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Resurgent Quorn: on track to becoming a billion-dollar business

When Quorn’s existence was jeopardised not so long ago, it was the carnivores that marauded to its rescue. In meat-eaters the vegetarian staple found its unlikely salvation and, thanks to their intervention, it is now in the best shape of its life.

From stagnation five years ago, the £200m-a-year firm has just recorded a record period of global sales and it is on track in the longer term to become a “billion dollar” business. So says the clever executive behind Quorn’s resurgence, Kevin Brennan (pictured below), who believes carnivores now make up three quarters of Quorn’s global customers.

The ex-Kellogg’s man, who is credited with turning a small cereal brand called Special K into a market leader worth billions of dollars, joined Quorn in 2010. At the time all was not well at the food firm’s HQ in Stokesley, North Yorkshire.

Quorn Kevin Brennan“It had gone into a very sharp decline and had been pigeon-holed in the UK as a veggie food,” he says. “It was no longer seen as relevant and there was also a lack of investment in the brand.” Brennan joined Quorn six months before Premier Foods sold it to private equity group Exponent, and his primary remit at the time was to stop the rot.

“In terms of exports, the best way to describe it would be a very old-fashioned bunch of people working with small distributors selling food that was really made for the UK market, rather than brand building.

“All the things that you would expect to see in a modern factory, like continuous improvement plans and a performance metric culture, were not there. From a people point of view, there was absolutely no ambition. There were some great people in the background, but you couldn’t speak to anyone about what we were going to make next week, never mind next quarter. Culturally it was stuck in the past and in every aspect it needed turning around.”

Despite the bleak picture he paints, he saw more potential in Quorn than he had in the cereal he nurtured into a global super-brand.

“I knew if we could turn Special K into a billion dollar business, we could do it with Quorn,” he says. “There were all these things that we weren’t doing well and I knew if we fixed them it could really fly.

“Special K was great at riding a health trend but if you look at its uniqueness, it wasn’t that much healthier than some other products. With Quorn we had something that, compared to meat, is transformational in its health credentials, whether that’s in relation to fat, calories or cholesterol.”

Quorn’s turnaround has been driven by three selling points; it’s healthy, a sustainable source of protein and it’s not meat – but new labelling makes it clear it’s not just for vegetarians. It is made through the fermentation of a type of fungus to create ‘mycoprotein’, which is naturally low in saturated fat and high in fibre. With obesity rates in the UK doubling in the last 20 years and 64% of adults in Britain now classed as overweight or obese, products like Quorn have their place improving the nation’s waistline.

Its sustainable status is also accelerating sales. So damaging is the impact of farming livestock on the environment that green-conscious venture capitalists like Bill Gates and the wealthy co-founders of Twitter have been pouring millions of dollars into meat free alternatives.

An estimated 70% of the world’s agricultural land is used for livestock. But this could increase as the population grows by an expected 30% to over nine billion by 2050. Globally, the UN’s Food and Agriculture Organisation believes livestock is responsible for 14.5% of greenhouse gas emissions.

Quorn’s popularity – especially in the UK – is also aided by growing mistrust of meat supply chains in the wake of the horsemeat scandal. A YouGov poll last year showed 47% of UK consumers thought there was still a risk of contamination issues in the meat industry. Such trends play into Quorn’s hands. A YouGov poll last year showed 47% of UK consumers thought there was still a risk of contamination issues in the meat industry.

In 2014 it reported record sales of £150.3m, up 6.7% on 2013 and significantly higher than the £110m in 2011. Last year also saw the brand add 1.86 million new customers. Its latest results show a £14.6m – or 8% – growth in global sales in January alone, representing its strongest month on record.

Sales to the US in the period grew 64% on the previous year. This was at a time when most food manufacturers were enduring flat sales. In the UK, sales rose by 6%, or £10.9m, and growth was registered in all of the 15 countries it supplies directly.

The firm is currently investing £30m in doubling production capacity at its facility in Billingham, Teesside, creating 400 jobs. While the wider market conditions have propelled Quorn to a strong position, fundamental changes to the business have been instrumental in its success…..

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