue to improve and that it leads the industry in this respect.

Cake Decoration includes the following businesses:

Renshaw manufacturers sugarpaste, marzipan, soft icings, mallows and caramels and sells across a broad range of sales channels: mainstream and specialist retail, wholesale, foodservice and food manufacturing as well as export.

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Rainbow Dust Colours produces a range of edible glitters, dusts, powders and food paints, brushes and pens for the specialist sugarcraft sector.

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Renshaw Europe sells, markets and distributes both Renshaw and Rainbow Dust products across continental Europe.

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Renshaw Americas sells, markets and distributes both Renshaw and Rainbow Dust products across the Americas.

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