Is now the time to take your food business global?
With UK food exports now at an all-time high of £20bn a year, could our food and drink industry become the unlikely export champion of post-Brexit Britain?
It seems so. Our chocolate Easter eggs are a must-have item in Hong Kong, Vimto is massive in the Middle East, and UK curry sauce jars are going down a storm in markets as diverse as Canada and Spain.
But why the UK, and why now?
Undoubtedly, our flair for innovation and openness imported flavours helps. For example, there are more UK food products launched in the UK every year than in France and Germany combined, and across a wider range of categories.
Secondly, many food sectors now coming on trend globally – from vegetarian ready-meals to convenience snacks – are already well-established in the UK market.
In theory, this is great news for fast-growing SMEs in the food industry. But in reality, internationalising any business is a huge risk for any company owner, resulting in many choosing this point in their business journey to search for a partner to accelerate their global ambitions.
At BCMS, we have recently helped these food businesses expand more quickly outside their home markets by finding them the right buyer.
Turnover triples for airline caterer
When Alison Lessmann sold En Route International in 2012, company turnover was £14m, with 28 employees. This year, it is expected to be around £42m, with 82 staff on the books, and new production sites in Hong Kong and Australia. Alison is still MD, and focused on growing En Route further.
Alison says: “Since the sale, the growth has been phenomenal. I used to spend so much time trying to find banks that would lend us some money to fulfil the orders that were coming in but after the sale we haven’t had to worry about money at all.”
New owner takes cake brand
Gary and Carol Brown set up cake decoration manufacturer Rainbow Dust Colours in the backroom of their bakery business in 2007. After experiencing phenomenal growth on the back of the UK’s home-baking phenomenon, in 2015 the couple sold to Real Good Food PLC, which already owned leading cake ingredients brand Renshaw’s.
Gary and Carol handed over to a new director put in place by the acquirer, and left after six months.
Two years on, and Real Good Food is preparing to launch the Renshaw and Rainbow Dust Colours brands in Australia and New Zealand. RGF’s rationale for acquiring Rainbow Dust is to transition from being a manufacturer of white label products to a brand-led player.
The link between these two different outcomes comes from finding the right buyer – someone who values the future potential inherent in many of our home-grown food businesses.
The trick is in the timing. Knowing when to stay on, when to step aside, and when to clear off, comes from a mix of business and personal circumstances unique to you. But if you are asking these questions of yourself, then it’s a clear sign that you have reached a crossroads, so it’s worth pausing to understand all your options.
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