Premier Foods credits a combination of new product development, overseas strength and marketing investment for driving sales up 6% during the first quarter of 2022.
The business, which owns brands including Mr Kipling, Sharwood’s and Oxo, achieved total sales of £197m, compared with £185.9m over the same period last year. Sales of branded products rose 4.2% to £169.6m, while non-branded sales surged 18.8% to £27.4m.
Within the sweet treats division sales increased by 5.1% to £55.4m during the first quarter, while sales of grocery products were up 6.3% to £141.6m. The sales surge helped Premier Foods grow market share over the quarter both in-store and online.
Within grocery, Batchelors and Nissin were standout performers, offering “good value meal solutions” the business claims are proving increasingly popular as household budgets are stretched. Indeed, CEO Alex Whitehouse expressed confidence Premier Foods’ brands will perform amid during the cost of living crisis.
“Consumers are increasingly looking to cook tasty, affordable meals at home; this fits well with our broad portfolio of brands and was illustrated by the strong performance of Batchelors and Nissin in the quarter,” he said.
When it comes to dealing with the pressures of inflation internally, the company claims to have made good progress through a range of measures, including “cost efficiency and pricing action”.
All Premier Foods’ grocery brands benefitted from price recovery in the quarter, although the business noted “volumes were slightly lower, in part due to tougher comparatives reflecting pandemic restrictions in the prior year”.
Non-branded growth of 17.1% in the grocery division was attributed to a “strong recovery” in out of home sales compared to the prior year and a “pricing benefit” versus branded product categories.
Within the sweet treats segment, Cadbury cakes experienced a strong quarter and “demonstrated resilient volumes”, while sales of Mr Kipling were higher despite timing changes to promotional activity.
Whitehouse highlighted the “benefit” to the Mr Kipling brand of its TV advertising campaign launched during the quarter. In addition, a healthier range of non-HFSS Mr Kipling cakes have been “very well received” by consumers, while the CEO also called out the launch of new cooking sauces under the Sharwood’s brand.
International sales were strong, with sales up 12% on the same period last year. Mr Kipling recorded its highest ever market share in Australia, while in Canada and Europe Sharwood’s benefitted from increased distribution with major national retailers. In Ireland, sales of Nissin noodles “delivered strong growth”, in line with the brand’s UK success.
Rather than pulling back on marketing investment, Premier Foods plans to continue applying its branded growth model, which the business sees as a combination of marketing investment, high household penetration, insight driven NPD and retailer partnerships. Speaking in May, Whitehouse confirmed Premier Foods will pursue a “game plan” of increasing marketing investment over the next year.
The group’s expectations for the full year remain unchanged, as the business doubles down on its five pillar growth strategy.