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Whipping up a storm.

What do you call a layered caramel countline bar? A sweet? A snack? Or a lunchbox filler? One confectioner simply calls it a big opportunity.

Following a 2.5m[pounds] investment in plant at its Newport base, Lovells now claims to be one of only three UK confectionery companies able to make layered caramel lines and it is about to take on a massive multinational with an established brand leader.

Lovells, the Gwent confectionery firm, is a fighting company. Take for instance this latest move, the creation of the caramel layer bar - and for that read Mars bar. You'd be mad to mess with Mars, but Lovells aims to nip at its heels and take around 10% off its sales (around 6m[pounds]-7m[pounds]) with either branded or own label lines, according to sales and marketing director, Neil Jenkinson.

And he has nothing but admiration for future rival Mars. He comments: "It's a big empire, and a superb brand with brilliant marketing. All in all, it's a helluva company and a helluva product." He adds: "But essentially it's just a caramel layer bar."

Jenkinson is realistic, not only about the bar but also about the market he's in: "If I tried to pass it off in black, red and gold packs, they'd nail me to the wall but we aren't going to produce a lookalike. There will be trouble, but it's the way our market is going. We've taken the price down where no-one else can follow." "Just look at cola where the brands have been knocked off," he says. "The chains will have a go at confectionery too - there'll soon be a Tesco bar, and a Sainsbury bar, it's a natural chain of events."

The company has been working on the recipe for nearly a year and has already spent 120,000[pounds] on NPD to get the product right. As for the future, other products on the go include a caramel peanut bar (similar to Snickers), a whipped bar (Milky Way), and a coconut countline (Bounty).

Lovells' big advantage is price. "They won't follow us down that route," says Jenkinson. That's a sign of the confidence the firm now feels, and never has the optimistic term "under new management" seemed more appropriate.

It was established in 1884 and had been family-run for three generations, but by 1989 losses were running at 500,000[pounds] Jenkinson's big break came when he was brought on board by Albrighton, a building company that had bought Lovell's for its PLC status. Having worked for Cadbury, Swizzels-Matlow, and Needlers, Jenkinson was well experienced to try to turn round the company which he describes as a classic old style confectioner suffering from the effects of the recession.

Jenkinson is frank about the company's position in those early days: "We were stuck at the bottom end of the sugar confectionery market, and it wasn't the place to be. It was all about low price and supplying the junk end of the market to CTNs and multiples. It was going nowhere."

But the firm spotted a niche. in the children's market where it was one of first to go into kids' self-purchase 10p lines. The company two year clear all the proceeds pumped back company. Now however, the market has changed and even the big manufacturers, like Cadbury, have homed in. Jenkinson was part of the 1991 mbo, and since then turnover has trebled with annual profit now over 500,000[pounds]. The change in fortune has brought not only the recent investment but a change in strategy.

The changes have already begun - June saw the launch of an assorted "whip" bag, followed in July by whip pieces in drums and lunchtime packs. The caramel bar is another stepping stone, and in a confectionery market where three players take around 82% of sales, Jenkinson believes there may just be room for one more: "I see a massive opportunity - and it's all wide open."
COPYRIGHT 1995 William Reed Ltd.
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Copyright 1995 Gale, Cengage Learning. All rights reserved.

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Title Annotation:strong growth at Lovells
Publication:Grocer
Date:Sep 16, 1995
Words:658
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