Flora Food Group sales and profits slump in promotion push

Profits at Flora Food Group have declined in the UK as the former Unilever spreads business invested in lower prices and a major marketing campaign for Flora to highlight its dairy-free credentials.

Revenues at the UK arm of the Netherlands-headquartered group, which also owns Bertolli and Violife, fell 8.2% to £222.7m in the year to 31 December 2024 as a result of the increased promotions and reduced prices, as well as a dip in volumes, according to newly filed accounts.

Formerly known as Upfield, the dairy-free spreads and cream cheese maker managed to protect its gross profit margins last year, which remained steady at 12.8% thanks to falling commodity prices and other cost savings. But operating profits slumped 37% to £7.4m on the back of the slowdown in the top line.

Flora Food also blamed the hit to profits on investment in promotions and advertising, which it vowed would continue in 2025 as it rolled out the ‘Skip The Cow 2.0’ campaign for the Flora brand, fronted by Gordon Ramsay.

The group said, in the Companies House accounts, that the celebrity chef was “one of the most trusted names in the culinary world”. Ramsay joined forces with Flora in January this year as global brand ambassador. The campaign aims to show consumers that its dairy-free spread can compete with the real thing in all areas of the kitchen while also being better for the planet.

Flora Food added in the accounts the partnership proved “our brands deliver unbeatable performance in cooking and baking and furthermore, raising awareness of the impact that intensive dairy farming has on the environment and present Flora Plant as a solution to help lower your carbon footprint in a fun, disruptive way that would generate strong branded coverage”.

The latest UK results come in the wake of a challenging period for the Flora brand, as sales tumbled amid general volatility in the butter and spreads category, according to data for The Grocer’s 2024 top Products survey [NIQ, 52 w/e 7 September 2024]. Supermarket sales tumbled by £16.9m at Flora on a 10% slide in volumes, accompanied by falls in value of 15.2%, 6.1% and 10.6% in Bertolli, I Can’t Believe It’s Not Butter and Stork (all owned by Flora Food) respectively, as the overall butters and spreads category lost £63.7m in value.

Flora’s Pro Activ brand, however, managed to buck wider trends, with growth of 8.7% – reflecting wider industry trends towards healthier products.

Results at Flora’s Dutch parent group also registed a fall in revenues, from €3.3bn in 2023 to €3.1bn, earlier this year, dropping the group’s four-year compund annual growth rate (CAGR) from 4% to 2.5%. 

Flora Food has been owned by private equity giant KR since 2018 following a £6bn deal with former owner Unilever.

Flora has invested more than €1.6bn in separating and transforming its business since the takeover, and, in 2024, completed the integration of Violife parent Arivia within the company following its 2020 acquisition.

“The growth in our spreads business, alongside momentum in newer categories, reflects our progress in delivering the next generation of food that is more affordable and sustainable,” said group CEO David Haines in the annual report release earlier this year. 

“Looking ahead, the opportunities are vast, and with our agility and executional excellence, we are well-positioned for continued success.”

Flora manufactures over 90% of its products in-house from 15 manufacturing sites around the world, including its recently acquired 100-person cream and cream cheese factory in Kansas. It employs 3,700 staff worldwide.

Flora Food Group declined to comment on the UK results.