How’s business looking at the moment? Has this been a good or a hard year and how is the tough economy affecting you?
Business is good at Branston. Sales of potatoes have remained fairly constant, and haven’t quite risen to the extent they did in the last recession. Then, the trend for cooking from scratch seemed to enjoy a revival and many consumers rediscovered fresh potatoes as a cost-effective way to feed the family. This time, there’s a slight shift in emphasis: consumers may have re-evaluated their spending, but they are eating more prepared foods and ready meals.
There are two sides to this: people want to be thrifty and avoid waste, but at the same time they still want to be able to treat themselves. So prepared potato sales (and the lines we’ve recently launched into the convenience sector) are more buoyant for us, which is encouraging. Our prepared foods factory in Lincolnshire is doing really well. We produce 13 different lines - around a quarter of a million packs a week.
One of the problems the fresh potato industry faces is that potatoes can take more time to prepare than some other foods. There’s definitely that perception out there - especially among the younger generation. And some people say that producing ready-prepared potatoes is perpetuating this and encouraging consumers to be lazy. But really, it’s about giving them choice and more opportunities to include potatoes in their meals.
Is the double-dip recession likely to change anything either from a potato production or sales point of view?
No, a double dip doesn’t have any effect. A double-dip recession may take longer for the country to recover, which may have an effect on the general economy - but it won’t affect sales any more than an ordinary recession.
At a recent conference a supermarket buyer described the potato sector as being in an extremely difficult position at the moment in terms of supply balance. How do you see the situation?
For the remainder of this season - the crop year we are in now - our supplies are secure and we don’t see many problems.
We are concerned about the following season though. Earlier in the year we were worried about the drought in some areas, but now it’s the recent wet weather that has affected planting. Growers are behind with planting, which will inevitably bring yield penalties.
What we are more concerned about is that in the medium term, there’s high competition for good potato-growing land from other crops, including cereals and biomass crops. Farmers are looking at other crops that are less risky than potatoes and this is a concern for the whole of the industry.Most of our supply comes from our producer group growers. They’re based around each of our sites and 80 per cent of our raw material is sourced within 50 miles of each site. We’ve built up longstanding relationships with our suppliers and we work hard to make our contracts fair and attractive.
We’re also increasing the area of potatoes that we grow ourselves. Some of this is for crisping, but we’re also growing some of our own ware varieties near to our sites in Lincoln and the South West.
Do you have any company news or investments to tell us about?
Over the last four years, we have made a £20 million capital investment over all three of our sites.
A recent project saw a £1.4m extension and refurbishment of our potato packing factory in Ilminster in Somerset, to increase the site’s future efficiency. The work will make the factory more environmentally and economically efficient, and follows on from the installation of a £1m water recycling plant at the site last year.
In Lincolnshire, we’ve invested £5m in our prepared foods factory. It’s expanding rapidly and we are now looking at the possibility of an extension. We have also spent £2m on green technologies on the site.
We are spending a great deal of money on a number of new lines and packaging across all our sites.
Do you have any new product developments in the pipeline? Which areas of the potato market have most potential for growth?
Investment in NPD and innovation are vital to keep ahead - and we have lots of ideas in the pipeline at the moment. This week, for example, we are bringing out some more new products for Tesco - including honey mustard potato pouches, fresh filled jacket potatoes, Blue Belle wedges and a great new kit that can be personalised at home to create dauphinoise, boulangere or pomodoro roast potatoes.
On the prepared side, there is always demand for really good, new product ideas - and that’s where we see the most growth. As for growth in the fresh potato market, we are always on the look out for a variety that could be ‘the next Exquisa’ - a Tesco Finest variety that has been hugely successful.
Other new products include reclosable packaging for Booker. We’re delighted to be working with Booker, which is a company seeing tremendous growth in the cash and carry sector.
What are you working on from an environmental perspective?
Branston has an ongoing commitment to reducing its carbon footprint and continually invests at its sites to reduce energy consumption.
In fact, we were the first food producer in the UK to receive the Carbon Trust Standard in recognition of our environmental initiatives. In Lincoln, we are coming up to the second anniversary of our anaerobic digestion (AD) plant which was commissioned in 2010 after identifying that outgrade potatoes and the waste generated in the production of prepared potato products could be used to help cut costs.
This organic waste is fed in to the AD plant and it generates more than half of the total electricity requirements of the site. Now we are looking at ways the digestate from the AD plant can be used to spread on the land as a very valuable fertiliser.
We have also installed 638 solar PV panels to the roof of our coldstore, which can house up to 11,000 tonnes of potatoes at any one time. We anticipate that the PV panels will save 10 per cent on coldstore energy costs.
As well as this, our multi-million pound investment included an innovative water recycling system in Lincoln which to date is reducing Branston’s mains water consumption by over 60 per cent every day.
What marketing plans do you have for this year, and do you feel the industry is doing enough to promote potatoes?
The Potato Council works hard to promote potatoes. They recently did some interesting research into potatoes and as reported in the national press just last week, researchers found that the potato is the ultimate super food! The council was looking to dispel the dieting myths about potatoes. But then I would agree that potatoes are a very good value food which, in a recession, people need to eat more of.
We’re keen to market potatoes to the younger generation - one way we do that is through our lorry liveries. Our eye-catching liveries, which recently won an industry award, are really popular and we get great feedback. They feature great designs and engaging messages which the public seem to love. We’ve just launched three new ones for this year - celebrating the Diamond Jubilee, supporting the Olympics and one featuring Exquisa - the first potato to make it into the Tesco Finest range. -
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