Cranswick to double poultry output and automate further
The meat processor – which took home the Sustainability Award at this years’ Food Manufacture Excellence Awards – had demonstrated its ability to weather recent input cost rises and capability to grow in the poultry category, according to Panmure partner Matthew Webb. This was supported by continued investment in its fresh poultry plant in Eye.
“We expect the next phase of expansion to double its share of UK poultry output from the current 7%, while the new prepared plant in Hull with help it continue to pursue its successful strategy of expanding its offering of value-added (and therefore higher margin) products,” said Webb.
He also highlighted the highly automated nature of Cranswick’s operating model, but argued that there were still parts of the process that could be further automated – a notion he claimed Cranswick agreed with.
Automating manual tasks
“Some tasks, such as those requiring fine cutting and quality checks, will presumably be done manually for the foreseeable future,” Webb added. “However, other tasks being performed manually seemed to involve basic moving of meat from one part of the process to another and the packing of final product into crates.
“With both the cost and availability of labour having deteriorated, we expect Cranswick to continue to invest in automation, allowing labour to be redeployed to support further growth.”
Webb went on to mention how Cranswick expected demand to grow, particularly in the current environment of falling incomes. He saw foresaw Cranswick performing favourably against market leader 2 Sisters Food Group, based its debt burden constraining its ability to invest.
While expansion of Cranswick’s Eye plant was on the agenda, the poultry processor has yet to announce a timeline for this sort of investment to take place – the main reason being it was already focused on its two new facilities in Hull, Gourmet Kitchen and Prepared poultry, and the supply chain disruption caused by the pandemic.
Pet food integration
Webb also observed Cranswick’s plans to further integrate its existing business with the recently acquired Grove Pet Foods.
“The rationale for the acquisition of Grove Pet Foods became Clearer on the trip, with the combination of what looked like a well invested facility, and the fact that 25% of the weight of animals killed goes into pet food, creating significant synergies with Cranswick’s existing business,” said Webb.
“Canswick plans to expand from the current focus on kibble production into wet dog food to increase the synergy opportunity.”
Panmure advised that now was a good time to buy shares in Cranswick.
