Growth in the discount and value sector helped Northern Foods to report an increase in sales last year.
The company, which is better known for supplying food to the major supermarkets including Marks and Spencer, said today that the cheaper retailers now accounted for a fifth of sales.
Customers on the value end of the spectrum include Aldi and Poundland.
"We have successfully adapted the business to the current retail environment, responding quickly to the recession with new value products and discount ranges alongside our core market and premium heartland," the company said in a full-year results statement.
"Our business with the discount retailers, or based around value products, is now around a fifth of the group's sales."
The company also reported a strong performance at its chilled food and bakery opeartions and but said its frozen division had been affected by the strength of the euro.
Total revenue in the year ending on 28 March increased by 4.6% to £975.2m.
Profits were just £2.5m after restructuring costs of £35.4m and tax allowance changes.
However, the company maintained its dividend of 4.5p, while it reported that net debt had edged up to £206.7m.
Chief executive Stefan Barden warned of a tough year ahead: "We anticipate that next year will be equally challenging, with the continuation of food inflation and competitive pressures.
"Our operational and financial strengths position us well to benefit when markets recover."
Shares slipped in early trade by more than 2% to 59.5p.
