Cash boost leads to expansion plan

Sep 12 2007 by Andrew Mernin, The Journal

A GOURMET ready meal company is poised to double its workforce to 60 in the next 12 months after receiving a £400,000 cash boost.

Consett’s Tanfield Food Company, which is run by the founders of the Phileas Fogg snack brand, has announced plans to expand its operations after receiving a hefty loan from Gateshead-based lender Evolve Finance.

The company, which supplies high-end ready meals to around 650 branches of supermarket chains Sainsbury’s, Waitrose and Booths, expects annual revenue to jump from £5m this year to £8m in 2008.

Tanfield Food was founded in 2004 by Roger McKechnie and Keith Gill who came up with the idea for Phileas Fogg crisps when they ran Derwent Valley Foods, which they later sold to United Biscuits.

The business has flourished since its inception although it hasn’t lived up to the ambitious targets set out by its creators following its first year in the market. Three years ago the company said by 2008 it would employ 90 people and have an annual turnover of around £15m.

Current estimations fall short of these targets with staff numbers rising to 60 next year while annual revenue climbs to £8m.

Mr Gill said the reason for the change in fortune at the firm was because, in 2005, the company planned to enter the food services sector – a move that would boost revenue significantly by supplying food to restaurants.

In the end the firm opted to concentrate on developing new products, although it hasn’t ruled out a foray into the food services sector in the future.

Mr Gill also said the company had discovered certain equipment last year which made its operations less labour intensive and so it hadn’t needed to employ as many people as was originally planned. Today the firm continues to grow its client base and earlier this year landed a three-year contract to supply meals to British Airways.

It intends to use the £400,000 loan from Evolve Finance to develop its pour-over-sauce and gourmet soup products.

In a bid to capture new customers the company is also testing the popularity of its products in what it calls “unusual locations”.

It is currently running trials on Virgin Trains, at branches of beverage retailer Thresher and in stores of outdoor equipment retailer Millets.

Evolve Finance provides funding to small and medium sized enterprises and is a subsidiary of Gateshead-based finance group NEL Fund Managers.

Joanne Pratt, investment executive at Evolve, said: “The team at Tanfield Food Company put forward a concise business plan.

“As a newly established company they just needed to bridge the funding gap to help take the business forward.”