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Enter Greencore USA, a convenience food company that, although is a wholly-owned subsidiary of United Kingdom-based Greencore PLC, is making quite a few waves of its own. Liam McClennon, President and CEO of the division, talks about his company’s dedicated role in serving a more dynamic consumer, the success they’ve had in the U.S. market, and why recent acquisitions and expansion plans signal a long term presence in the face of growing demand. Steve Engelhardt reports.
Greencore USA was founded in 2008, a move McClennon attributes to a softening private label market in the United Kingdom. “The UK private label market had experienced massive growth for a number of years, averaging between 15 and 20 percent annually,” he says, adding, “however, eventually the market began to mature and saturate, and growth began to slow a bit, and we knew we had to expand elsewhere in order to maintain our momentum as a company.”
The consensus fell on the United States, and Greencore soon established a permanent division, opening up its first production plant in the northeast. Six years later, the company oversees seven facilities, with locations entrenched in the New England, Washington D.C., Southeast, and Midwest regions. Focusing primarily on the ‘food-to-go’ business, across these sites the company produces breakfast and lunch sandwiches, lunchboxes, parfaits, frozen foods, and sauces amongst others.
McClennon himself has taken an interesting path to where he is today, working in slaughterhouses as a youth and eventually moving ‘up the food chain’ into manufacturing and general management positions, career progressions he recalls as instrumental in both his understanding of customer service, and the private food label industry overall.
Later on, he moved to South Africa which led to him and a few of his friends founding their own food company. “We started it from scratch and built it into a $250 million-plus enterprise, which was eventually bought out by Bakkavor,” he says, adding, “I found myself in an early retirement but still with plenty of energy, and when Greencore approached me to run their new U.S division, I jumped right in.”
And it’s been nothing but success for the company since beginning operations six years ago in the United States. With McClennon at the helm, the company has averaged between 20-25 percent annual growth, and things only seem to be accelerating, with 2013 producing record revenues.
Part of Greencore’s success comes from the significant amount of research and development the company commits annually towards improving its food products and operational processes. “Between independent research and customer feedback, we make a strong effort towards being consumer led, identifying and closing gaps that may exist, and doing whatever is necessary to gain shelf space for Greencore products.”
He says that despite being a private label producer, they mimic many of the actions taken by a brand label. “Even though we are a private label, we put forth a lot of effort in understanding the consumer, instead of relying on our customers to do so, because we know if they’re winning in the market then so are we.”
‘Grab and Go’ Production
In terms of actual production, Greencore has seven manufacturing plants spread out across the country. “All of our plants are run in a uniform manner, averaging around 200-300 employees working in each facility,” he says, adding, “while we’re focused on around-the-clock production, efficiency, food quality and safety is never sacrificed, and we go to great lengths in ensuring our facilities are minimizing or mitigating the risk of product contamination.” He says these efforts include physical barriers to separate raw from cooked products, and enforcing employee regulations.
With its hands in the ‘grab and go’ food industry, McClennon says their production facilities need to be able to meet strict deadlines, making plant efficiency key. “With the exception of the frozen food products we manufacture, most of our facilities will get an order at around 5 or 6 in the morning,” he says, adding, “once the order is processed, our employees get to work and have the food ready to go by noon.” From there, he says his facilities spend the rest of the day forecasting the next day’s order, preparing the product line, and going through a multitude of hygienic procedures. “We are relentless in our work, but by working around the clock, we give our customers maximum flexibility,” he says, adding, “our ambition is to have a hundred percent service each day.”
And thus far, Greencore USA’s production facilities have fulfilled this duty quite effectively, so much so, in fact, that the parent company, Greencore PLC, agreed to invest in the construction of a brand new, 107,000-square-foot facility in Quonset, R.I. “The decision serves as a huge vote of confidence towards both the company’s initial decision to enter the United States’ market and the sustainability of our future here,” he says.
The Quonset facility will be the first facility that Green- core has invested into in over 20 years, something McClennon is particularly proud of. He says that the company invests around $100 million annually into extensions and upgrades across its international sites, but a greenfield site is something new. “The fact that our parent company, which is based in the UK and accounts for almost 80 percent of company revenue, chose to expand here in the US really instilled a sense of commitment to Greencore USA.” The facility is expected to take about two years to construct and will add between 400 and 600 jobs.
Growing Inside and Out
While Greencore USA shows plenty of signs of strong, organic growth, the company has also been recently involved in growth-through-acquisition as well. In February, the company acquired Lettieri’s, a food-to-go operator, and announced plans to invest over $10 million into its existing facility in Jacksonville, Fla. The move, which comes just over a year after they acquired Marketfare Foods and HC Schau & Son in 2012, is in response to a growing demand for convenience store food across the United States. “Lettieri’s brings us a product and processing capability that we didn’t have in our portfolio before,” he says, adding, “We’re really happy to have them in our corner now, because when you mix what they offer with what we already bring to the table, it creates a great mix that we can offer to our customers.”
Greencore USA’s growth and expansion is a sign of the growing presence of private food labels in the United States. “There’s this increased understanding that having your own retail brand provides smaller stores with a point of differentiation,” McClennon says, adding, “it’s easier for store owners to compete if they know they can only buy products from a specific store, rather than the mass market brands.” He says that overlaying this trend are the needs of the modern day consumer, who generally want fresher, healthier food, that they can also get in a quick and efficient manner. “I think the kind of short shelf-life, convenience foods that we make play well into both of these dynamics, as we’re giving both the retailer and consumer what they want,” he says.
And yet, for as much as the company takes pride in its production and quality assurance capabilities, McClennon says the partnerships they engage with their customers are equally distinguishing for Greencore. “With our customers, who run a number of establishments and have to deal with inconsistencies that are unique from store to store, we really do our best to ensure that we are providing as flexible and effective of a product on our end as possible.” He describes one such instance four years ago when a customer came to him, who had been dealing with a multitude of issues across their chain of stores, and needed a ‘one size fits all’ solution.
“He came to us and said, ‘I need a higher sense of safety, consistency, and better level of availability’,” he says, adding, “He asked us to provide a centralized nature of products that would maintain all the consistencies and quality of food made right in the store, while having the efficiency and uniformity of food produced en masse in a facility.” McClennon says they had to research and tailor their products to this individual’s unique process. “We came out with a product that the consumer wouldn’t notice a change in at all,” he says, adding, “sales have grown year after year for them and it’s examples like those where I look back with great pride and knew that we made a positive impact.
And that’s what Greencore USA is all about. McClennon says that he views his company, being in the private food label market, as a “guardian of [our] retailers’ brands,” adding, “we put food safety and quality above all, so that we know when our products go out of our plant, and have our customers’ brands printed on them, they can be sure that their consumers are getting exactly what they want and need.”