Butchery acquisition leads to an additional £4m increase in turnover for Harlech Foodservice
A North Wales wholesaler has added £4m to its annual turnover following the acquisition of a butchery business.
Having bought a local butchery business in 2012, the premium fresh meat category at Criccieth-based wholesaler Harlech Foodservice now accounts for approximately 16 per cent of the business’ annual turnover.
After hearing that fresh meat sales accounted for between 16 and 18 per cent of the total spend of foodservice customers, Harlech looked at ways of securing a cut of the market.
Having invested £400,000 in the butchery arm of the business over the last three years, Harlech Foodservice’s Bwydlyn-branded meat is now one of its main revenue streams, significantly contributing to an overall turnover of approximately £25m for 2015.
Ian Woodcock, purchasing director for Harlech Foodservice, said that he and joint managing director Andrew Foskett were inspired to invest in the butchery business after receiving market intelligence from Fairway Foodservice, a buying group made up of 17 independent wholesalers.
He said: “It all stemmed from a meeting with Fairway about five years ago, where Andrew and I were presented with research that 16 to 18 per cent of food spend was on fresh meat.
“It was like a eureka moment for us. After carrying out some further research into how to actually add fresh meat to our services, we purchased a local catering butchers business in Pwllheli.
“It’s taken us three or four years to get to where we are now and has taken a lot of time and resources, but it’s been fully worth the effort.
“Since buying the butchery, its turnover has grown from £500,000 to more than £4m this year, with a projected turnover of £10m by 2020.
“Having invested £400,000 to get to where we are presently, we’re planning a further £1m expansion of the butchery to cope with that projected growth.”
The Bwydlyn branded meat, named after the butcher’s shop Harlech Foodservice acquired, includes meat sourced from local producers, alongside British, Irish and an increasing variety of imported products.
Ian said: “We’re really focussed on supplying what our customers want, whether that’s sourcing really fantastic Welsh produce or good quality British meat. It’s about supplying as much as possible in one location.
“The meat opens doors to us in other areas of the business too – we’ve seen sales increase across other products on the back of its success.
“We’ve now got another Fairway Foodservice member visiting us in a few weeks to find out how we added fresh meat to our services to see if they can replicate it.
Chris Binge, managing director of Fairway Foodservice, said Harlech had provided a perfect example of a wholesaler using market research to benefit from new markets.
Chris said: “We look at data provided by Nielsen to analyse the foodservice market and see where there’s capacity for our members to expand in the marketplace.
“Our research showed that red meat accounted for between 16 and 18 per cent of the total food spend for our members’ customers, and that fresh meat presents a huge opportunity with some very good profit margins.
“A number of our members took that advice and changed the strategy of their business accordingly. Harlech is a prime example of seeing an opportunity and making it work.
“We’re always looking at the market to try and predict where it will be in five or ten years’ time, and try to guide our members on what opportunities are available.
“Relationships are so important to success in foodservice, and forming working partnerships with local butchers and suppliers, or taking a gutsy approach like Harlech and buying one out, is making a real difference to the bottom line of a number of our members.”