POST BREXIT, CAN SALES AT UK CHOCOLATE MANUFACTURER BEECH'S CONTINUE RISING?
Following a 35% increase in direct sales this year and new business won from Virgin Trains, T J Max and Mr Simms, North West based heritage chocolate manufacturer, Beech's Fine Chocolates, has so far bucked the gloomy post Brexit forecasts for retail downturns. So what the Dickens will happen next?
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Capitalising on their current strong rating in Plimsoll, Beech's believe they remain well placed to continue to do well in 2017 for two good reasons - indications already suggest the large UK trade multiples will increasingly look at domestic markets for supply as European suppliers or those with European production facilities become non competitive because of the weak pound; Beech's, with their well invested in house production, only outlay a third of their total operating costs on this aspect, meaning they are better placed to sustain any downturns in consumer spending as inflation rises.
In addition, increased trade orders indicate there has been a shift to the premium end of the market because of the decline in quality of other British chocolate products - there has been no such diminution at Beech's and even higher quality products are in planning for 2017.
Inevitably, and in common with other luxury confectionary providers, Beech's is now having to pay more for its raw materials, again because of the weak pound. As a consequence Beech's will be initiating two price increases in January 2017 (list price increases) and March 2017 (Trade price increases).
However, to offset this the Company has invested in new Trade and Consumer web sites aimed at providing even better service to all its customers, whilst also lowering operating costs through more streamlined digital processes - these in addition to investment in new production lines. The Trade web site is live now (trade.beechsfinechocolates.com) and the consumer web site will go live in January 2017.
In line with the robust approach to the Brexit uncertainties already explained, Beech's are also launching new products in 2017. Firstly, the Company now announces they are launching a new, competitively priced range of Champagne Truffles aimed at Fine Foods ‘Gourmet’ markets and selected luxury retailers - UK based and World Wide.
This range comprises Champagne Truffles, Pink Champagne Truffles, Prosecco Truffles and Salted Caramel Truffles, all using 35% cocoa solids and produced in 100 gram packs of 10 truffles. In addition Beech's will also launch a Fair Trade Madagascan chocolate bar - the key ingredient, Madagascan cocoa solids, is the most Fair Trade chocolate in the world, making the product unique in the UK market.
To go with these high quality offerings Beech's has also upgraded its packaging using a premium gold blocked finish.
Taken together the increased sales, new contract wins, product innovations, and improved web site and digital services, mark a promising platform for the start of the new year for the 96 year old, family owned Company.
Speaking today, Chairman Andrew Whiting says ' just a few years ago the Company was struggling, but 2016 has seen an astonishing turnround - in some months internet sales have quadrupled over comparable periods in the previous year and we have, importantly, also won new business with Virgin Trains, T J Max and Mr Simms. As innovative, UK based producers with lean, cutting edge digital processes and operations we believe we can weather any post Brexit fallout - we have no intention of limiting our lists in 2017 and this confidence is demonstrated by the launch of our two new product lines'.