Premier Foods is to extend its Cadbury range with Cadbury Choc Tarts following another strong performance from its cakes division.
Total sales in the company’s Sweet Treats division increased 4.1% in the first half of the year – although this wasn’t enough to offset weak sales in Premier’s grocery division, which resulted in overall half-year sales down 1.8%.
Cadbury Cake continued its “strong trajectory” from the prior year, reported Premier, adding that Amaze Bites had been a standout performer with annual retail sales of around £6m.
The company stated that the Double Choc and Chocolate Orange Amaze Bites had been the top two new cake products in the total category over the past year.
Premier also said it is to expand the branded range with Cadbury Choc Tarts, which are expected to launch early next year.
Mr Kipling sales were down year on year, however, which Premier said was primarily a result of lower promotional activity.
The company added that a range of premium cupcakes exclusive to one major customer had been performing well, and that the Cake on the go initiative was building distribution as a result of business wins in new channels, and in key travel locations.
Increased investment in in-store marketing and organisational capability for the Cake on the go operation had impacted divisional contribution, which was £0.8m lower than last year, at £6.6m.
Premier said 12.5% growth in non-branded sweet treat sales reflected new contract wins, including the company’s first premium mince pie contracts.
Cakes had also been a success in the international division, with Premier now the branded market leader in the Australian market.
A range of Cadbury cakes were recently launched into the United Arab Emirates, and Premier said distribution was expected to build to more than 200 stores during the third quarter of the year.
Premier added that initial indications suggested the Brexit referendum result was having “little if any impact” on consumer spending in the UK, and that the main impact would be the effects of sterling weakness over recent months.
It said its main exposure to foreign currency was through euros, of which it is a net purchaser of more than €50m per annum. It pointed out that all the group’s manufacturing and distribution sites were located in the UK and 89% of its expenditure was with UK-based suppliers.
“Following a good first quarter where we saw a number of our brands in growth, the second quarter was much weaker in our grocery business due to warmer weather which resulted in lower sales in the first half overall,” said Premier Foods CEO Gavin Darby.
“However, our sweet treats and international businesses continued to demonstrate their strong momentum.”
“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.”