7. Spice Tailor 2

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Premier Foods has acquired Indian meal kits brand The Spice Tailor for £44m as the Sharwood’s and Loyd Grossman owner looks to capitalise on growing demand for scratch cooking.

It is Premier’s first deal since December 2006 when it merged with RHM to bring Mr Kipling, Bisto and Hovis into the group.

The Spice Tailor is a rapidly growing premium brand, registering in excess of 20% CAGR over the past four years and forecast to expand sales and profits further in the coming years.

Revenues in the current 2022/23 financial year are expected to clear £17m and the business will boost Premier’s earnings in year one.

Premier said the Indian and South East Asian brand was “highly complementary” to its Sharwood’s and Loyd Grossman sauces, typically attracting different consumers.

Once integrated into the group’s cooking sauces and accompaniments category team, The Spice Tailor would benefit from increased levels of marketing investment to drive product awareness and household penetration, additional NPD resources and access to Premier’s commercial capabilities and strong retailer relationships, it added.

CEO Alex Whitehouse said Premier had “greatly admired” The Spice Tailor business for some time.

“The acquisition is well aligned to our growth strategy and we see a clear opportunity to build on the excellent track record of The Spice Tailor, by leveraging the elements of our proven branded growth model,” he added.

“This acquisition represents a highly complementary geographical fit, and we see significant potential to expand The Spice Tailor’s distribution in all our target markets. We see this as another important milestone for us following the Group’s strong performance over recent years and The Spice Tailor is an important addition to accelerate our future growth plans.”

The Spice Tailor also has a presence in the Australian, Canadian and Irish markets.

Premier paid £43.8m on a cash-free, debt-free basis, with potential for an additional consideration dependent on how the Spice Tailor performs over the next three years, up to a maximum of £72.5m.

Spice Tailor founder Adarsh and Anjum Sethia said: “We’re very pleased that The Spice Tailor will become part of Premier Foods and are looking forward to unlocking further growth for the brand which we have nurtured since its inception. We see Premier with their track record of brand investment and strong commercial relationships, as the perfect fit for The Spice Tailor, driving it onto the next stage of its evolution.”

The markets greeted the news warmly this morning, with Premier shares jumping 2.5% to 115.8p.

Morning update

Aldi announced this morning that it is giving a second pay increase of the year to all its store workers.

It means all store staff will be paid a minimum of £10.50 an hour (£11.95 in London) from September.

The move - affecting about 26,000 staff - takes the investment in pay this year by Aldi to £43m.

CEO Giles Hurley said: “Our new rates of pay maintain Aldi’s position as the UK’s highest paying supermarket.

“This announcement recognises the amazing contribution our colleagues make in serving local communities across the country. Their outstanding efforts have ensured that our customers continue to have access to fresh affordable food, every single day.”

Naked Wines has revealed ahead of an AGM later today that CFO Shawn Tabak departed his position by “mutual agreement”.

The embattled DTC operator appointed UK managing director James Crawford to the role on an interim basis to run until June 2023.

Crawford previously served as the group’s CFO for more than five years to the end of 2020.

CEO Nick Devlin thanked Tabak for his efforts.

“Shawn’s experience in leading finance organisations in high-growth US environments has been valuable,” he said.

“During his time at the company we have achieved significant growth, which we have consolidated in our most recently completed fiscal year.

“I’m delighted to be able to call on James, a highly accomplished executive with unmatched knowledge of the business and value creation model to return to the CFO role on an interim basis.

“I would like to thank Shawn and James for having worked closely together to effect a smooth transition.”

The FTSE 100 started the week on the back foot, falling 0.3% to 7,253.99pts as markets opened.

Early fallers included Deliveroo, down 2.9% to 94.2p, Haleon, down 2.3% to 309.2p, DS Smith, down 1.9% to 265p, and Naked Wines, down 1.4% to 162.6p.

Risers so far, aside from Premier Foods, are Bakkavor Group, up 2.4% to 85.8p, PayPoint, up 1.9% to 604.1p, and Glanbia, up 1.8% to €11.42.

This week in the City

There is plenty going on this week as a host of big consumer groups update the City.

Things get underway tomorrow with the latest monthly grocery sales figures from Nielsen, while, on the markets, Unilever releases interims and Greencore and Compass Group provide trading updates, and, in the US, Coca-Cola, Mondelez and McDonald’s reveal quarterly numbers.

British American Tobacco, Reckitt Benckiser, Vimto maker Nichols and packaging group Smurfit Kappa all publish first-half results on Wednesday, with quarterly updates from Danone in Europe and Kraft Heinz in the US. Wednesday also sees the latest monthly shop prices index from BRC-NielsenIQ

On Thursday, Diageo will give some insight into how well its big-name booze brands are holding up in the face of depressed consumer confidence as it unveils annual results. Nestlé and AB InBev also puts out their latest quarterly figures, while Virgin Wines updates the market and B&M and Tate & Lyle hold AGMs. Over in the US, tech behemoth Amazon releases quarterly results on Thursday evening.

Procter & Gamble is the final global CPG group to update markets on Friday with its quarterly results.