Modern Marketing

Premier Foods to double marketing budget as profits rise to £48m


By Natalie Mortimer | N/A

July 22, 2014 | 3 min read

Premier Foods is planning to increase its investment in consumer marketing for brands such as Bisto and Mr Kipling after reporting a 2.1 per cent profits rise in the six months to 30 June.

The food producer posted an underlying business trading profit of £48.1m, despite seeing its sales fall by 6.1 per cent owing to “challenging marketing conditions”.

Over the next six months Premier Foods plans to ramp up its marketing and innovation efforts, doubling its first half marketing budget to communicate new productions, including a “major” re-launch of the Mr Kipling and Homepride brands.

This will include a new packaging design for Mr Kipling, to incorporate “significant impact” for seasonal lines, a major TV ad campaign with prime time media slots and associated outdoor and social media support.

There will also be a full TV ad campaign for Homepride to support its recent packaging redesign and new flavour formulations and signals the first major campaign for the brand in 10 years.

Chief executive Gavin Darby said: "We are adapting quickly to the changing external environment through retaining a tight control of costs and margins and have a strong programme of consumer marketing and new product introductions planned for the second half of the year. Assuming normal weather patterns, we expect an improved second half branded sales performance and our Trading profit expectations for the year remain unchanged.

"Following an update of our category plans, we remain convinced of the medium and long-term potential for our brands to deliver profitable growth. We plan to continue investing in innovation, marketing, our supply chain capabilities and our people to create long-term shareholder value."

Premier Foods added that while its Lloyd Grossman sauce range continued a good performance, Sharwood's sales were lower due to competitive pressures in the category.

Support brands Cadbury and Lyons cakes were down due to lower promotional sales and Bird's custard and McDougall's also underperformed.

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