McVitie’s, the quintessential British biscuit, is to be savoured by more consumers in the Middle East, Africa and the US in an ambitious global expansion plan by its Turkish owners to boost sales by 50 per cent in two years.
Cem Karakas, chief executive of Pladis, part of Turkey’s Yildiz Holding, which acquired the McVitie’s brand in 2014, told the Financial Times in an interview: “McVitie’s is very much synonymous with British heritage – it is a household product for the British but for the rest of the world, the research over and over suggests that it is synonymous with a premium product.”
One in four biscuits sold in the UK are McVitie’s, a brand founded more than a century ago by a Scottish baker, and best-known for its digestives.
Pladis was formed in London last year by consolidating acquisitions made by family-owned Yildiz. These included Godiva, the Belgian chocolatier; DeMet’s Candy Company; and Ulker biscuits.
It is a distant number two by market share in sweet biscuits to Mondelez of the US, which owns Oreos biscuits and Cadbury chocolate, and the world’s seventh-largest in chocolate.
Mr Karakas said McVitie’s and Godiva were at the heart of Pladis’ strategy to increase revenues from £2.2bn in 2016, to £3.2bn in 2019, by doubling chocolate sales and increasing biscuit sales by 50 per cent.
This would make Pladis: “the world’s fastest-growing company in biscuits and confectionery”. Global retail sales of sweet biscuits have fallen each year since 2013, according to Euromonitor.
Pladis aims to increase sales to the Middle East, North America, north Africa and sub-Saharan Africa, including Nigeria. Yildiz recently acquired a cocoa processing plant in Ivory Coast to serve nearby markets.
The export drive will lead to 40 per cent of McVitie’s revenues coming from outside the UK, against 10 per cent currently.
Mr Karakas said Pladis was investing heavily in Godiva, which has close to $1bn of annual sales, and was acquired in 2007. “This year alone, the amount of investment that we are going to make will equal all the investment for the last 30 years. So, there’s a big push behind the brand.”
The group’s capex programme has increased to 7.5 per cent of sales – well above the industry average of 4 per cent – mainly spent on new manufacturing and packaging lines and on modernising its Carlisle plant, which shut for several months last year after flooding.
The Godiva brand is being extended from gold-boxed chocolates into tablets and bars, that can be sold in supermarkets, and produced as cakes, biscuits and ice cream. Mr Karakas said: “We have been trying to make this brand more available,” but added that the group would continue to open Godiva boutiques, which he said had become lifestyle destinations in China for younger consumers.
In the UK, the market for sweet biscuits has been flat in recent years in the face of growing demand for healthy snacks and bars, though Mondelez has bucked the trend with novelties, such as Bel-Vita breakfast biscuits.
Pladis has also been producing McVitie’s in new formats, including a digestive “Nibbles” range of chocolate-coated balls of the biscuit.
This year, it launched its Hobnob biscuits as Nibbles and introduced a thin version of digestives, including in a cappuccino flavour.
