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.
- £30M investment in its Northamptonshire factories
- Expanding brand in the UK and internationally
- Particularly aiming for Chinese growth