Bright future for IAWS in North America
Hortons is the Irish group’s joint venture partner in the baked bread operation that has seen the Irish promoter of in-store bakeries pump €200m into the link-up with Hortons.
IAWS owns La Brea in the US also and its Cuisine de France is the other big driver of sales for the group along with Delice de France, the British-based producer of hot finger food that continues to gain strong sales in Britain and Ireland. For IAWS getting the entire US package to come together is the next big strategic move the group has to deliver on if it is to continue its highly impressive growth.
La Brea cost it close to $70m and Tim Hortons involves a capital investment of €200m.
Hortons gives IAWS access to more than 2,500 outlets across Canada and the US.
With a new La Brea bakery on the east coast, IAWS hopes to deepen the level of distribution across the US.
The big question on everybody’s lips is will the US go all healthy. While concern with obesity has risen dramatically, that concern is spurred by the medicos rather than any deep re-evaluation by the citizenry about the reality that they are eating themselves into gargantuan masses of blubber.
Already the world is witnessing the once impregnable McDonalds being brought to heel because of the obesity scare.
The number one consideration analysts fear could undo the IAWS sweep across Canada and the US is the Atkins diet.
Atkins can no longer be dismissed as simply a fad however. Suddenly the “carb” factor is on the lips of all those concerned with weight and healthy eating.
Atkins, even if he was overweight when he died of a heart attack, has had a serious impact on world consciousness, even if he failed to take heed of his own insights.
Not that Atkins is revolutionary. That carbohydrates pile on the pounds, as does fat, is well known. Atkins just made millions out of retelling the tale.
Another concern that has been raised about IAWS is the near total exposure of the group to the bread market. It seems, however, that critics have been getting over-exercised about Atkins and IAWS following the changes at the top that saw Philip Lynch relinquish the chief executive’s chair to Owen Killian some time back.
Killian was, however, part of the strategy that took the group down the par-baked bread route and is pretty familiar with the thinking that led the group in that direction in the first instance.
With Lynch installed as group chairman, the future of the group looks pretty secure.
Some months back, IAWS announced a 26% jump in profits before tax.
With that kind of increase fears about where Hortons and Atkins might leave the group in the coming years look to be seriously misplaced.
Also the shares, consistently one of the best performers in the Irish market over the past 10 years, put on about €3 in the past 12 months, suggesting the markets have little if any fear for the future. Insofar as one can judge, the breads on offer by IAWS in the US and Canada will be a step-up from the more ordinary fare most consumers have had to contend with in the past.
If anything, the breads on offer look as if their time has come. If that is so, the outlook for the group over the next five years looks extremely promising.
Any serious setback to the US economy could do more damage to the group than any perceived threat from Atkins or a shift to healthier diet, even if the Cuisine range is nothing more than well-presented high carb white dough.
