Bosses at Big Bear are back on the acquisition trail just weeks after snapping up Sugar Puffs and Harvest Cereal Bars, in a bid to create a £100M ambient branded food business suitable for a stock market flotation.
Big Bear, formed in 2003 to acquire Fox's Confectionery from Northern Foods, is out to buy and build under-invested, "unloved" heritage brands with price tags of between £5M and £25M, said chairman Paul Wilkinson.
"We are not competing with the likes of Premier Foods," he said. "We are going for brands just under their radar. If we can build up Big Bear to around £100M, then we'll think about a listing."
The combined turnover of the Sugar Puffs, Harvest Cereal Bars and Fox's Confectionery business was around £45M, said Wilkinson, a former executive chairman at RHM and chairman of the sector skills council Improve.
"Pepsico had stopped investing in Sugar Puffs," he said. "It stagnated for a couple of years, although sales have picked up this year. We are going to target lapsed users, particularly the over-45s, and focus marketing on the honey monster." The Harvest chewy bars were "going like a train" he said.
"We have proved with Fox's that we can take brands with latent potential and drive sales," he added. "First, it was a case of stabilising the business, then re-engaging consumers with repackaging and marketing before finally pushing the distribution pedal. Now we're generating double-digit sales growth."
Big Bear had also improved operations at Fox's in Leicester, he claimed. "We have invested in some kit, notably a £1M robotic picking system for coated nuts. However, it's mostly been about driving up productivity and equipment effectiveness through leveraging what we have and training staff properly."