Mr Kipling sales up 10% as own-label cakes fall a third

Premier Food’s Mr Kipling brand is continuing to grow following last year’s relaunch, with sales up 10% in the past quarter.

The brand, which is to be expanded in the coming months with a premium range of Signature cakes, was also bolstered by further TV advertising.

Cadbury cake sales grew over the quarter, with Premier saying the brand had benefited from the later timing of Easter compared to 2018 and improved seasonal ranges for the Easter period.

However, the company’s own-label cakes business – which fell by 20% in the firm’s last financial year – has taken a further hit, with the decline accelerating to 37.2% as Premier exited lower-margin contracts.

As a result, turnover from Premier’s Sweet Treats division was up 0.6% year on year, with total branded sales up 7.1% in the 13 weeks ended 29 June.

In the first quarter of the year, Premier Food’s total sales rose 1.1% compared to the prior year, with branded sales up 2.9% and own-label down 8.3%

International sales were down 18% and had been held back primarily due to slower sales in Ireland.

“This was due to the unwinding of Brexit-related stock in Irish customers’ supply chains,” stated the company in its results. “The International business is, however, expected to return to sales growth in subsequent quarters.”

Acting chief executive Alastair Murray described the results as an encouraging start to the year.

“As we previously noted, we are increasing our consumer marketing investment this year and both Mr Kipling and Batchelors have already benefited from TV advertising campaigns in the first quarter,” he said.

“Many of our largest brands have built on strong category positions and grown market share, and we achieved branded growth in the quarter of nearly 3%. These figures provide evidence that the company’s strategy is delivering results. Our expectations for the full year remain unchanged.”

Premier is continuing its search for a chairman as Keith Hamill steps down today (17 July), as well as a chief executive following the departure of Gavin Darby in January.