Sales of branded products in Premier Foods’ sweat treats division fell almost 11% in the last quarter following problems with a production line.
In a trading update for the 13 weeks ended 31 December 2022, the business reported total sales from the division were down 0.9% year-on-year.
Non-branded sales were up 22.8% over the period on the back of high prices and continued gains from pies and tarts contracts.
Mr Kipling sales rose in the quarter, following growth in Angel, Lemon and Chocolate slices. Premier said the launch of new non-HFSS Mr Kipling Deliciously Good Festive Pies had helped the brand gain market share in the mince pie category.
But the increase in Mr Kipling sales could not offset the impact of unscheduled maintenance to a Cadbury cake plant line, resulting in the 10.8% slump in total branded sweet treat sales. The work on the line, which took several weeks, has now been completed and full production has resumed, said Premier.
Mr Kipling also performed well overseas, with double-digit percentage sales growth and share gains in Australia. And, after a successful test of Mr Kipling in US Target stores, Premier is looking at opportunities to expand distribution.
Premier reported a 12% year-on-year increase in sales across its total business in the quarter, with branded sales up 8.8%.
“We delivered a strong trading performance in our important third quarter,” said Premier Foods CEO Alex Whitehouse. “Many of our leading brands grew strongly, with established seasonal favourites including Ambrosia custard and new launches such as Bisto pigs-in-blankets gravy granules all proving very popular.”
He added that input cost inflation remained at elevated levels, and that the business was continuing to take action to offset inflation.
Premier also announced plans to close its Knighton site, which makes non-branded powdered beverages, stating it was not aligned to the company’s branded strategy and is marginally unprofitable.
“It is recognised that this will be an unsettling time for those c.300 colleagues who are potentially affected by these proposals, and they will be fully supported and consulted with throughout the process,” stated the company.
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