Quorn Announces £40 Million Investment to Fuel Further Expansion
Quorn Foods, the global meat free producer, is embarking on a £40 million investment drive to fuel further growth over the next 12 months. The North Yorkshire-based food manufacturer, which currently exports its meat alternative products to 15 international markets, is looking to build on the record 8% sales growth it experienced last year and plans to expand into at least one new international market in 2015, with a further two currently being considered.
This follows successful launches in Germany, Denmark and Finland in October 2014, with Quorn experiencing surging sales growth in all of the 15 international markets it currently operates in, as it pursues ambitions to become a $1 billion dollar business in the next ten years.
In 2014, total sales hit £150 million for the first time in the company’s 30 year history with international volume growth up 16% year-on-year. Quorn ended 2014 with 30% more distribution in the US following the creation of a dedicated stateside office, with like-for-like sales growing by 48% in the final quarter.
In Germany, a successful test has led to a national roll out with distribution wins in major retailers Edeka and Tegut in recent months spurring a like-for-like sales increase of 49.5%. In Switzerland, like-for-like sales were up 8.4% over 2014. Quorn has attracted 1.86 million new customers over the last 12 months.
The company cites existing tax breaks as a significant factor behind its decision to pursue such a rapid programme of expansion and is urging the Government to take measures to protect and build on these in the forthcoming Budget, to help encourage further growth and investment.
In particular, The Patent Box, which allows corporations to a pay a lower rate of tax on profits generated from UK-owned intellectual property, has acted as a catalyst for Quorn’s programme of international expansion, with the company planning to invest a further £3m over 2015 on research and development.
Quorn has also benefitted from Research and Development Relief* which has spurned the company’s biggest ever programme of new product creation, with 30 products, both for UK and international markets, currently in development at its Stokesley headquarters. These include new gluten-free and vegan lines, both of which are set for launch later this year, as it looks to build on intense consumer interest in the ‘free from’ category.
Kevin Brennan, chief executive of Quorn Foods, says: “Our £40 million investment over the next 12 months is a real statement of intent, as we pursue our ambition to transform Quorn into a $1bn business, four to five times its current size. All of the 15 markets we directly export to are performing extremely well, with sales of Quorn likely to double in Germany, Finland and Denmark over the next 12 months, and plans to expand into at least one new international market in 2015 as we look to build on current momentum.”
He adds: “There’s no doubt that Government policy around R&D Relief and The Patent Box is helping to fuel our growth, and that of other innovative companies, and the next Budget offers the perfect opportunity for the Chancellor to show his commitment to businesses such as ours and take steps to protect and enhance tax relief measures.”
In addition to the £40 million investment over the next 12 months, Quorn is close to completion of a £30 million investment at its Billingham plant near Middlesbrough, which will see it double its production capacity from June onwards, creating 400 jobs in the process, including more than a dozen apprenticeship posts.
