Premium Bakery is a growing sector with volume in commodity bakery in decline alongside growth in value as consumers migrate to higher value premium offerings both in home and increasingly out-of-home.
Premium Bakery profile 2016/2017
Divisional sales grew 15% YOY (partly a result of the Chantilly acquisition) though Haydens like for like sales were over 7% higher. Most of the growth came from established customers such as Waitrose and Marks and Spencer. Performance at Chantilly was frustrated by capacity constraints with a delay in the proposed move to a new site nearby. At Haydens a strengthened management team was in place for the final quarter.
EBITDA increased by £0.4 million despite a delay in price recovery on raw materials (butter, Haydens’ biggest raw material by value doubled in price between July and October 2016) so the strong Christmas trading period saw lower margins.