"Self-inflicted." This was the phrase Greencore boss Patrick Coveney used to describe the company's difficulties in the UK last year. It reaped an avalanche of negative publicity in October after revealing it had gone to Hungary to hire workers for its flagship sandwich plant in Northampton.
A throwaway remark by a spokesperson, suggesting the company had been forced to recruit abroad because no one in Britain was willing to do the work, exploded into a fractious national debate about immigration and the minimum wage.
The media storm – led by the Daily Mail's provocative headline, "Is there no one left in Britain who can make a sandwich?" – also put Greencore's own employment practices and wage structures in the spotlight. "What was a source of great frustration to me is somehow we allowed ourselves to be characterised as an irresponsible employer," Mr Coveney said at the company's agm in Dublin yesterday. In the context of the UK grocery industry, "we are sought out by many people as a desirable employer".
Mr Coveney said no more than 10 per cent of employees, including agency staff, were on minimum wage – currently £6.50 an hour in Britain – and that it did not employ people on zero-hour contracts.
Was the storm now over?
“Those things [immigration, minimum wage, zero-hour contracts] are matters of important public policy in the UK and they’ll play out, whether or not they’re specifically connected to Greencore.”
Strong clients
The Northampton controversy overshadowed what was another strong year for the company with revenues significantly outperforming the sector. In the UK, where most of its €1.6 billion in annual sales were generated, it boasts a client list that includes Marks & Spencer,
Waitrose
, Sainsbury’s and
Tesco
. In 2014, the company solidified its footprint in the US on the back of lucrative contracts with
Starbucks
and 7-Eleven. In his address to shareholders, Mr Coveney outlined the company’s increasing focus on the food-to-go market, which accounts for 55 per cent of its business. He said the company was well-placed to capitalise on the blurring of boundaries between traditional food service outlets and the retail sector, a trend known as “switching”. Mr Coveney said the London-listed company had undergone a strategic transformation, with growth now based on exploiting “long-standing, multiyear supply agreements” with clients rather than market growth or acquisitions.
The company’s plant in Northampton, where it employs 1,100 and has plans for a new €38 million facility, is a case in point. It will be entirely dedicated to supplying the Marks & Spencer chain with sandwiches.
US plant
On the back of its US contract with Starbucks, it unveiled plans for its first plant on the US west coast – in Seattle,
Washington
– where the coffee giant is headquartered.
Greencore shareholders, who enjoyed a 21 per cent bounce in the value of stock last year, seemed more concerned, however, with the time it took to process dividends, and the possibly of the agm being held outside Ireland next year.
