Bakery firm is cooking up the sweet taste of success; IN ASSOCIATION WITH Rensburg Sheppards Alistair Houghton meets STEPHEN HESLOP, chief executive of the Real Good Food Company The Profile.

Byline: Alistair Houghton

WE MAY be a nation of increasingly fussy eaters - but, to Stephen Heslop's relief, Britain shows no sign of losing its collective sweet tooth.

Heslop is chief executive of both the AIM-listed Real Good Food Company (RGFC) and its Liverpool-based baking ingredients division Renshaw Napier, which makes caramel, marzipan and icing for confectioners and retailers.

RGFC this year moved its headquarters to Liverpool as part of a cost-cutting drive that has also seen it merge two of its divisions.

The group has grown through acquisitions, something that will be tough to continue in today's credit-starved climate. It recently had to cut its profit forecast thanks to deteriorating market conditions.

But Heslop says the company will not be standing still, but will instead be looking to source and develop new products to stay ahead of the game.

And he says that, despite the barrage of healthy eating messages they face every day, British people still love treating themselves with sweets, biscuits and confectionery.

He said: "Healthy eating has been around for quite a number of years. We certainly have seen no decline in our sector.

"The healthy eating agenda has led to a move away from hydrogenated fats. Over two years ago, we developed all our recipes to have non-hydrogenated fats. Most things that affect our sector have been addressed - we don't use products that have enumbers.

"Consumers will always want to treat themselves. There's no evidence that's changing."

Renshaw Napier's Liverpool plant, in Crown Street, Toxteth, produces baking ingredients including marzipan, icing and caramel. Its products are sold to wholesalers, to retailers and to some of the biggest names in the food business including Nestle, Heinz and Mars.

Renshaw Napier also has a factory in Carluke, Scotland, producing jams and preserves.

RGFC also owns Wiltshirebased Hayden's Bakeries, which makes desserts and patisseries for clients including Marks & Spencer and Waitrose.

Renshaw's Liverpool plant stands near the vanished Crown Street Station, the terminus of the Liverpool and Manchester railway. Taking visitors around the Renshaw site, Heslop always points out a handful of stones embedded in the ground - stone sleepers from George Stephenson's original line which was, when it opened in 1830, the first inter-city railway ever built.

Renshaw is itself a company with a proud history. It was founded in 1898 by JF Renshaw before it was bought by German group Schwartau, in the 1990s.

In September, 2004, the then Renshaw Scott was bought by sugar specialist Napier Brown, for pounds 18.5m. A year later, however, Napier Brown was itself taken over by RGFC in a pounds 67m deal.

RGFC was founded in February, 2003, by corporate financier Pieter Totte, who remains the group's non-executive chairman.

He began hunting for food firms that were either under-performing in their sectors or were noncore parts of larger businesses.

In July, 2003, it bought three companies, including Hayden's Bakeries. The following May, it bought Grimsby-based Five Star Fish, which it sold in September, 2007, for pounds 35m.

Napier Brown had its headquarters in London, which RGFC also adopted, but last year the group decided it would cut costs by closing that office and relocating the handful of staff who worked there to Liverpool.

Heslop said: "In the current economic climate, it doesn't make sense to keep an office in London when our production facilities have office suites."

The Liverpool site last month took on even more importance when RGFC merged its West Yorkshire-based Napier Brown business with Renshaw to form new operating business, Renshaw Napier, which is based here.

RGFC said the merger would deliver annual savings of pounds 800,000 from next year.

Heslop said: "A lot of the products were complementary and there were a lot of opportunities for crossselling.

"We also saw a gap in the market for us to buy new products in and sell them on. We can offer a broader range of products to our clients, which is a real opportunity for us."

County Durham native Heslop started his career as an engineer in the steel industry, but soon moved into the food and drink industry with brewer Grand Met, and has worked for companies including RHM and Homepride.

He joined RGFC in 2005 to lead its ingredients arm, and became group chief executive in 2007.

Heslop lives in Liverpool during the week, but every weekend travels back to his home and family in Fife, Scotland.

RGFC secured a refinancing deal last July with Belgian bank KBC, and Heslop says the company has a very positive relationship with its financiers.

That will come in helpful in what remains a tough market. In December, RGFC said all of its trading divisions had been hit by the downturn and cut its profit forecast for the second time since September. It now expects a fullyear profit of pounds 500,000 - down from September forecasts of pounds 3m.

Heslop says the company is focusing both on reducing its costs and exploiting markets that are still growing, such as the home baking sector.

He said: "The market as a whole is very cost-conscious.

"It's a difficult year, but it promises different opportunities.

"We are focused on organic growth.

"We are making sure by exiting our London office and consolidating that we are making the business fitter.

"In the last 12 months, we have looked at a lot of alternative ingredients to make sure we get the best cost performance.

"But we also need to make sure we have the best resource possible to develop new products.

You won't get growth by sitting tight and tightening your belt."

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People will always want treats

Q&A

Highest educational qualification: Diploma in management studies

Best advice: Whatever decision you make, always be aware of the unintended consequences

Proudest achievement: Qualifying for the London Marathon by right, after running a qualifying time of 2m 40s in 1992

Biggest regret: Not having joined the Army

Still to achieve: Competing in a British Show Jumping Association open competition

CAPTION(S):

Stephen Heslop on the caramel production line at RGFC's Crown Street plant, Liverpool Picture: ANDREW TEEBAY/at290109brenshaw-1