Mr Kipling owner Premier Foods has signed an agreement to renew its licence with Mondelēz International to produce and sell Cadbury cakes.

Cadbury-branded cakes are a major part of the Premier portfolio and account for more than 8% of the £1bn ambient cake market in the UK. The sales value of the Cadbury cakes range has grown 19.5% in the past two years (IRI grocery outlets, 52 w/e 22 April 2017).

Premier today (8 May) announced it has signed a ‘Heads of Terms’ that outlines the licensing deal, which is then expected to be finalised in definitive agreements with Mondelēz in the coming weeks. Once finalised, the licence will run until 2022, with an option for Premier to extend this to 2025, subject to meeting performance criteria.

In addition to the UK, Premier has launched Cadbury cakes in Australia and the UAE. The company said the renewed deal would enable it to extend into potential new markets, including South Africa, Canada, Japan, China, India, Asia-Pacific, Caribbean and additional countries in the Middle East.

Premier said it was developing plans to launch Cadbury cake in two new “significant” markets in 2017/18. 

The licence will also give Premier the opportunity, subject to approval, to use the full range of Cadbury brands including Flake, Crunchie, Caramel, Marvellous Creations and the Oreo brand.

“I’m delighted we’re entering into a new long-term global partnership with Mondelēz International, which will unlock exciting new growth opportunities for both partners,” said Premier chief executive Gavin Darby. “This will give us a great platform to invest in developing the Cadbury cake brand in the UK and around the world and represents a major boost to our fast-growing International business.

“The new global partnership is good news for our colleagues and good news for British exports.”

Mondelēz International Northern Europe president Glenn Caton said he was proud of the long-term partnership with Premier Foods.

“We look forward to continuing to work together to nurture and develop our well-loved portfolio of brands and products,” he added. “The future is bright for Cadbury cakes.”

Burton’s Biscuit Co last year sold its licence to produce Cadbury-branded biscuits to Mondelēz International, although it continues to produce some of these under a co-manufacturing agreement.

Mondelēz recently unveiled the Cadbury Roundie, its first Cadbury biscuit launch since it bought the licence.

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