Home: Issue 1 2011 › Lead Story › Built to last
Built to last
09/03/2011 | Channel:
As Matt High discovers, investment in new facilities and equipment is enabling the UK food sector to remain successful
It has recently been revealed that an ongoing commitment to development, innovation and high-value production techniques are some of the key reasons why the UK’s food industry has emerged from the recession in a much better position than many of the other local manufacturing sectors. In fact, a recent report released by the Food and Drink Federation from the Institute for Manufacturing at the University of Cambridge illustrated that nearly 40 per cent of UK food and drink manufacturers plan to increase their investment in production and research in the near future, while a large number of businesses are confident about increasing their investment in UK production facilities in the next three to five years.
One of the keys to survival is the desire to invest in developing your brand, ensuring that the facilities and equipment are in place to enable business to flourish, even in demanding or difficult economic climates. This has been just the case for one small,
independent UK business that holds the distinction of growing chillies in the world’s most northerly chilli farm. Trees Can’t Dance Chilli Company (TCD) has been one of many UK food companies that has experienced growth in recent years, and after seeing 100 per cent year-on-year volume growth in the second quarter of 2010 it has received confirmation of funding from the Rural Development Programme for England to implement a new £90,000 manufacturing facility.
I recently spoke with TCD managing director Dan May about this development and why food and drink businesses must continue to invest in their production capabilities to achieve results. “I think that this kind of investment is very important,” he explained. “For example, the plant that we have in place will eventually enable us to have three shifts operating 24 hours a day, five days a week within two years and this is vital to fuel the desire for innovation and new products that there is in the market at the moment.
“There is a strong demand for innovation and I’m personally very excited about the opportunities that the new-build will bring us. Importantly, with these kind of developments it does seem that we in the UK are driving new product development and innovation and this is something that I think cannot really be matched in some other parts of the world, particularly in Europe. So, there are a lot of opportunities for companies to take and in that respect taking these steps towards investing in new facilities and production capabilities is really important.”
As Dan went on to explain, the decision taken at Trees Can’t Dance to invest in the new facilities was based around successfully expanding the brand and taking the company to the next level: “During 2008 and 2009 we received a great deal of interest from new and larger clients, which meant that we had to sub-contract a lot of our work to meet this. However, more recently we realised the importance of bringing everything back in-house, which of course meant developing a new processing unit. In terms of having these capabilities in-house I think that it not only allows you to carry out operations far more efficiently in terms of the overall supply chain, but it gives you the additional space to be able to carry out extra, third party work for other companies as well.
“Developing a food brand, particularly when taking what you may have achieved regionally and repeating it nationally takes a great deal of investment of time and money and I think that it is very important to take the money that is generated by the brand and reinvest it back into the business so that you can have more efficient processes and facilities, and manufacture on a week-to-week basis on your own schedule.”
Obviously, in the current climate the decision to invest significantly in facilities or equipment is not one that should be taken lightly. Fortunately, as the Government looks to encourage business growth, particularly in the small business sector, there are various organisations that can help with much-needed funding into new-builds and equipment investment. “In our case we received a 40 per cent grant from the Rural Development Programme for England,” said Dan. “We approached them with our plans to develop and build in three units that we already have at our location and they certainly helped us to achieve our goal. In that sense, I think that such programmes are important for businesses that are looking to develop, invest or build, and it probably was one of the factors that really swung the decision to go ahead for us.”
Of course, with growth comes further demand, and as Dan explained, TCD has been careful to ensure that the new facility has considerable upgrade capacity. “What we have done is to make sure that we have built a plant that can, and will, expand dramatically to meet the needs of the company as it grows,” he said. “For example, we have put in extra power and compressed air points so that we can add more machinery and equipment when needed. As far as I am concerned this is very important, and we made sure that we carried out a lot of research into the equipment we were buying to establish its future upgrade capability.”
Ultimately, the decision to invest in new facilities contains a number of factors, but it is clear that it is not something that companies should shy away from. While it is easy to remain uncertain in the recent economic environment companies such as TCD are demonstrating that the UK food industry is at its best when it focuses on innovation and development. As Dan concludes: “I think that it is important to understand that the investment in new facilities is necessary but you are able to do it cleverly so that it can grow with the business. Having these new facilities has already created four or five new jobs within the business and there will be more soon. More importantly it has allowed us to increase our capacity so that we have been able to strengthen our position in the UK market and allow our export business to develop considerably. Companies should be keen to take these kind of opportunities as they provide exciting prospects for the future.”