The UK’s top food and beverage companies continue to go from strength to strength, according to Alantra’s annual Food & Beverage Fast 50, which ranks the UK’s fastest-growing privately-owned businesses in the sector.
Despite some tough headwinds, the fifty companies included have each seen double-digit annualised sales growth over the past two years, with the leader, Strong Roots, doubling its turnover each year to achieve an annual growth rate of 109.1%.
Alantra stated that this accelerated growth reflects the ability of these businesses to understand changing consumer appetites and to tap into some of the most powerful trends driving purchasing behaviour today, both in the UK and internationally. Their record is all the more impressive given the challenges posed by Brexit uncertainty, rising costs and a challenging labour market.
Despite an impending Brexit, many of the businesses included in the ranking are making significant inroads into new markets overseas, leveraging the value of the ‘Made in Britain’ label. This includes brewer Innis & Gunn Holdings (ranked 13 with CAGR 37.8%), which is now the market leader in its category in Canada and the number two in the US.
Others are focused on innovation and new product development, targeting new customers in the UK and globally. For these reasons, Alantra anticipates that the UK’s food and beverage sector will continue to attract attention from investors. This includes both trade buyers as the larger food and packaged goods companies look to acquire new sources of growth; and private equity, with some 22% of the Fast 50 backed by financial investors. Some of the highest-ranking businesses in the Fast 50 such as Pots & Co and Grenade exemplify the positive impact that private equity can make to growth.
According to the ranking, key consumer trends supporting business growth include increased demand for healthy products. The rapid growth of flexitarianism over the past year is one example of this trend, benefitting businesses such as frozen plant-based foods specialist, Strong Roots (CAGR 109.1%), the number one ranked company in the Fast 50.
This theme extends to the drinks market where companies such as Harrogate Water (ranked 37 with CAGR of 24.3%) appear to have capitalised on the introduction of new taxes on high-sugar products in the UK. Vitamin and supplements maker Bee Health (ranked 12 with CAGR of 38.3%) and healthy snacking specialist Grenade (ranked 2 with CAGR of 92.9%) are similarly benefitting from this trend.
Meanwhile, consumers’ desire for authenticity has led to demand for high-quality, artisan products and an ability to articulate brand values that resonate with the customer base. This has fuelled the growth of companies such as craft beer maker, Brewdog (ranked 4 with CAGR of 57.9%) and pet food manufacturer, Lily’s Kitchen (ranked 21 with CAGR of 32.5%); as well as premium goods manufacturers such as St. James Smokehouse (ranked 34 with CAGR of 24.5%) and Abergavenny Fine Foods (ranked 38 with CAGR 23.9%).
Alantra found that businesses that offer affordable treats are also seeing demand from cash-pressed consumers who look to make discretionary purchases of small indulgences in lieu of big-ticket items. Companies such as Pots & Co (ranked 3 with CAGR of 89.7%) and The Cake Crew (ranked 14 with CAGR of 37.4%) demonstrate this trend, along with a significant number of ‘heritage’ brands that are able to command higher prices for top-end products.
Simon Peacock, Partner and UK Food & Beverage Leadership, Alantra, commented: “This year’s ranking offers a glimpse into how the most agile brands are exploiting the fast-moving marketplace. It is their commitment to product quality and customer service that is in turn driving dramatic improvements in their sales.”
Charles Lanceley, Director and UK Food & Beverage Leadership, Alantra, added: “The fastest-growing brands in the food and beverage sector are highly skilled at identifying what their customers want and have captured the imagination of consumers by offering a product with a genuine point of differentiation. The businesses in the Alantra Food & Beverage Fast 50 deserve huge credit for the success they have achieved so far.”
The full Alantra Food & Beverage Fast 50 ranking and analysis can be downloaded here
