Sweet Treats buck overall trend at Premier Foods

A sixth consecutive quarter of growth in its Sweet Treats division, at 6.4%, bucked the overall sales trend at Premier Foods, which reported a 5.4% fall in total group sales in its second quarter.

Sales for the group were £172.5m in the 13 weeks ended 1 October 2016, with H1 sales down by 1.8% and trading profit expected to be slightly lower.

According to the company, Cadbury Cake Amaze Bites continued to perform well in their first year and Cake on the Go Distribution is building. In addition, new contracts in non-branded cake have come from a broad customer base in both seasonal and all-year-round product ranges, it noted, with non-branded Sweet Treat sales up 12.9% in the quarter.

International business also performed well, with sales up 13% in the period and Cadbury Cake launched in the United Arab Emirates for the first time towards the end of the quarter.

However, the warm month of September had an adverse impact on some grocery categories, including desserts, which decreased by 9%.

Premier Foods CEO Gavin Darby said: “We are disappointed that our grocery business reported materially lower sales in the quarter due to warmer weather, particularly in September. However, our Sweet Treats and international businesses continued to demonstrate their strong momentum, delivering against our strategic priorities and growing over 6% and 13% respectively.

“We remain very confident in our strategic progress. Our customer relationships are strong and we have an extensive new product innovation programme planned for the balance of the year. We expect group sales to grow between 2-4% in the second half of the year and our profit expectations for the full year remain unchanged.”.

Premier said sales for the full year were now expected to rise by 1-2%.

Premier Foods has just launched new Christmas products through its Mr Kipling and Cadbury’s Cakes brands.

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