April 19 2014 Latest news:
, Business writer
Wednesday, February 12, 2014
Norfolk chocolate producer Kinnerton is confident high cocoa prices will not eat into its finances as it targets another year of growth.
The Fakenham-based confectioner has faced a squeeze at both ends of the business from a 20pc hike in cocoa butter pricing and increased pressure from retailers to keep its costs down.
But site director Gordon Chetwood expects the company to exceed last year’s sales and profits by widening its distribution and increasing the presence of its key brands.
The bright forecast follows a positive 2013 for the firm after landing a significant contract with Unilever to produce chocolate versions of its popular ice creams.
Mr Chetwood said more licenced products will be launched by Kinnerton this year, but he does not expect the company to add significant numbers to its workforce after recruiting more than 100 people in the last 18 months.
“There have been changes to pricing at both ends of the business regarding commodities and our supply,” he said. “The price of chocolate is 20pc higher than it was a year ago and that is a real challenge. The world market price for cocoa butter is exceptionally high and continues to rise. There have been some spikes historically, but this has been over an extended period.
“We have coped with the costs through product engineering, being more cost effective, and in some cases we have had to pass it onto the customer. But we cannot just pass all the costs onto the retailers.
“We want to consolidate the uptake of our products across our confectionary output,” he added. “There are still wholesalers that we haven’t done business with.”
According to its latest set of accounts to April 27 2013, the business has seen a 7pc increase in turnover to £75m, while pre-tax profits grew from £3m to £3.9m.
But while its UK and Australian business grew, its turnover in Europe fell slightly from £2m to £1.9m.
“Growing our export offering is something that has been on our radar in the existing market places we serve and potentially new markets as well,” Mr Chetwood said. “But the main growth will continue to come from the UK market.”
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