On an eventful 2022 and an exciting Strategy 2030

How do you look back on your first full year as our CEO, Piet?

Well, it has been a very demanding yet interesting year, in which we faced quite a few challenges. My main takeaway is that we have a strong and experienced team that dealt well with the bumps in the road and that is ready for the hurdles we will have to overcome in the future. Whatever came our way, we were united as colleagues, we showed resilience and made the best of this turbulent period. Looking back on my first full year, that’s what makes me really proud.

Can you tell us a bit about the challenges we faced?

For starters, the post-COVID supply issues were of course followed by the conflict in Ukraine. The war has upset both the raw materials and packaging materials markets, as well as leading to the current energy crisis that has caused such a dramatic increase in the cost of virtually everything we purchase. Secondly, yields of tomatoes and other crops hit a record low due to last summer’s drought, while the extra feed-costs went up, and meat protein costs with it. Then there were the fl are-ups of diseases like bird flu and African swine fever, which further disturbed the meat markets.

The general rise in salaries in 2022 and the exceptionally steep increase due to the automatic salary indexation in Belgium in January 2023 inevitably put pressure on our cost structures. Yet I am very happy and proud to see that, throughout all of this, our people continued to bring an impressive degree of passion to their jobs and the products we make. Their commitment to getting the most out of every day is nothing short of inspirational.

What are your thoughts on the results of 2022?

We had an ebitda of 46 million euro in 2021, and our overall increase in costs in 2022 added up to nearly twice that amount (about 85 million euro). I believe that, while we should not be satisfied with these results, they are in line with the huge challenges we had to overcome and the circumstances we found ourselves in. As a predominantly private label producer, it would not be fair to compare ourselves to the power brands out there.

How did What’s Cooking? deal with these exceptional circumstances?

We saw our people excel and act as one team. Cross-disciplinary units were a great help in assessing our continuously changing procurement situation, and in renegotiating fair prices with our customers in all openness, even if delays prevented us from sharing all the cost increases. We used the situation as an opportunity to eliminate some risks from our business model, replacing the system of fixed annual pricing with prices linked to key material indexes – again in transparency with our customers.

We subsequently developed our cost-saving approach into an overall program called “Drive”, which serves as an umbrella project for our various efforts to economise, for our customer-focused value-optimisation initiatives as well as our improvements in process-efficiency, all governed by cross-disciplinary teams. Thanks to the resulting rise in productivity, we managed to arrive at an acceptable price increase for our customers.

The exceptional circumstances also made us reflect on how we could improve some of our categories and create more value for our customers. The MaLaGA project – Make Lasagne Great Again – is a case in point. We dug into the 3,000-year-old history of this beloved dish, which spans from its invention by the ancient Greeks to its popularisation by the Italians, rekindling everyone’s fascination with its superb taste and fantastic ingredients, the craftsmanship we put into cooking our lasagnes, and the great care with which we package them.

Finally, last year’s challenges encouraged us to tackle our Strategy 2030 exercise with an open mind and no fixed preconceptions about the future.

Can you walk us through the main points of this Strategy?

Our targets for customer-value creation can be summed up as, on the one hand, providing sustainable, profitable growth and thereby delivering on our financial commitments. On the other hand, we aim for – and will never compromise on – world-class (food) safety. This ties in with six strategic beliefs, namely: our belief in engaging employees, rebuilding innovation, refocusing our portfolio, encouraging excellence, pushing for digital acceleration, and taking industry-leading sustainability initiatives.

In other words: our overall goals are to keep food safety and the safety of our people at the top of our priority list, and to create a steady and sustainable profit growth for What’s Cooking? that is aligned to our shareholders’ interests. These are not “strategic choices”, but rather the fundamentals of everything we do.

I would like to take a moment here to zoom in on our portfolio refocus. The key priority is to develop great-tasting and affordable plant-based products. We want to lead our categories in these more sustainable and nutritious foods, in both What’s Cooking? divisions, which we are now calling Strategic Business Units (SBU). We have renamed “Processed Meats” to “Savoury” to underscore that it’s no longer about meat, but rather about providing consumers with slices, spreads and snacks that will increasingly contain proteins other than meat-based proteins. Our “Ready Meals” Strategic Business Unit, in turn, will focus on what we call “local heroes”: meals that are popular in the countries where we operate, prepared with love and care for people and planet. To come up with differentiating value propositions for our customers, we will accelerate our investments in innovation. “Products”, “Packaging” and “Processes” will be the main focus of our R&D activities. Considering all this, I strongly believe that we can lead our industry in sustainability.

As you can read throughout this report, we will walk the talk, focusing on a few ambitious yet achievable goals, not just preparing for the rules and regulations that are coming our way, but collaborating with all our partners in the value chain – farmers, suppliers, and customers – to do the right thing for both people and planet, and to make our industry more future-proof. For example, by 2030, we aim to reduce our food waste by 50% and our carbon footprint by 50%. By 2030, we want 15% of our products sold to be plant-based and to cut the number of workplace accidents by half.

It is more important than ever that we are united as a group. This idea underlies our preference for the term “Strategic Business Units” to refer to what were previously called “divisions”. We focus on our customers together, across all departments, and we ensure that our team members are motivated to go the extra mile. Indeed, employees who feel engaged are the key to creating sustainable results.

What is the story behind the new name for our company?

Together with our Board, we wanted to underline the real changes that will follow from our Strategy 2030. These call for a very visible shift: a new name for our company. The question “What’s Cooking?” illustrates that we are eager to know what is happening in the world around us and to regard changes as opportunities. It shows that we will always take great care to create exceptional recipes – not just products – for our customers and the end consumer. Lastly, we ask all our stakeholders “What’s Cooking?” This open question encourages discussion and triggers new solutions.

Thank you, Piet, for your inspiring answers and for giving us a look into the exciting future of What’s Cooking?

What’s Cooking? Annual report 2022

What’s Cooking? Annual report

Yves Regniers, CFO