The business is vertically integrated; 100% of chickens and c.60% of pigs are bred, reared, fed on grain grown and milled on Cranswick farms, processed and then packaged inhouse.
Revenue growth is derived from a strong track record of disruptive capture of market share, having focussed investment on genetics, automation and hygiene to a far greater extent than rivals. Cranswick has become the UK’s largest pork supplier and established itself in the chicken market. Margins are protected from volatile commodity and carcass prices by an increasing number of cost of production linked contracts, the value of which has been particularly evident given recent elevated levels of inflation.
Unsurprisingly Cranswick was a big pandemic winner. As restaurants and cafes closed consumers treated themselves to higher quality home cooked food. Since then the share price has been punished despite a strong financial performance in 2022. Whilst the macro backdrop might be a concern for premium products, the diversified portfolio of relatively cheaper proteins (vs red meat/fish) could offer resilience.
