Consumers trading up to branded sweet treats like Mr Kipling Signature Bites helped Premier Foods deliver strong volume growth in its latest financial year.
Branded revenue for the Sweet Treats division of the St Albans-based manufacturer – which also includes Cadbury cake – increased by 7.3% in the 52 weeks to 29 March 2025, up from £217.7m in FY24 to reach £233.8m.
The division’s growth was partially offset by a 6.3% decline in non-branded sales (down to £65m), meaning headline revenue for Sweet Treats ended only 4% up overall at £298.8m. Divisional contribution increased to £35.4m, up a solid 5% from the £33.7 the year prior.
Premier Foods noted that branded volume increases during FY25 reflected strong execution of its branded growth model, alongside sharper promotional price points across both Mr Kipling and Cadbury cake. It highlighted Mr Kipling’s premium Signature ranges as having performed very well, with Brownie Bites growing by 78%, ‘best ever’ mince pies doubling revenue through expanded distribution, and indulgent Chocolate & Caramel Layer Cakes launched to market.
“Our premiumisation strategy continues to be highly relevant, reflecting the trend for consumers to trade up and treat themselves,” commented Premier Foods CEO Alex Whitehouse.
In the second half of the year, Mr Kipling also introduced new tarts in Birthday Cake and Strawberry & Cream varieties, which it said had a very strong start alongside its new Strawberry & Cream Fancies. Brand investment for Mr Kipling increased in the year too, with further television advertising featuring its ‘Piano’ advert, in addition to upweighted out-of-home media focused on communicating the premium Signature range.
Cadbury cake was also said to have grown volumes and revenue consistently during FY25 – Caramel Mini Rolls were brought back in the second half to support strong performance across the core range. Premier Foods has extended the licence it holds with Mondelēz Europe GmbH to manufacture and sell Cadbury cake and ambient desserts through to 2028.
The company revealed that non-branded revenue declines in sweet treats were due to contract exits of French Fancies in the first half of the year and Swiss Rolls in the second half, with consumers switching to its brands.
Revenue gains were also reported across other grocery brands in Premier Foods’ portfolio, especially from Ambrosia’s Deluxe range as well as from the more recent acquisitions of Fuel10k and The Spice Tailor. These helped boost overall branded sales to £1,008m in FY25, having been at £958.1m the year before.
This helped the headline revenue of the group increase by 3.5% (constant currency) to £1.15bn, the second straight year it surpassed the billion-pound mark following a £975.6m turnover back in FY23.
“We have now reduced our leverage to below 1x adjusted EBITDA4, reflecting the strong cash generating capacity of our business and the suspension of pension deficit contribution payments,” said Whitehouse, noting a 62% increase in dividends.
“As we look ahead to the coming year, we expect revenue growth to be supported by a strong product innovation programme and our expectations for trading profit growth are unchanged. In line with our capital allocation framework, we will continue to invest in projects to both increase efficiencies and automation and facilitate growth through product innovation and capacity while we also remain focused on pursuing M&A opportunities where we can add value to brands through the application of our branded growth model,” added the CEO.
No comments yet