Premier Foods Q3: Cadbury and Mr Kipling sales decline

Premier Foods’ Mr Kipling and Cadbury cake sales have fallen in the past three months – although the business has reported strong growth in its own-label cake business.

Sales of the company’s branded cakes portfolio were down 7.3% year on year in the 13 weeks ended 30 December, the company announced today (16 January).

Cadbury cake sales had been impacted by short-term capacity issues, said Premier, alongside a change in promotional activity compared to a year ago.

The decline follows a raft of Cadbury NPD, including Cadbury Roses cake bars, and the business is currently rolling out new Cadbury Heroes cupcakes – the first time it has used the Heroes brand (se below).

A drop in Mr Kipling sales also followed a move to “more optimal promotional activity”, added the company, which recently extended the brand with the launch of lower-sugar cake slices.

Overall sales from Premier’s Sweet Treats division rose 2.2% year on year, despite the decline in branded sales, and were bolstered by a 19.6% surge in non-branded sales.

Growth in the firm’s own-label business included increased volumes of mince pies compared to last year, with Premier selling a record 220 million mince pies in 2017, four million more than the previous year. The company also secured new business in seasonal lines and growth in the discounter sector.

The performance of Sweet Treats reflected that of the overall Premier Foods business, with non-branded sales out-performing the company’s brands. While total sales grew 4% to £261.4m, branded sales were only 0.7% higher and non-branded sales were up 17%.

Premier’s international sales grew 26% in the quarter, with continued progress in Australia, the launch of Mr Kipling and Cadbury cake in New Zealand and new listings for Sharwood’s in Europe and the US.

The company said the first stage of a planned three-phase move to centralised warehousing and distribution had now been completed “despite some initial implementation challenges”. The next two phases of the group’s transformation programme are on track to be completed during the coming financial year.

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