Birds Eye Unleashes Massive Ad Spend Surge: Unveiling Path to Unrivaled Volume and Share Growth

Nomad Foods, the company that owns Birds Eye in the UK, has announced plans to boost its advertising and promotions budget across all markets by approximately 70% in the second half of 2023. This move is aimed at increasing market share and comes as the frozen food company released its second-quarter results today (9 August). CEO Stefan Descheemaeker expressed his enthusiasm for the upcoming initiatives, which are intended to address the slight decline of 1% in both market share and volume experienced this quarter.

Descheemaeker announced that the planned expenditure will launch "within the week," aligning with the "back to school" schedule. This is part of the frozen foods company's effort to establish itself as an affordable choice in challenging times, especially in the UK and Italy.

Although not sharing many specifics about the campaign messages, Descheemaeker noted that The Captain will play a prominent role in the communications, serving as a "hero" for the brands. This is particularly true in the UK and Italy, where the character is most recognizable. Furthermore, Nomad intends to adopt a more assertive approach in terms of emphasizing its quality and pricing to consumers, reflecting the brand's newfound commitment.

He also mentioned plans to increase promotional efforts to close price gaps with private label alternatives. These efforts will be supported by higher spending on media. Additionally, he hinted at upcoming product launches later in the year, as Nomad continues to prioritize innovation. This focus on innovation extends to their 'green' food categories, which Descheemaeker believes still have considerable strength despite a challenging economic environment in the industry.

Nomad forecasts that this investment will represent 4% of sales by the end of the year, a significant increase compared to the previous year's 3%. "This increased advertising and promotion investment will drive our volume and market share in the latter half of the year and beyond," Descheemaeker informed investors during an earnings call.

Revenue in the three months ending on June 30th increased to €745m, representing a year-on-year growth of 6.9%. Descheemaeker expressed satisfaction with the continuous organic revenue growth for the fifth consecutive quarter. Despite a decrease of 9.4% in volume during this period, it was counterbalanced by an increase of 18% in price. This is reflected in the gross profit for the period, which rose by 6.8% to €210m. Additionally, the gross margin of the business remained stable at 28.2% due to successful cost recovery through higher pricing. Nomad Foods' co-founder, Noam Gottesman, stated in support of the results that the company is enthusiastic about the renewed investment in advertising and promotion to drive long-term growth and regain market momentum for the rest of the year.

“Frozen food remains an excellent value for all consumers, and we see plenty of opportunities ahead. We are investing in sustainable long-term growth and remain focused on driving value.”