Premier Foods has announced strong growth for Hovis’ branded bakery, and plans to push for increased sales of white bread.
In the firm’s preliminary results for the year ended 31 December 2009, it announced that branded bakery sales for Hovis grew by 13.5% to £370m, though it explained that the increase in volume sales was partly offset by pricing - with the proportion of bread sold on promotion higher than in 2008.
Retailer brand bakery fell by 15.6% to £179m, however Premier noted that the loss in non branded sales was “more than offset” by increased volumes of branded bread.
Hovis grew its market share of the branded bread market to 26.6% by value and 25.8% by volume in 2009, which Premier put down, in part, to the firm’s ability to develop advertising which emotionally connects with the consumer.
Commenting on opportunities for the future, Premier said growth was still available from “expanding in segments of the market in which Hovis is underrepresented, such as white bread”.
Total bakery sales in the Hovis division were up 2% to £549m. Milling sales fell by 16.8% to £193m, as raw material costs had a significant effect, according to the firm. This resulted in a fall in total sales for Hovis of 3.6% to £742m.
However trading profit for the division was up 75% from £24m in 2008 to £42m in 2009.
Premier announced that branded sales had increased across the board, and as part of its strategy for further growth it said it will “concentrate our investment into areas with the greatest growth potential”. It has therefore placed its brands into Drive, Core and Defend areas of focus.
Within the Drive category - the areas it believes it can grow ahead of the market - are its bread and cake businesses, including the Hovis and Mr Kipling brands. It classifies its Cadbury Cakes business as a core brand within its Drive category.