Jon Goldstone, you terrible tease! A long, involved chat with the brand boss, sat in Hovis HQ in Windsor arranged to find out the secrets behind the bread’s recent runaway success gave no hint of the epoch-shifting announcement he would make a week later (a day after BB went to press): from January 2010, Hovis would be using 100% British wheat across its entire range.
We caught up with Goldstone on his hands-free kit. "You kept that one quiet!" we exclaimed. "We were going to launch it in December, but we thought now would be a good time" he explains, hinting at an intriguing PR cat-and-mouse game, played out behind the scenes. Hovis was gearing up to announce the news next month, but caught wind that rival Warburtons was about to launch two all-British loaves using UK wheat. The Bolton baker played its card and Hovis’ PRs sprung into action to deftly grab the headlines by announcing its full-range UK wheat switch.
"I’m glad it’s hit the headlines, because it is a big commitment for us to make. Every single product that has the name Hovis on it will be using 100% British wheat," he says, when asked about stealing Warburtons’ thunder. "I think it is one of the most exciting and powerful things that we could have done as a brand."
Undoubtedly. Plant bakers have always blended lower-protein UK wheat with Canadian wheat wheat that could not previously be grown in our dismal climate. But, for five years, Hovis has been trialling a red wheat to match Canadian wheat quality in the UK. This equates to £18m of wheat that will now be bought from the 600 farmers already signed up. What’s more, there will be no change to the price of Hovis, despite the higher costs involved. How is that possible?
"There is an on-cost," admits Goldstone. "We’ve made a commitment not to increase our retail prices next year."
The move marks the culmination of a great year and a return to form for a brand that was in dire straits a year ago. From mid-2006 to October 2008, Hovis was in a worrying decline; Premier Foods was in the process of buying RHM, including Hovis a period during which brand investment slipped. Quality fell and marketing tailed off. At the same time, Warburtons’ rise appeared unstoppable.
Hovis was relaunched in September 2008 with new recipes and packaging, updating its pack styling with a nod to its heritage and an award-winning TV and cinema ad campaign. "All of that, together with significant improvements in our relations with the grocery trade, drove a real step-up in volume," says Goldstone. The company has now restored its market share to 2006 levels, around 28%, with a volume growth of 16.4% year on year in a market that declined 2% (October 4, IRI).
The last trading update from Premier noted a shift away from building volumes towards building the brand. How will this manifest itself? "For us it’s about maintaining momentum," says Goldstone. "We had a horrible two-and-a-half years as a brand and, as a business, we’ve gone through a turnaround stage sorting out the basics getting our quality back, getting our communications back to the standard they should be, offering the right level of value for consumers. We’ve done the basics and we’ve benefited from that. The next phase for us will be sustaining responsible growth over the medium to long term through a blend of campaigns featuring our existing products and new launches." Not that it’s all been plain-sailing: Goldstone admits that Hovis has found sustaining volumes in the rolls category tough. And the Nimble brand has dipped, due to people switching to one standard family loaf, he says.
The retailers, of course, want to see volume return to the bread category rather than see the brands trading market share. The key battleground to achieving this will not be a brand bun fight, but weaning people off cereals by making them aware of the healthiness of bread, says Goldstone. "The really important thing is to shift the perception of the healthiness of bread," he says. "At the moment it is not perceived to be any healthier than rice, pasta or potatoes. A big part of our role as a brand is to convince people that bread not just Hovis is a healthier category than they might otherwise perceive."
He points to consumer research: "If you ask people whether they agree with the statement ’This category is healthy’, around 60% will agree that breakfast cereals are healthy. That compares to around a quarter for bread. There is a massive perception issue, but when you look at the nutritional facts of two slices of bread relative to a bowl of cereal, on a lot of the measures, particularly sugar and sat fat content, there is a really strong case for bread."
Hovis has undergone a series of format-based health messages, such as The Wholemeal Challenge, which encouraged consumers to eat wholemeal and feel healthier or get their money back. Best of Both was relaunched with the message that two slices had the equivalent calcium of a glass of milk. And the Seeds Sensations range has been promoted, latterly in conjunction with the Poppy Appeal. As a result, he says, "42% of con-sumers strongly agree with the statement that Hovis is ’healthier than others’, compared to 19% for Warburtons and 14% on Kingsmill. That gap has really opened up over the last year."
Even so, studies have shown health has dropped behind practicality and convenience as one of the three so-called macro-drivers. Is that significant? "Those things can be so broad-brush that they become meaningless," shrugs Goldstone. "Bread couldn’t be more practical or convenient and it’s good value. They’re such table stakes of the category that it’s a bit of a ’so what?’ Until the recession struck, you saw these big drivers of people looking for environmentally friendly, healthy and provenance. The recession blew over the top of that, so a lot of those trends felt like they went away. The reality is they are still there but morphing as you come out of a recession."
With Hovis closing in on Warburtons and buoyed by its UK wheat PR coup, are the eyes now on the prize of regaining the top spot? "They’re a tough competitor, a really good company with good products, and it would be completely wrong of us to say our ambition is to steal market share from them, because life doesn’t work out like that," says Goldstone, showing respect for a resilient foe. "We’re much more interested in playing our own game and doing the right thing for our own consumers. We know that if we offer great quality, value and some innovation, the brand will grow. That has to be a good thing for the thousands of people who work for us and for Premier Foods as a group."