The image of a woman who stays at home and bakes may seem more than a little outdated to some, but when it comes to the US, home baking ingredients mean big bucks.
Renshaw's Liverpool, UK-based business boasts a great following in the US where it supplies fondant icing to a major home baking brand. "Ladies in the US like to make cake for everyone who comes round and they like to judge each other's baking," says head of new product development Tom Shaw. "American cakes are 14 inches wide so they need a versatile icing that will stretch over them."
And it's not just US consumers who are into home baking. Market analyst Mintel valued the UK home baking market at £419M in 2005 and predicts it will grow 20% by 2011. This bodes well for Renshaw which supplies sugar paste for Dr Oetker's UK home baking brand Supercook.
But it's not all good news for the firm, which witnessed a sales dip during the first half of the year. In its latest financial statement, parent firm Real Good Food Company (RGFC) noted that Renshaw's sales had been "slower than anticipated in the first half of the year and are down slightly on last year"
However, RGFC is confident that Renshaw will pull through. "Operating efficiencies are continuing to improve and the benefits of this will be seen in the second half as volumes increase," it said. "Service levels and stock planning remain the priority to ensure that a strong platform is in place for the key Christmas trading period of the business and beyond."
So the pressure is on for Renshaw to perform and it's all hands on deck as Christmas approaches. Approximately 150 employees and 75 temps are working at the factory, which makes caramel, marzipan and sugar paste, and process efficiency is a key priority.
"We've improved the overall equipment effectiveness (OEE) of the plant from 50% to 70%, which was achieved by over 20 line leaders training at Liverpool John Moores University," says factory manager Dave Harris.
The company benefited from a bespoke management development programme designed by the university as part of its Skill Investor project.
"Since the RGFC acquisition (in September 2005) we're seeing a lot more lean management on the factory floor. In the past there hasn't always been as much to invest," says Shaw. And the company is still striving to improve its performance. "Our target OEE is 75%, so we'll be revising the university arrangement," adds Harris.
The firm's most reliable equipment is on its caramel line where the machinery has 85% OEE and processes 850kg/h. "Caramel used to be a manual process, but a £1M investment means it's more automated and therefore more efficient," says Harris.
There are around 10 different types of caramels, all with different sugar densities, or TDS (total dissolved solids), thickness and colour, so caramel production is a skill that requires precision, explains Harris.First, butter and palm oil are melted in a tank and then sugar is added. The sugar is dissolved at 80°C and then ingredients such as pectin, salt and milk are added.
Getting the right consistency is key, he says. "For example, glucose syrup is used to make injectable caramel and, because it's thinner, it requires less condensed milk."
Mastering the texture is also an issue with sugar paste. "In the UK, 90% of our marzipan goes onto Christmas cakes," says Shaw. "We feel more comfy in this area because it is generally out of sight, whereas the appearance of sugar paste is important.It is always the outer layer on a product."
The firm produces 9,000t of sugar paste a year. Production is spread across seven Z-arm mixers, so-called because of the shape of the blades. Six work on traditional sugar paste in various colours and one makes thicker paste, which is used for transfers and photos. "As part of a £0.5M project, we're using an automatic dosage system for heavy paste," says Harris.
The company has also invested in new stir bunkers, which agitate icing sugar and keep it fluid. "We already mill our own sugar and now we'll be producing 600kg/h of product on average, although the machinery is capable of delivering 2.5t/h," he says.
"We've also invested in bagging equipment, which means we can now package icing sugar into 25kg and 1t bags for use within the group."
Renshaw is aware that it has not always paid enough attention to the needs of the manufacturers it supplies, but this is changing under RGFC's ownership.
"Our previous owner, Hero, was more focused on retail. It neglected an important core - manufacturers," says Shaw. Manufacturers make up 40% of Renshaw's customer base.
Today, the firm is committed to working closely with customers to help them get the best out of Renshaw's ingredients. Its new product development department deals with both Renshaw's Liverpool factory and also its Carluke factory, near Glasgow, Scotland, which specialises in jam and has recently invested in a new chocolate refinery.
Shaw's back ground is in confectionery and he openly admits that he was expecting his role at Renshaw to be less challenging. "I thought ambient products were going to be a doddle, but it can be very complex," he says. "Say, for example, when you get sugar from a different supplier and it mills differently."
Natural vs artificial
The firm has been greatly affected by the recent trend towards natural colours. But Shaw is less than impressed with natural colours. "The mark up is huge. You get less bang for your buck and a shorter shelf-life." Chlorophyll from grass gives a khaki green, but manufacturers don't want brighter copper-based greens in their products because they are seen as unnatural.
"The perception is that all artificial colours are bad for you - they're not! " says Shaw. "Just because something is in a plant doesn't mean it's good for you. Look at the guy who lived on carrot juice - that was natural and it killed him!"
The removal of hydrogenated fats from products has also been a key focus at Renshaw, but Shaw claims that fat companies are way behind the demands of the consumer. He says some fats are naturally non-hydrogenated like palm oil in caramel, but that it's unpalatable in other products and isn't firm enough. For example, with soft fats the product has to be cooled to create the right crystallisation to taste good, but many artisanal bakers don't have cooling tunnels, so the product ends up blooming, he claims.
"Another problem for bakers is the cake mix going off too quickly. Usually with the right fat it would last 12 months, but with non-hydrogenated fat, it will only last three."
However, in the last six months, Shaw claims that Renshaw has had a breakthrough. It has found a supplier who can provide fat which behaves more like hydrogenated palm kernel oil and doesn't have to be cooled.
And it's not just reformulation that Renshaw assists manufacturers with. The company also has big ideas on the innovation front and is looking to see if it's possible to make a water-based chocolate product. "This would be very versatile and wouldn't need tempering, plus hopefully it would be more cost efficient," says Shaw.
Another concept is a chocolate coating application for ice-cream. "The worst thing about biting into chocolate coated ice-cream is when you get chocolate stuck to your teeth, so we're looking into the concept of a chocolate that melts at the same time as the ice-cream," says Shaw.
Although the firm's sugar paste business is doing well, the company has its sights set on other markets. "We produce more sugar paste than anything else. It makes up about 40% of our produce," says Shaw.
"But we want to get away from just sugar paste and marzipan and see growth in other areas. Sugar paste as a proportion of our business will diminish over the years."
In its attempt to branch out, the company is entering food service for the first time, with a particular emphasis on the hot drinks market. "A new category for us is producing syrups for coffee," says Shaw. "There's been an explosion in coffee shops recently. Also, one of our customers has just launched a luxury Belgian chocolate concentrate into a pub chain to make a frothy hot chocolate."
So be it home baking or café culture, a spoonful of sugar goes a long way. And regardless of which direction the company takes, as long as it keeps on top of consumers trends, then Renshaw can look forward to a healthy future.