Tesco is not the only food and drink heavyweight with grand plans across the pond. Greencore - the world's largest sandwich manufacturer and one of Europe's leading convenience food producers - is also intent on empire building in the US and David Dilger, its chief executive of 12 years, reckons its chilled convenience model is just the ticket.

Greencore, which also makes 40% of the UK's chilled sauces and 10% of its chilled soups, sent a scouting party to the States last October. It has been looking at the West Coast, the Tri-State area, East Coast and Chicago as potential areas to move into. Like Tesco, the business is biding its time and assessing the market "prudently and carefully", says Dilger in an exclusive interview.

"The food economy has gone down a different route in the US, with foodservice more popular than premium own-label," he says. "However, Americans are now looking at the UK and seeing whether they can replicate its market. The level of interest in the UK food market is increasing.

"The question we have to answer is: 'Is there something really interesting that can be done in the US that is suitable in the long-term and that only Greencore can do? If not then there is no point in us even trying in America."

Despite a level of caution, Dilger is confident the answer is yes. "It's our expectation to build a big business there. We wouldn't have made the financial or people investment if we weren't hopeful. But we're also realistic. US consumers haven't been waiting for Greencore with their hands together praying they can be fed. Nobody is grieving because we haven't arrived yet."

One way into the US could be supplying Tesco when it opens its Fresh & Easy Neighborhood Market concept there later this year, although Dilger does not divulge whether Greencore has been speaking with Tesco.

However, if it does succeed in breaking into the US, that doesn't mean it will take its eye off the ball over here, he insists. In the UK he is looking at broadening the company's horizons beyond supplying the multiples.

"We're interested in the business model that gives us the ability to feed the nation through the multiples but we're also looking more closely at foodservice and forecourts," he says. "About 47p of every pound is spent in channels other than the multiples and this is appealing for us.

"We're not only interested in money from the multiples, we're interested in the whole pound. Forecourts are an exciting channel and a tremendous growth area. It requires us to build on and diversify the business but if that's what it takes then that's what we will have to do."

Dilger has the track record to suggest he could deliver on both fronts. Since becoming chief executive in 1995, three years after he'd joined the business he has transformed it into one of Europe's leading chilled foods groups.

In 2001, he masterminded the acquisition of Hazlewood Foods and since then has almost doubled Greencore's market growth, boosting operating margins from 4.8% to 7.8%.

The company has also successfully managed to build a frozen pudding brand - Pudz, which was launched last year.

The acquisition played its part. But Dilger puts much of this growth down to an effective cost-management strategy, with particular focus on waste reduction, process automation and purchasing efficiency.

"We haven't done it by putting prices up for customers and we haven't found a magic wand - it's just by working hard," he says.

"It's down to relentless cost management. We also aim to provide our customers with the best value prices for really good products - not poor quality cheap ones. But I don't think we're unique on that. Our mandate is to manage our business better than others."

To do this, Greencore will be working hard to address environmental issues and reduce the company's carbon footprint. While Tesco has announced that it will not be adopting the Carbon Trust's labelling scheme, Dilger says that for any scheme to take off retailers and manufacturers need to adopt a uniform standard.

"Collaboration is the answer," he says. "Having a common standard will be important because the measurements are so complex. It would be helpful for an organisation such as the British Retail Consortium to manage it because the challenge is coming up with a measurement that's easily communicated, stands up to scrutiny and means something to consumers."

Dilger is also keen on improving the company's relationship with retailers as it grows but is adamant a business does not need to be big to be successful. "Size is seen as being all-important and we have to rail against that quite hard," he says. "We don't want to be the world's biggest food manufacturer. We have no intention of being the biggest - we want to be the best."

While he won't speculate on why Greencore's approach is proving more successful than its direct competitors, such as Northern Foods, he admits to keeping a close eye on their performance and benchmarks his company's progress against them.

He was sympathetic about the bashing ex-Northern Foods' chief executive Pat O'Driscoll received from analysts and the industry during her time at the company. "I felt for her. I have been through it myself and I don't know if you ever shake it off. You have to develop a thick skin."

However, he accepts that a certain level of criticism comes with the territory. "We are well paid for what we do and we shouldn't be moaning and thinking we have a heavy cross to bear. There are people in this business who would give their eye to carry that cross."

He is just as pragmatic about his own fate and that of Greencore, and acknowledges the company could well be a target for the private equity companies circling food and drink manufacturers at the moment.

"Every public company is a target," he says with a shrug, "but I don't give it a second thought because, as a public company, we can't choose our shareholders. I'm good at not worrying about things I can't do anything about.

"If we can maximise profitability then ownership will take care of itself. If you can't do that then you don't have to have a wonderful imagination to work out what will happen next. There's a fortune of private equity money out there at the moment and, unless we continue to do a great job, there are plenty of other people who will do it for us."n



Q&A



What do you think of the Competition Commission's investigation into the grocery market?

To be honest there are another 400 things on my agenda and the outcome of the Competition Commission's investigation isn't even number 401 on the list. It's important that we work in the world as it is, not as we imagine it might be in the future.

What is one of the key issues in the industry at the moment?

Food safety. Food is safer than it's ever been, yet we're seeing more product recalls. The regulatory authorities face a real conundrum because there is no risk for them to insist on a product recall, but there's a huge level of perceived risk in not doing one. Recalls are costly and potentially damaging for the industry. We know the food we produce is the safest it has been and we're doing everything in our power to continue to ensure that remains the case.

Describe your typical day.

The wonderful thing about my job is that there is no typical day. Every day is different and brings new challenges.

How do you relax?

When I find time to have a break I like to play a round of golf or, failing that, have a gin and tonic. Preferably in that order.

What has been the best moment of your career to date and why?

Being appointed CEO of Greencore in 1995 has been a real highlight for me because it was something that I wanted for a while.

And your worst career moment?

Not being appointed CEO of Greencore in 1992.

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