Roscoes targets 80% of own brand food to be made in house
Today Roscoes announced that it would set up a strategy throughout Europe through a mixture of setting up new factories and buying existing contract food producers and agriculutal food processors to make 80% of its own brand food in house. The company also announced that Cadbury's factories would make 100% of the chocolate range for Roscoes as well as making Cadbury's products to sell under that brand name with plans to sell Cadbury's as the more affordable premium range while Roscoes would market the cheaper chocolate range with less cocoa under the Simply Roscoes range. The new strategy calls for vertically integrating from farm to factory to store to have the whole producation and sales process be inhouse apart from the farming. The company announced it would do this to increase margins as well as enable it to increase the portion of the price going to the farmer while increasing margins with it committing to putting 50% of the savings from integration to higher payments for produce. The company is setting up Roscoes Factories Ltd and Roscoes Processors Ltd as subsidiaries to organise the new divisions under the Roscoes Retail division.
The company announced it would be setting up a drive to make 80% of own brand food in its own factories within 5 years and has kickstarted the process by buying out Premier foods.. The company also announced a target for own brand sales to make up 90% of its sales within 3 years up from its current 81% . The company said "We believe integrating the process from manufacturing to store will help us enhance our offering with our customers benefiting from increasing quality and simpler choices for a lower price. We believe the right way to go is to move further away from big name brands and producers. Where we do stock other brands we plan on those brands being made by small local producers to provide local food options to customers from businesses that are of SME status." It also stated wherever it had supermarkets it would stop selling Cadburies, Yorkshire Tea, or Whittards Teas products to any other shops though it still planned to supply independent small cafes and restaurants. The companies plan is intended to increase efficiency , profit and increase control overconsistency and recipes of the own brand products. Analysts have suggested Roscoes is heading more in a Aldi direction shutting out brands and instead making its own alternative products. This news is a blow to the branded products market as Roscoes is the 1st or 2nd Supermarket in many countries with over 30.4% of supermarket revenue and 10.5% of convevience store revenue going to Roscoes with this share if anything expected to increase over the years. The news will also be a blow to Caffe Nero suppliers as Roscoes indicated it would seek to sell only Roscoes own brand food in Caffe Nero within 2 years. It indicated it plans to set up factories in all countries with major operations in order that it can meet targets of each country having at least 50% of products in store being from the country the food is sold in.