Premier Foods to boost marketing spend to £36m after seeing success in Mr Kipling and Oxo

Premier Foods is set to up its marketing spend from £25m to £36m across its entire portfolio of brands after seeing success for hero brands, which benefited from healthy marketing investment.

The food conglomerate has been working on restructuring the business and has put in place an investment-led growth strategy that is starting to deliver results.

Mr. Kipling, Cadbury cakes, Oxo and Bisto, delivered gains in volume, value, market share and household penetration in 2015 according to Kantar Worldpanel, and Premier Foods is hoping to replicate that success across other brand, which include Angel Delight and Sharwood’s.

The company announced the news today (23 March) which also revealed Premier Foods had rejected an unsolicited offer spice and herb company McCormick & Company to acquire company, on the basis that the offer “fails to recognise the value of Premier's performance to date and prospects for the future”.

However, Premier Foods has entered a cooperative agreement with instant noodle company Nissin Foods, which will provide the food business with access to Nissin’s products in the UK and allow Premier Foods to benefit from Nissin’s international scale to accelerate sales over seas.

Premier Foods has additionally identified a number of new strategic initiatives to help accelerate growth across its three business units of Grocery, Sweet Treats and International. This includes a plan to build on the successful trial of its Cake-To-Go range of Mr. Kipling twin pack slices and Cadbury mini roll twin pack by accelerating growth of its brands in broader convenience channels.

In grocery, Premier Foods said it intends to extend its brands into premium areas within the chilled grocery sector in the sweet and savoury segments, including product ranges to meet consumers' growing health-consciousness.

In international the business will focus on accelerating the expansion of its cake brands in the US and other geographies.

The company said that while the initiatives will incur an initial cost of £2-4m in the full year 2016/17 it is now raising its sales growth guidance from 1-2 per cent to 2-4 per cent.