Key points
In 2010 European commercial director Damien Threadgold was Amy’s Kitchen first UK employee, holed up in a small office on the outskirts of a Northamptonshire industrial site.
Three years later the US-based firm employs 45 people at its Corby manufacturing site, is experiencing 300% year-on-year sales growth and is eagerly pursing export opportunities to mainland Europe, India and China.
Not bad going for a manufacturer of frozen and ambient vegetarian and vegan ready meals and soups, which Threadgold willingly concedes is a relatively small brand in the UK competing in a niche, yet fiercely competitive sector.
“We've come a long way,” he says.
“When I first arrived we didn't have anything at all but now there has been a huge investment in the site and people so we need to keep moving in the right direction. We are fortunate as we do not need to rush and are not responsible to shareholders, but we need to show we can build a sustainable brand that is here for the long term.”
Major brand (Return to top)
While Amy’s has grown into a major $400M (£264M) brand in the US since it was set up 25 years ago by Andy and Rachel Berliner – who are still at the helm today – until recently, its UK presence was limited to wholefood stores.
A third party was responsible for importing and distributing the products until the Berliners decided the UK and Europe needed dedicated, in-house resources.
Now they have an ever-increasing number of lines in Tesco, Sainsbury and Waitrose, with Morrisons and the Co-op next on the hit list.
Its success, according to Threadgold – who counts ABF, Coca-Cola and Bespoke Foods among his previous employers – stems from "causing disruption” in the category and creating its own niche in the marketplace.
“I'm very pleased with how it has gone. Distribution-wise we have got more than I'd have hoped for. What we've got to do, as a small brand within a small but competitive grocery industry, is make everything that we have work that little bit harder. Everything I'm trying to achieve is all related to trial. If you have our food, you will enjoy it and buy it again. My job is to get that initial purchase made,” says Threadgold.
“It's competitive, but we are further forward in the UK than they were after three years with Amy’s Kitchen in the US 25 years ago.”
Threadgold has been keen to trade on the firm's history here in the UK, using packaging to focus on how it was established in the Berliner’s Californian home to provide healthy, organic and "great-tasting convenient food”.
Sourcing ingredients (Return to top)
But taking their principles and applying them to a UK manufacturing facility hasn't always been plain sailing. While the production process has remained “identical”, Threadgold admits it hasn't been easy to source the right ingredients.
“We have farmers in America who have been supplying us with tomatoes for 25 years, while tomatoes from Italy obviously taste quite different,” he says. "Likewise, some of the dairy has been better, but different here to what they have in the States, so that had an impact.
“The quality has always got to be perfect, but we have had to use different ingredients that do taste differently to create an excellent product.”
While Threadgold is able to demonstrate consistent and impressive sales growth since 2010 – it comfortably beat its sales targets for 2012 – there is no doubt it also received a boost from the horsemeat scandal.
Main concern (Return to top)
With sales soaring, Threadgold’s main concern is ensuring he can meet retailer and consumer demand. After all, Amy’s Kitchen is operating in a sector that is witnessing sustained growth with the market for vegetarian and meat-free foods increasing by 8% to £786M between 2008 and 2011. According to industry analysts, this figure will increase to £882M by 2016.
Threadgold, however, is keen to distinguish Amy's Kitchen from the other meat-free brands.
“What we don't do here, or in the US, is talk about being a vegetarian brand. We talk about being a brand that makes great-tasting food. If you talk to our millions of customers in America, most of them would have no idea we were a purely vegetarian brand, even though they have been eating our products for years,” he insists.
“The majority of vegetarian firms in the frozen sector are concerned with meat replacement products while we make great-tasting meals that just happen not to have meat in them.”
From a marketing perspective, that seems a sensible strategy, especially with the number of people who class themselves as vegetarian or vegan remaining largely static over the past decade at around 3% of the population.
Meat-free/ free-from (Return to top)
Threadgold doesn't dwell on that statistic, preferring to point to growing trends such as flexitarianism – a term for those who eat a largely vegetarian diet but occasionally eat meat – along with campaigns such as Meat Free Mondays as evidence of changing consumer preferences.
A casual glance down any frozen aisle will show you that supermarkets are also increasing their meat-free own-label range, a sure sign that is a growing market, albeit one Threadgold wants Amy’s to “add value” to by driving sales of “£3 lasagnes”, instead of £1 ones.
Threadgold classes himself as a flexitarian – saying he eats meat about once a week – and believes these trends are more than a flash in a meat-free pan.
“I don't think these are fads, I think people are realising it is not sustainable to eat as much meat as we do. People are becoming more food aware and conscious of what they eat," he says.
He also points to the rise in demand for free-from products as evidence of this, highlighting how much of Amy’s new product development work has started from customers’ demands in this area.
“We had people in the States saying they loved our mac and cheese but had been diagnosed coeliac so they couldn't eat it anymore. So we then devised a rice mac and cheese that uses rice pasta instead of wheat pasta,” he says. “We've also created a dairy-free and gluten- free version because there was a demand. This is a huge growth area and we are responding to what customers want.”
After enjoying what he terms “a manic but very exciting” three years, the signs are that the pace of life for Threadgold is unlikely to be reduced any time soon.
Priorities (Return to top)
When asked what his priorities are for the next year, the list is long and ambitious.
“This time next year I would like to be trading with Morrisons and Co-op and I think we are in a strong enough position to do that now.
“Sales wise we are incredibly ambitious. We are recording 300% growth year-on-year at the moment and I think we will be looking for more again next year.”
Exports are also high up on the agenda, something that is likely to increase production and employment opportunities here in the UK.
“We are now doing well in France and Germany and I will have cracked at least two of the major Scandinavian countries by the end of the year,” he predicts.
“Emerging markets such as India and China will also become an increasingly big focus for us.”
“It's fair to say my European title is going to get a little stretched,” he quips.
Listen to Threadgold backing up Asda's claims that consumers are buying more meat-free foods as a result of the horsemeat scandal in our free podcast.
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