Griffith Foods acquires The Flavourworks: ‘A fantastic fit, ticking all the boxes in terms of strategy, capability and capacity’
Griffith Foods is expanding its UK footprint with the acquisition of ingredient supplier The Flavourworks for an undisclosed sum. The Dorset-based business will be incorporated into Griffith Foods' European & African division.
“The Flavourworks is a fantastic fit, ticking all the boxes in terms of strategy, capability and capacity,” Wim van Roekel, Griffith Foods' President, Europe and Africa, told FoodNavigator.
Capacity and capabilities
Van Roekel characterised The Flavourworks as ‘a very innovative company’ that delivers ‘premium solutions’ for savoury recipe development. He said that there are a ‘lot of similarities’ between Griffith and The Flavourworks – as well as some important differences, primarily in capabilities and customer base – that make the acquisition ‘a really good match’.
“We are traditionally strong in seasonings, coating systems and sources. In this space, we see growth through convenience food solutions and healthier solutions in out-of-home and retail. That's where we were lacking capacity. We've been growing really fast in the UK, to a point where it was hard to keep up with demand. So, capacity is certainly one of the areas we are looking for.”
The Flavourworks also strengthens Griffiths portfolio of food ingredient solutions, the regional lead continued. It adds butter melts, dressings and frozen sources as well as increasing the company’s capacity in key categories like marinades within the UK. Currently, Griffith’s marinades are produced in Belgium. “Post Brexit it's important for us to have that marinade capability in in the UK.”
The marriage of Griffith’s and The Flavourwork’s expertise will boost the combined company’s innovation abilities, van Roekel continued. “That's one of the beauties of the collaboration. We can build on the expertise that is available in both companies by combining the technology and experience and capabilities both companies bring. That allows us to deliver new solutions,” he noted, pointing to the technologies The Flavourworks leverages to maintain the shelf life of sources and dressings while keeping the flavour profile as authentic as possible.
Sales synergies and growth channels
Griffith will also benefit from complementary strengths across a number of market segments. The deal will enable Griffith to tap sales synergies and feed its own portfolio of ingredients into The Flavourworks distribution.
Van Roekel elaborated: “Our focus in the UK right now is primarily to food manufacturers that supply into retail, where The Flavourworks has a more diverse portfolio of customers, also in foodservice. We launched our Custom Culinary range two years ago for the Europe and Africa market… The capabilities that The Flavourworks has to offer are really well-suited to grow our out-of-home foodservice business."
Indeed, out-of-home is a focus for Griffith as it works to expand its footprint in customer segments it is ‘underrepresented’ in. While the company has a presence in QSR and retail in ‘other foodservice’ van Roekel said it has a ‘very limited presence’. “We have the capabilities and knowledge but it requires a slightly different go-to-market approach. That's where we have been adding to our portfolio. In that sense The Flavourworks is a really good fit to build capabilities.”
Griffith emphasised that this acquisition is about growth – there are ‘no plans to make any changes’ at The Flavourworks, with investment expected to accelerate at both the existing and newly acquired production facilities in the UK to support further capacity expansion.
“This is clearly a strategic acquisition. We've acquired The Flavourworks for the value that they bring. There are going to be opportunities for some synergies - think about supply chain, think about purchasing, think about utilising the agility of the assets that The Flavourworks brings better. The idea is to preserve the value of The Flavourworks in its current format and then we'll progressively start to make it truly a Griffith Foods family-owned business,” van Roekel elaborated.
Innovation priorities
Griffith delivers solutions across sources, dressings, seasonings and coating systems, which comprise the company’s key product platforms. These platforms are combined with its core capabilities in food science, health and nutrition, culinary and sensory science, the European business leader told us. “That mix of product categories and capabilities is what we are going to apply to grow these customer segments.”
So, what are the company’s innovation priorities?
Van Roekel responded: “Health and nutrition first and foremost.”
The company has set the target that its portfolio in Europe and Africa will be ‘100% delicious and nutritious’ by 2027. This compares to around 42% of sales delivering a health component today. “It's that combination that is vital - products that taste really good, continue to bring that culinary component to consumers, but are combined with health benefits.” These attributes can range from ‘taking out the baddies’ – fat, sugar and salt – to ‘adding health benefits to the proposition’.
Zooming in on segments, the company also sees significant runway for growth in alternative proteins. “Meat has always been with us in the 102 years Griffith has been in the market. We were founded in the Chicago meat district,” van Roekel reflected. “But we see a significant transition in the protein segment from meat protein to alternative protein sources. We aim to be a front-runner using our product development capabilities.
“The two key areas we are focusing on are healthy nutrition and alternative protein.”
As the company works to develop these areas it is adjusting its innovation strategy, moving away from a focus on tailor-made innovation to concentrate on product platforms. This, the company believes, will help it deliver more meaningful innovation with bigger impact.
Doubling sales, tripling the bottom line
Griffith Foods was founded in 1919. But the company is not resting on its 100-year history. It is looking to the future with a plan to double the size of its European business and triple its bottom line by 2027.
Growing sales at this ambitious pace cannot be achieved through organic expansion, it requires an active M&A strategy.
“We are on the hunt - but not because of the hunt,” van Roekel explained. “We have an historical growth track record of high single digits. In order to double in size and triple profitability we need to grow in double digit numbers. The growth of the processed food industry is low single digits so that means in order to keep up that pace its very likely we are going to look into potential acquisitions - but only when it makes sense.”
Expanding profitability at a faster clip will see the group shift its sales mix to higher value areas. “Focusing on the segments we are focusing on, bringing our capabilities to life for this customer segment, we believe that we will get a higher return from these markets,” the businessman told us.
“We are tracking what we call the health and nutrition transformation… We do see that for these products we get a better return. This is not because we want to drive more profit - that is also important - but we also want to reinvest in research to continue to bring these benefits to our customers.”
Indeed, van Roekel was keen to stress that the company is not chasing scale for scale’s sake. Purpose is at the heart of Griffith Foods’ ambition, he contended.
“Our purpose is, we blend care and creativity to nourish the world. That's a significant ambition, to try and feed the world, make the world a better place, have a positive impact on the people that live on the planet.
“The size component is driven by our purpose. We are not growing for the sake of growth. We are growing to have a positive impact on the planet. But in order to do that you need scale. Are we going to be the number one product development company [in terms of size by 2027]? No. Are we going to be the best product development company bringing delicious and nutritious solutions to market? Yes, we are. That's our goal.”
When it comes to sustainability, local sourcing as close as possible to its markets is an important component for Griffith. And the group’s European operations are investing in green initiatives that are third-party verified by Ecovadis. Just last week, the company was awarded a platinum rating for one of its four European manufacturing facilities, joining its other platinum and gold awards.
“We have put a lot of time and effort into making our promise [a reality]. We have said we will be a sustainable company. That's not easy. It is a long journey that is probably going to be with us forever.”
