Richmond looks to health, Europe to lift sales

Related tags Ice cream United kingdom Uk

Richmond Foods, the British ice cream manufacturer, consolidated
its position in 2004 with a rise in turnover despite less
favourable market conditions than in the previous year. And the
company is confident of further growth in 2005, with healthy
products and a possible expansion into Europe top of the agenda,
writes Chris Jones.

The hot summer of 2003 gave a major boost to British ice cream producers' sales, but this year's return to the usual wet weather in July and August meant that most companies struggled to match the previous year's performance, with total UK ice cream sales dropping 12 per cent to £1.06 billion, a level similar to that in 2002. Richmond Foods, however, bucked the downwards trend. Bolstered by additional volumes from two acquisitions (De Roma and Oldfields), and by a three-year investment programme which helped drive organic growth, the company lifted sales by 13 per cent to £143.6 million. With a share of 33.7 per cent, Richmond is now the largest company in the UK take-home market.

The growth in take-home sales was also helped by product launches (such as Yorkie and Toffee Crisp bars) and in particular by the promising performance of Skinny Cow, a low-calorie, low-fat premium ice cream produced under licence from the US group Silhouette Brands.

Sold initially through the Asda retail group, the brand proved so successful that it was rolled out to most of the other major UK multiples in 2004, and a full range of premium half-litre tubs, cones and impulse products will be launched at the beginning of 2005 - a clear indication that Richmond believes the combination of health and indulgence offered by Skinny Cow is likely to prove very popular among UK consumers.

Richmond is still keen to increase its share of the impulse market, currently standing at around 25 per cent, but with the worst weather of 2004 coming in the key consumption months of July and August, the conditions this year were far from ideal. The company nonetheless continued to develop its impulse business, consolidating sales through a smaller number of distributors and thereby cutting costs.

With a solid base in the UK take-home market on which to build, helped by its continued efforts to stimulate year-round ice cream consumption, Richmond can perhaps afford to be more adventurous in other sectors. In particular, the company has begun looking into the possibility of expanding its take-home business in the rest of Europe, where there are similar consumption patterns for ice cream as in the UK.

Ross Warburton, Richmond Foods' chairman, confirmed that the company had increased its contacts with retailers in Continental Europe, but stressed that it was still early days and that no definitive decision had as yet been made.

Related topics Manufacturers Dairy Health Check