Premium crisp maker Kettle Foods recorded a 31% jump in pre-tax profit in its past financial year, despite the supermarket price war.
Newly filed accounts at Companies House reveal Kettle Foods’ pre-tax profit leapt from £9.2m to £12.1m, with turnover rising from £81.3m to £84m in the year to 31 July 2014.
Kettle increased profit despite a highly competitive environment that the company said had driven retailers to promote more heavily and more often, and continued pressure on the cost of raw materials.
According to BrandView data, there were 951 promotions on Kettle products in the top five and Ocado during Kettle’s financial year, offering a 30% price cut on average across the promoted lines.
The company, which is owned by US-listed Diamond Foods, said it had opted to maintain a high level of promotional activity given the intense competition in snacks and crisps .
This strategy had helped increase Kettle Foods’ market share to 4.5% by volume, up from 3.9%, it added.
Kettle Foods MD Dominic Lowe said the company had to reflect the rest of the snacks market, where about 50% of volume was now sold on offer. “The secret for us is balancing price competitiveness with our premium positioning,” he said.
The snacks market had continued to be exceptionally competitive since the end of the year with increasingly aggressive headline promotions and a constant stream of NPD, including Walkers Market Deli. “Kettle Foods are working hard to maintain our premium value whilst remaining sufficiently competitive and continue to perform well in a tough sector.”
Recent data from Nielsen shows Kettle’s sector share has grown by 2.6% over the 12 weeks to 28 March 2015, and by 6.7% in impulse, driven by both singles and sharing pack formats.
“We are particularly pleased with our new healthier baked range, as well as the ongoing strength of our core hand-cooked Kettle Chips offering,” Lowe added.