PostBrexit raw material costs, portion control and resealable bags are key concerns in the current confectionery market climate, according to Scottish private label confectioner Aldomak.
In an exclusive interview with the company, which makes tablets, fudge and macaroons, David Lang, production manager and David Clark, quality manager, talk to ConfectioneryNews about what we can expect to see more of in the coming years.
Raw material prices
The shock postBrexit result is not far from their minds, with the pair agreeing raw material prices will be affected.
According to Credit Suisse, manufacturers could be impacted by a potential recession in the UK, higher raw material costs, and increased tariffs across Europe. Companies could, in turn, pass higher costs along to consumers through price adjustments in the near to medium term, it says.
“Personally, I voted to remain, I thought we would have stayed in [just] I think it is very hard to tell, it’s the unknown we have to keep very focused and ride out what will certainly be a topsy turvy period. Raw material prices in particular could have quite a dramatic effect on company performance if they go the ‘wrong” way,'” said Lang.
“I am concerned the Brexit vote may affect the price of raw materials used in our products. We always want to ensure that our products are competitively priced,” added Clark.
The duo were recently hired by Aldomak, based in Glasgow, to strengthen its management team. The company is predicting 50%sales growth this year , projecting sales of £1.9m ($2.8m) for 2017 on the back of a slew of contract wins and increased activity with existing clients.
It reported a turnover of £1.2m ($1.7m) to April this year, which is an increase of £1m ($1.4m) in 201415 and £750,000 ($1m) the year before.
Laing, who has over 30 years’ experience in the food industry, including at Brownings the Baker and Vion Foods, will assume responsibility for the firm’s increasing production.
“The biggest changes I have seen in the industry in that time are customers require suppliers to be more flexible and agile in their approach to supply. You always have to be looking ahead and, if you like in some cases, second guessing what your customers are going to require, e.g. in some cases lead times are very short which is indicative of the competition both suppliers and customers are under,” he said.
Stricter food safety regulations
“Also, of course, there is the issue of ever decreasing erosion of margins which means you have to be continually looking for areas of improvement. The one thing that I don’t think has or will change is the need for good people, people really are key.”
Clark, who graduated from University of Strathclyde in 1985 with a BSc in Chemistry, and formerly worked for Finsbury Food Group, started his career with Associated British Foods (ABF) carrying out food analysis and auditing companies within the ABF group.
“I moved back to Scotland and worked with an independent family bakery company in the technical department. I have always worked in bread and cake manufacturing, so handmade confectionery is something new and presents different challenges,” he added “Food safety regulations have become stricter over the years and retail customers require manufacturers to maintain high standards at all times.
According to Clark, customers are looking for portion control with confectionery products.
“Smaller sized bars and resealable bags are popular. Customers are also more aware of the sugar content within all food products including confectionery,” he said.
As part of Aldomak’s predicted 50~% sales growth, Dario Riccomini, MD, said the company plans to expand overseas and introduce new brands to its portfolio. It was awarded provisional entrylevel status by the British Retail Consortium (BRC) and is on track to achieve full BRC accreditation later this year.
“Growth will come from different streams, from existing customers growth which will impact positively on us and with our BRC status we are certain new doors will open to us including additional major retailers and food service,” added Laing.
Source: Confectionery news
