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Manufacturers are investing heavily in ready meals as the market booms

ready meals

Beak & Johnston is building a strong reputation as a ready meals manufacturer. CEO Ray Hanley said listening to consumers has been a critical part of the company’s continued success. Adam McCleery writes.

Beak & Johnston, an Australian ready meals manufacturer, is expecting to complete construction of a new $90 million kitchen facility in Western Sydney after the sector experienced rapid growth over the past seven years.

The 12,000 sqm facility sits next to the company’s existing 10,000 sqm City Kitchen factory and is expected to open in October.

Beak & Johnston was founded in 1986 and since then has grown to include meals, pastries, sausages, and burgers as part of its offering. Its current brands includes Simmone Logue, Pitango, Beak & Sons, Strength Meals Co, as well as producing private labels.

In 2020, the company also bought two more ready meal brands, Ready Chef and Pasta Maker, as well as a production licence from General Mills.

Beak & Johnston CEO, Ray Hanley, said being in touch with consumer trends and needs was the foundation for success in the ready meals space, especially when these types of products were unpopular.

“We initially opened the first ready meals facility in 2015 to produce ultra-fresh ready meals, but to be totally truthful the market wasn’t ready for that yet,” said Hanley.

“Because of that, we had to course correct and get something that we could logistically produce to the Australian consumer.”

ready mealsHanley said the company’s expansion would deliver the trifecta of additional capacity, new product ranges, and more jobs. But the key challenge still tends to centre around consumer trust in ready meals.

For years the ready meals sector was looked at as a cheaper alternative with poor quality ingredients – the ‘TV dinner’ effect, as Hanley said.

“Building that trust with the consumers was ultimately what drove penetration into the Australian market, because penetration at the time was in single digits in 2015/16, but that has more than doubled since then.”

The rise in ready meals popularity is attributed to several factors, not least the impact of COVID-19 lockdowns and the improvement in product quality perception.

“We heavily invest in product quality and source fresh within Australia. The message we are sending to consumers is we produce at scale but using the same methods and processes that people do in their kitchen,” said Hanley.

After seeing the rapid growth of the ready meals sector, and being well prepped for it, Beak & Johnston invested in the new manufacturing technology and launched an automated lasagne production line. The first of its kind in the Southern Hemisphere.

“It also has precision assembly, which removes variation from the process so that every product is exactly the same, which helps build that consumer trust,” said Hanley.

“We’ve grown the sales of our lasagne from nothing in 2018 to over $1 million a week, which shows the benefit of getting the cost, quality, and availability right.

“The company is passionate about these aspects. We have the goal of being best in class for quality and innovation, best in class for service and best in class for value.”

Hanley and his team were relentless in their pursuit of getting their core right so they could present a high-quality product to the consumer and start to build that trust.

“When you are doing frozen, or post-pack pasteurised products, there was an ongoing perception it was full of preservatives,” said Hanley.

“Successfully changing perceptions could only be done with quality products.”

The investment in the new $90 million Western Sydney factory is one that was made with an eye towards the future, as the industry anticipates continued growth for the ready meals sector and making sure they were prepared.

“Customer and consumer trust are paramount,” said Hanley.

“The investment we are making now is based on a three- to five-year horizon, because if we only come at it from a short-term view, then we probably wouldn’t do it yet. Looking ahead and maintaining relevance to meet consumer demand is absolutely critical.”

The new facility is also a key example of Beak & Johnston’s commitment to reinvesting profits back into the company with an eye towards the future.

The existing factory currently manufactures $140 million worth of meals a year, but the company knows it needs to continue to expand to meet the expected future demand.

“We know that to continue to grow we have to bring in the best available technology and remove variation from the process. We’ve got to be best in quality price and service, to maintain that relevance,” said Hanley.

“There are other channels, too because consumers don’t just buy from retailers. Consumers also get orders delivered directly to their homes or pick up a quality ready meal from an independent seller.”

Beak & Johnston recognise that choice for consumers is an important area of focus for the company.

Hanley said giving consumers variety of choice from a product, and that product being of the same high quality every time, then they are more likely to stick with their product selection.

“Consumers also don’t want to pay for activities that don’t add value to the product. Where you can eliminate nonvalue added cost by employing leading technology is another key driver for us and the strategy behind the new facility,” said Hanley.

The company kept a keen eye on consumer feedback and trends when investing in the new Western Sydney facility so that it could employ the best possible technology and equipment for continued success.

“Our strategy is about removing variation in the product, and again that is driven from a quality perspective, by bringing the best available technology and automation it will insist on process excellence,” said Hanley.

“I refer to people that operate this equipment as pilots because they monitor variation and respond accordingly. Being able to produce a product at 100 per cent specification every time is the key driver about bringing this technology in.”

For example, one piece of equipment procured by Beak & Johnston for the new facility is a fully automated pastry line designed to produce a range of savoury products, from dessert pastries to sausage rolls.

ready meals

“The drive behind that purchase was to produce a fresh and ready-to-eat product, or one that can carry a 10 to 12 days shelf life or be frozen. The consumer’s choice is very important, and this line’s technology gives them that variety,” said Hanley.

The importance of having the right people in the company is another critical area of success for Beak & Johnston.

“Ultimately, it is all about people. From consumers, customers, and employees to the supply base. We are passionate as an organisation about getting people in who are also passionate about the products and their responsibilities environmentally,” Hanley added.

By doing so, Beak & Johnston foster a company culture around best practices and making sure the highest quality product is being produced for the market.

“We are highly reliant on people as an industry, so engaging those people from the consumer right up the ladder, is paramount,” Hanley added.

Meanwhile, the rapidly evolving regulations and standards around sustainability and the environment are also areas of importance for the manufacturer.

This is no more obvious than in the use of ready meal packaging, which not only has to be pleasing to the consumer’s eye but meet several requirements to create extended shelf life while also being sustainable and recyclable.

“Packaging is a critical factor for the success of the category because consumers shop with their eyes,” said Hanley.

“Getting the packaging solution right is paramount from a consumer perspective and a second factor in that is higher consumer demand for manufacturers to meet environmental obligations.”

Being able to minimise energy consumption and waste created from manufacturing ready meals is a critical point when Beak & Johnston invest in new equipment and technology.

“It’s business critical that we respond to the environmental obligations, and I see that as a personal and business responsibility. It also ensures we adopt the best available technology to achieve this,” said Hanley.

One of the many methods used by Beak & Johnston to ensure the company is abreast of current technologies is to be active in the market.

Hanley has visited Europe recently as part of the manufacturer’s continued efforts to see first-hand what is working in other markets around the world.

“Having worked globally I have a good understanding of what is available, not only in terms of current technologies but also in terms of emerging,” said Hanley.

“I don’t want our business to be a ‘me too’ in Australia. I want to ensure we are leading edge and first to market with new technologies.

“That does bring risk because we are investing upfront against that consumer need but if we want to create a unique point of difference, we have to be leading edge in everything we do.”

By capturing global learnings and seeing what is relevant to the Australian market, Beak & Johnston can get ahead of the curve in the local market.

For Hanley, the voice of the consumer continues to be an invaluable resource in the success of Beak & Johnston and the foundation from which they build their strategies.

“We invest heavily into consumer research and getting the feedback about how they want products to perform for them,” he said.

“That research is really important for our innovation strategy. The second part is capturing global learnings and sharing it through consumer insight forms in Australia to make sure it is relevant.

“Ultimately it is the voice of the consumer helping us to develop that innovation strategy.”

Hanley said even after the COVID-19 pandemic has passed the ready meals space will remain unchanged in its popularity, in no small part due to the changing of consumer perception around the sector.

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