Premier Foods will be doubling its marketing spend on its eight Power Brands in order to drive recovery and growth for the next financial year.
The company also announced in a statement this morning that, in order to achieve its cost reduction target of a £40m saving by 2013, it will be cutting 600 jobs – 5% of its 12,000 employees. A company spokesperson was unable to confirm in which areas of the business job losses would occur, but said it was likely to be announced later in the year.
As part of its future growth plan and 2011 trading review, the firm announced this morning (17 January) that it will be looking invest in its core brands, with plans for TV advertising for six of the Power Brands in the first quarter, including Mr Kipling and Hovis.
The Mr Kipling range has recently undergone a revamp, with ‘refreshed’ packaging and a new TV advertising campaign due to start in February. The company has also invested in its Hovis bread, with new packaging featuring a Union Jack flag and an eye-catching blue band, in addition to a £1m spend on a TV ad campaign.
Michael Clarke, chief executive officer for Premier Foods, said: “We continue to deliver on our plans to stabilise the business and invest in our recovery and future growth. While decisions to reduce the workforce are always difficult, I’m convinced we are taking the right steps in the long-term interests of the business, employees and our stakeholders.”
The group also confirmed that its key Christmas trading period was in line with its expectations, with management expecting its overall financial results to be at the lower end of current market expectations. Discussions with the company’s banks over a refinancing package continue to make progress and it is anticipated that an appropriate agreement will be reached soon.
The company has also extended its cake brand with a new selection of British ‘Sweetshop Specials’ in the range. The new cakes aim to build on Mr Kipling’s Inspirations, featuring Fruit Salad Mini Batts and a Pineapple Slice, available in the new snap pack format.