Premier Foods is renewing its focus on innovation and has gained market share in grocery, bread and chilled products, said Robert Schofield, the chief executive, as the group reported a first-half loss of £35.9m.

“Own-label is not winning in the food market,” Mr Schofield said, adding Premier’s brands had gained 1.6 per cent of share overall in the year to early June while retailers’ own-label brands had fallen by 0.7 per cent. “We’re back to investing in our brands.”

Hovis bread had a market share of 26.3 per cent in the 12 weeks ending in early July compared with 22.7 per cent a year earlier, its highest level in two years.

Mr Schofield built Premier by reviving brands such as Ambrosia custard. But investment in brands slowed last year as the group struggled with £1.8bn of debt taken on after its 2007 purchase of RHM. An equity issue this year cut debt to about £1.4bn.

About half of the £18m in synergies Premier achieved in the first half of the year by closing factories and integrating manufacturing operations has been invested back into its brands. The company has also introduced more than 12 new products or line extensions since the start of the year, including Branston mayonnaise and Sharwood’s biryani sauces.

Its weakest brand is its Cauldron organic tofu and meat-free brand, which declined along with a 20-30 per cent fall in overall organic food sales.

Premier reported a loss due to pension financing and foreign exchange charges. Excluding these charges, trading profits rose 5.6 per cent to £123.6m.

Total sales rose 3.5 per cent to £1.2bn, mostly due to price increases. Premier has raised prices 5-6 per cent this year and warned it would need to take further increases. The basic loss per share widened from 0.2p last time to 1.3p. There is no interim dividend. The shares closed almost unchanged at 40.5p


Branston argues its new mayonnaise range is ‘logical extension’

As well as making sweet chilli microwaveable noodles under its Sharwood’s brand and mini savoury eggs under its Quorn brand, Premier Foods has this year moved into a new category under the Branston’s name: mayonnaise.

Best-known for its pickles and relishes, Branston has moved into ketchup, brown sauce and baked beans. This year it has turned its attention to mayonnaise, launching “Mayo with a Twist” in Lime & Chilli, Lemon & Roast Garlic, Sweet Chilli and Mustard & Onion flavours.

Sue Knight, director of savoury brands at Premier Foods, argues that mayonnaise is a logical extension for Branston because it can be spread on sandwiches. “It’s a natural next step,” she said, adding that Branston has taken a share of almost 6 per cent of the overall mayonnaise category (which has been showing modest sales volume growth) since March.

Premier is following the lead of Heinz – the UK market leader in ketchup – which also recently started selling mayonnaise, although the market remains dominated by Unilever’s Hellmann’s brand.

Julian Hardwick, food analyst at RBS, says it makes sense for Branston’s to be in mayonnaise. “You can put it on more things than ketchup,” he said.

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