Consumer demand for little treats has boosted sales at Mr Kipling owner Premier Foods.
The manufacturer’s Sweet Treats division – which includes Mr Kipling, Cadbury Cakes, and own label – saw sales rise 2.2% to £124.6m for the 26 weeks ended 28 September 2024.
This was driven by branded revenue, which increased 6.1% to £105.7m, while non-branded revenue fell 15.1% to £18.9m. Premier Foods attributed the decline to a combination of contract exits in fancies and consumers switching to brands.
Overall, the division delivered a contribution of £11.7m in half year, slightly down on the £12.1m delivered in the prior period. Margins were slightly lower due to elevated cocoa prices, it added.
Premier Foods sought to support its brands’ growth with sharper promotional points across both the Mr Kipling and Cadbury cake ranges. Brand investment for the former continued through the period with the ‘Piano’ TV advert, while new product launches included Signature Collection Chocolate & Caramel Layer Cakes, indulgent loaf cakes and Strawberries & Cream Fancies. Signature Bites also continued to perform strongly, with revenue more than doubling.
Mr Kipling is also performing well overseas. It delivered strong growth in Canada thanks to increased distribution, which means it is now available in over 1,000 stores across two major retailers. In the US, momentum is focused on driving rate of sale on current distribution for the brand. In Australia, Mr Kipling will benefit from new product launches in the second half, Premier Foods noted.
CEO Alex Whitehouse said Premier Foods has delivered “another really strong branded performance” underpinned by double-digit volume growth.
Headline revenue (which includes the recently closed Charnwood and Knighton manufacturing sites) for the group increased 4.6% to £498.7m, with brands accounting for £444.7m of this. Non-branded revenue, meanwhile, fell 10.4% due to low-margin contract exits as well as consumers switching from own label products to branded ones.
“This demonstrates the success of our proven branded growth model which was also supported by sharper promotional pricing. We gained both volume and value market share, outperforming the market as many consumers switched into our leading brands from own label,” Whitehouse said.
“As inflation has begun to ease and shoppers are starting to feel more confident, we’ve seen consumers treat themselves more, helping sales of both Mr Kipling Signature Bites and Ambrosia Deluxe more than double in the first half of the year.”
Whitehouse added that there are exciting plans in place across all of Premier Foods’ brands in the second half, with Mr Kipling Signature mince pies benefitting from expanded distribution. The business is also expecting to see revenue growth from its “UK branded core, extending into new categories, overseas expansion and M&A activity”.
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