Weetabix invests £30M but warns of price rises

Weetabix has revealed plans to invest £30M in its Northamptonshire factories

Weetabix will invest £30M in its Northamptonshire factories to expand its UK and international brands, the company’s chief executive revealed, but also warned of price rises as the pound’s value falls.

The investment would allow Weetabix to expand its brands both in the UK and internationally – notably, in China, Giles Turrell told BBC Radio 4’s Today programme.

“We doubled our business last year to China,” he said. “There is definitely a demand for high quality, imported British foods, there’s no question about that. I think we’re well-placed [to capitalise on that] with our healthy, nutritious breakfast cereal.”

The £30M cash injection was good news for the company, its staff and its farmers, Turrell said. But, he warned of potential “low-single digit” price rises as raw materials costs increased.

‘Raw materials cost us more’

“The big thing that’s affected us has really been currency,” said Turrell. “With the Brexit [vote] impact, we’ve seen obviously weakened sterling which means all of our raw materials do cost us more.”

Weetabix sourced all of its wheat from within 50 miles of Northamptonshire, but costs were still going up because wheat is priced in dollars, Turrell said. Prices for Weetabix may go up later in the year if the company couldn’t offset those costs, he added.

“Our primary obligation is to try and absorb those costs internally, and try and run the business more efficiently. As a final resort, we would have to increase our prices.”

Sold for about £1bn

Meanwhile, Turrell neither confirmed nor denied speculation that Weetabix was up for sale, but said any deal wouldn’t impact the planned £30M investment. It came after the breakfast cereal maker’s owner – China’s Bright Food Group – reportedly hired Goldman Sachs to sell it.

“We wouldn’t comment on rumour or speculation,” Turrell said. “I think today is really about this good news – our investors have backed us, we’re growing in the UK which is our core market, and they see the opportunity to extend our brand around the world.

“We’ve committed to [the investment] and we’re going to invest. We need to do that to continue to grow the brands in the UK.”

Listen to Turrell’s full radio interview here.

 

Weetabix investment – at a glance
  • £30M investment in its Northamptonshire factories
  • Expanding brand in the UK and internationally
  • Particularly aiming for Chinese growth

Related News

Overseas investment in the UK food and drink industry has hit a three-year high

Overseas investment in UK hits three-year high

Prima Cheese won a £3M investment from Lloyds Bank

Prima Cheese wins £3M Lloyds Bank investment

Robertson's Fine Foods of Ayrshire unveiled a new £3M facility

Pork and bacon producer opens new £3M facility

Weetabix could be the subject of a £1.5bn takeover offer from Post Holdings

US cereal firm ‘plans £1.5bn Weetabix takeover bid’

Medina Dairy is to invest £3.5M in its Watson’s Dairy

Medina Dairy’s £3.5M investment to create 25 jobs

Weetabix will reportedly be sold to US-based Post Holdings for £1.4bn

Weetabix to be sold to Post Holdings for £1.4bn

Weetabix has confirmed that it will be sold to Post Holdings

Weetabix confirms sale to Post Holdings in £1.4bn deal

The Unite union called for Weetabix job reassurances

Weetabix jobs reassurance sought by union

China's grocery market is predicted to become more online

Chinese online grocery market ‘to double’ by 2020

Buxton: ‘Weetabix could mark the start of a spending spree on UK assets’

Weetabix's sale could just be the start

Weetabix may be sold by majority owner Bright Food Group (Flickr/AlexParis)

Weetabix may be sold in £1bn deal

Workers at Weetabix's Corby and Kettering factories have postponed strike action

Union calls off Weetabix strike

Workers at Weetabix voted to strike (Flickr/Sean MacEntee)

Weetabix staff to strike over shift changes

The Apprenticeship Levy is likely to challenge many businesses

Food and drink industry prepares for the Apprenticeship Levy

Mike Dalton (centre left), head of operations, and Stuart Driver (centre right), capital programme manager, received the trophy from host Carol Smillie and Waitrose food technologist and FMEA judge Jonathon Bayne

Jordans’ cereal success manufacturing Oscar win

Mash Direct triumphed in the Food Manufacture Excellence Awards last night. Congratulations to all the winners and finalists

Food Manufacture Excellence Awards: meet the winners

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.