Revenues at Premier Foods were almost flat in the first quarter as a leap in sweet treats covered for a slump in grocery sales.
The groceries division faced a tough quarter, as gravy, stock and soup were hit by warmer weather, with sales falling 2.7% to £174.7m, according to a trading update for the 13 weeks to 28 June.
Sweet treats proved more popular as Mr Kipling brownie bites and birthday cake tarts – a trend Premier brought to Britain from the US – performed “very strongly” to boost sales in the division by 9.1% to £65.3m.
Group revenues increased just 0.3% to £240m. However, the company’s brand-led strategy resulted in a 1.2% rise in branded sales overall in the quarter.
Despite the impact of the heatwave on some Premier’s grocery categories, the group still managed to improve volume and value market share.
CEO Alex Whitehouse said the continued growth in branded sales was driven by the strength of Premier’s innovation programme.
“We expect branded revenue growth to build through the year, as we launch further new products, such as Fuel10K yoghurt and granola pots,” he added.
“Our trading profit expectations for the full year are unchanged, underpinned by our proven branded growth model and ongoing cost efficiency programmes.”
In the second half of the year, Premier will accelerate its new product development, launching a Mexican cuisine range for The Spice Tailor and new high-protein yoghurt and granola pots from Fuel10K, alongside new peri-peri gravy from Bisto.
Premier said it expected branded revenue growth to build throughout the year, as comparatives ease and the new products hit market. Profit expectations for the year also remained unchanged.
Marketing appointment
The firm also announced the appointment of Catherine Lloyd to its executive leadership team as chief marketing officer.
Joining Premier from health and hygiene consumer brand Reckitt Benckiser, where she worked for 17 years, Lloyd will help propel Premier’s brand-first strategy.
“This is an incredible role, looking after some of the biggest and most successful food brands in the UK,” Lloyd said.
“I’m really looking forward to meeting the full team and to building on the work they have been doing over the past six years to take our portfolio of brands to the next stage of growth, both in the UK and internationally.”
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