The key year shows that green credentials have increased amid investment in the future
PROMINENT Scottish ice cream maker Mackie’s has achieved its highest ever UK market share after adding almost half a million customers in England, Wales and Northern Ireland.
The major breakthrough came despite tough times in the ice cream sector, with the overall market down 7.4% over the same period.
Record rises in the cost of ingredients, transport, feed and fertilizer have combined to make the outlook challenging and unpredictable for Scotland’s most popular ice cream company.
Mackie’s says the growth of UK customers compared to the traditional Scottish market and early adoption of renewables has helped them offset rising costs and build for the future.
Kantar Worldpanel said the ice cream maker’s customer base in England, Wales and Northern Ireland grew from 939,000 in 2021 to 1,424,000 in 2022.
Mac Mackie, executive chairman and one of the three family owners of Mackie’s, said: “We are laying the foundations to become a larger business that will be even better equipped for growth in the years ahead.
“It was a turning point in our history. We have seen this encouraging change in sales and sales south of the border, mainly as a result of our win and expansion of second line listings for our honeycomb ice cream in a number of supermarkets, including Sainsbury’s.
“For a long time, our Scottish customers have had a wide range of flavors to choose from in our ice cream, but those living in the rest of the UK have usually only been able to reliably get their hands on our best-selling traditional flavored real milk ice cream. We are excited to attract new customers and are determined to build on the success of these new listings.
“It’s also been a very difficult year because of the scale of the cost increases we’ve been exposed to. While this looks set to continue and get worse, we have solid plans in place to ensure the family business weathers the storm and continues to be successful for generations to come.”
The Aberdeenshire-based company had revenue of £17.7m and pre-tax profit of £1.7m, according to its annual accounts for the year ending 31 May 2022. This profit was down 59% on the previous year’s record highs (£4.1m). positive returns above initial forecasts. Since then, revenue has recovered thanks to strong sales, with the calendar year matching previous sales records, although profits are forecast to fall further in light of a sharp rise in costs.
The much broader contraction in the ice cream market over the same period is attributed to rising cost pressures and the market’s recovery from a spike in takeaway ice cream sales during the pandemic.
The period under review also saw Mackay’s continued commitment to returning investment to the business, notably culminating in a £4.5m spend on one of Europe’s most efficient and advanced low-carbon cooling systems.
The cooling system, which is currently partially operational and will be fully deployed in the coming weeks, will reduce energy consumption related to cooling by up to 80% along with the carbon footprint. This will allow Mackie’s to make more efficient use of its vast renewable energy capacity with a 7,000-panel solar farm, four large-scale turbines and a biomass plant that together produce twice as much energy as the business uses as a whole.
Further investment saw Mackie’s upgrade its filling machines to significantly increase capacity and bring most of its sauce production in-house with investment in state-of-the-art equipment, allowing it to source the fruit it needs for its compote from local farms.
The investment program also includes further improvements to the packaging plant, as well as the implementation of a market-leading enterprise resource management tool to optimize internal processes.
Newly appointed managing director Stuart Common commented: “Like all businesses, we are facing significant challenges arising from rising costs across our operations, which has led to careful negotiations with our retail customers, while we do everything possible to manage and absorb the increase that might otherwise be passed on to the general public.
“Despite the pandemic-related restrictions, we have maintained export sales of over £2 million, which includes increased exports to the US, creating an exciting opportunity for growth.
“We have committed to unprecedented levels of investment in our operations to make our business more efficient and sustainable, as well as to be better insulated from some rising costs and to position us for continued future growth. More than £850,000 has been invested in plant and equipment in 2022, including a new ice cream filler, which will give us more opportunities for new products and increase our capacity as we look to continue to grow.
“I believe that our long-term strategy for caring for the planet and investing so heavily in renewable energy now gives us the tools to create a competitive advantage that allows us to continue to offer consumers premium dairy products at what we believe to be an affordable price, especially in compared to many other premium products in the market that had to grow higher and faster.
“Our sustained investment is now paying dividends, helping us navigate this challenging period, expand our market presence and increase our contribution to the local and national economy for years to come.”
To find out more about Mackie’s of Scotland, please visit: www.mackies.co.uk