Premier Foods to continue increased marketing spend on Power Brands for 2012 as profits rise
Having increased its marketing investment by around 40 per cent with a focus on its Power Brands, Premier Foods has reported a growth in profits of 1.1 per cent for the first half of 2012.
Having begun to implement its strategy of focusing on its power brands such as Ambrosia, Batchelors, Bisto, Hovis, Loyd Grossman, Mr. Kipling, Oxo and Sharwood's, and dispose of its other non-core brands, the group has seen an increase on Power Brand sales of two per cent and of Grocery Power Brand sales of 4.9 per cent, it has revealed.
Sales, excluding milling for the first six months of 2012 were £757.1m, while its pre-tax trading profit increase by 3.2 per cent to £53.2m.
Premier Foods spent £24.8m on consumer marketing in the first half of 2012, an increase of 40.9 per cent on the same period’s spend in 2011, with TV advertising campaigns for each of the Power Brands being produced.
Marketing investment for the second half of 2012 is also expected to be higher than last year, although an element of the planned investment may be used for promotional activity, as a result of the ‘current competitive environment’ and in order to maximise ROI.
The company has also said that its cost reduction programme to produce savings of £40m was also ahead of next year’s plan.
Michael Clarke, CEO of Premier Foods, said: "I'm pleased with the progress we are making to stabilise the business, re-focus the portfolio and invest in our future growth. Our strategy of focusing on our Power Brands is starting to gain traction. Power Brand sales were up 2% and sales of Grocery Power Brands increased by a healthy 4.9%, reflecting consistent improvement in market shares. Trading profit increased 3.2%, in line with our expectations."