USA- Premier Foods, the owner of popular brands like The Spice Tailor and Mr. Kipling, is making moves to bolster its international presence by increasing distribution destinations, with significant gains reported in its recent quarterly results.
The company highlighted its exceptional Christmas performance, showcasing a “biggest ever” achievement and emphasizing its progress towards exceeding previously raised profit expectations.
CEO Alex Whitehouse reported that Premier Foods built on its first-half market-share gains, securing an additional 121 basis points in the third quarter. The gains were consistent across both the grocery and sweet-treats segments, reflecting a robust performance in core business areas.
In the reported quarter, group sales surged by 14.4% to £352.7 million (US$448 million), with the branded portion of the business experiencing a notable 12.7% increase. The grocery-branded sales rose by 11.6%, and the branded sweet treats segment witnessed a substantial growth of 17.1%.
Premier Foods made strides in expanding its overseas businesses, with international sales increasing by 11%. The Spice Tailor and Mr Kipling, two key growth brands, secured additional overseas listings, including in the United States, Canada, New Zealand, Belgium, Switzerland, and France, and a distribution boost in Ireland.
Mr Kipling, a well-known cake brand, gained ground in North America with approximately 3,000 stores across the region. This expansion puts Mr Kipling in more stores in North America than in Tesco in the UK, highlighting the brand’s success in penetrating new markets.
Building on its 2022 acquisition of The Spice Tailor, Premier Foods is exploring opportunities for the UK cereal, snack bars, and milk drinks brand Fuel10K in overseas markets.
While Premier Foods implemented price cuts on some products in response to inflationary pressures, the company announced that lower prices would be extended in the fourth quarter for the Loyd Grossman cooking-sauces brand and Mr Kipling Bakewell slices.
Despite the pricing adjustments, Premier Foods anticipates trading profit to be around 10% ahead of the previous year.
CEO Alex Whitehouse acknowledged that the positive impact of pricing on top-line growth experienced last year would start to diminish in the fourth quarter. He expressed confidence that the company would return to more normal levels of top-line growth in the next financial year, balancing between volume and price mix.
In response to questions about potential deflation, Whitehouse ruled out the prospect but noted that Premier Foods does not foresee the need to increase pricing next year, barring unforeseen circumstances.
He explained that the company has adjusted promotional pricing in areas where they anticipate the most significant price elasticity, aligning with the evolving dynamics of cost inflation.
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