Group strategy

Northern Foods is a focused company that has chosen to operate in five markets and seeks to drive improved shareholder returns by :

• focusing on growth markets
• working with customers that value quality and service, and
• operating a low-cost business model

Northern Foods makes great tasting food including Ready Meals, Sandwiches and Salads, Pizza, Biscuits and Puddings across the three areas of Chilled, Frozen and Bakery production. In each of its core markets, Northern Foods has strong leading brands or high growth, own label positions.

Performance Improvement Plan

The business has real potential for future performance improvement and each of our business units is led by a strong management team with a clear vision and strategy for growth.

Our approach to performance improvement is simple.  Within each business unit we start with instilling the basics – taking out cost, reducing complexity, being clear on our unique selling proposition and keeping a disciplined approach to capacity utilisation. We then fix any problems; expanding our customer base in ready meals, regaining control and focus in biscuits, rationalising in frozen.

Finally, we seek to build a better business with a focused drive for growth – building a more profitable retailer own brand business; capturing more value through brands and orientating our portfolio to high growth markets while watching out for judicious bolt-on acquisition opportunities.

We add to this our “lite” group centre focused on scale services and governance, our determination to employ the best management talent and a rigorous performance culture.

Background

Today’s Northern Foods is the result of significant change, resulting from the implementation of our comprehensive performance improvement plan.

In 2004 efficiency programmes were commenced and in 2006 it was decided that radical surgery was needed in order to position the business for sustained growth within a changing and challenging marketplace.   The group chose to channel its resources in five higher performing markets in order to reduce business complexity, improve focus, and thus drive improved performance, earnings and cash flow.

In order to create this more competitive and resilient business, the following actions were initiated:

• The disposal of businesses accounting for around 40% of group revenue – with proceeds being used to reduce borrowings, reduce the pension deficit and invest for growth. The sale process was completed in January 2007. 
• Simplification of the Chilled business in order to improve returns, reduce ‘cost to serve’ and enhance our ability to serve our customers
• A clear focus on central cost reductions to reflect the simpler, focused Northern Foods
• Rigorous capital and cash management in order to drive improved shareholder value

You can monitor our progress in the Media and Results and Presentations areas of this website.