Hovis Premier Foods

Premier Foods marketing spend drops by over £6m during first half of 2013


By Stephen Lepitak, -

July 23, 2013 | 3 min read

Premier Foods has revealed that it spent over £6m less during the first half of this year on marketing than it did during the same period in 2012, having also revealed a growth in underlying business trading profit of 50 per cent to £47.4m

The company, which owns brands such as Hovis and Mr Kipling, revealed that during the first six months of the year it spent £17.1m in comparison with the £23.5m that it spent on marketing during the same period in 2012.

As a result of its decision to 'restructure' its bread business, Hovis received 'more selected levels' of brand investment, with campaigns planned for Cadbury cake and Mr Kipling expected later in the year.

It was also claimed that media spend efficiency had been improved by 40 per cent during the first six months of the year.

The company explained that 'trade spend and promotional activity' depended on market conditions alongside customer negotiations, as well as connected to the company's profit or loss estimates.

Gavin Darby, CEO of Premier Foods described in trading profit increase as "very encouraging".

He added: "This shows that our turnaround strategy is delivering at the bottom line. We have now grown sales in our Grocery Power Brands for six consecutive quarters as we continue to build partnerships with our customers, deepen our understanding of consumers and invest more effectively in supporting our brands.

"We have already completed the actions to deliver the promised £20m of overhead cost savings for 2013 and continue to keep a tight control over costs. The restructuring of our bread and milling business is ahead of plan and we are taking the decisions necessary to create a more sustainable platform for this business.

"The second half will see further plans to grow our Power Brands, in addition to a new £10m of cost savings that we have now identified from our efforts to reduce complexity. As a result, we now expect Full Year Trading Profit to be around the top of market expectations.

"Looking further forward, we will continue to drive profitable top-line growth by focusing on growing our categories supported by ongoing cost savings from reducing complexity. At the right time, we will address our capital structure - from a position of growing strength given the delivery of our turnaround plan and the performance of our Power Brands. I am excited by the potential offered by Premier Foods in the longer term."

Premier Foods ran advertising campaigns for Batchelor's, the brand's first in five years, Bisto Stock Melt and Ambrosia Devon Dream during the first half of the year, investing in TV advertising for six of its seven Grocery Power brands.

A similar level of spend is expected during the second half of the year.

Hovis Premier Foods

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