Convenience foods manufacturer Greencore has axed its pizza business in order to “clear the decks” and focus on more successful categories.
As part of a series of moves to enable continued growth, Greencore has sold its flagging UK pizza business to Pizza Canadian for an undisclosed amount.
Greencore said the business had consistently failed to deliver both in terms of performance and returns and planned to focus resources on key areas such as sandwiches, ready meals, chilled sauces and soups.
A company spokesman said the market dominance of frozen branded pizzas over own-brand ranges had created “less attractive pricing structures”, forcing the sale.
“We are effectively clearing the decks to enable the growth of the business,” he said. “We will be concentrating on our key areas as well as looking at new ones.”
In another move, Greencore has extended its position in the UK sandwich sector with the acquisition of premium sandwich business Oldfields for euro 17.3m.
Oldfields, which produces 25m sandwiches a year for the UK coffee bar sector, represented the first acquisition for Greencore since it bought Hazlewood in 2001.
Chief executive David Dilger said: “Our decision to exit the pizza business, while not made lightly, reflects the determination of the group to maintain rigorous financial discipline. Taken together these developments clearly signal our commitment to rebalance the UK portfolio towards categories where we can sustain strong leadership positions, satisfy growing consumer needs and deliver attractive returns on capital.”
Greencore, which supplies mainly own-brand foods to UK and European retailers, has also sold a small non-core deli business Feldhues to O.N Nederland, a small private investment group, for euro 10m.