Premier Foods embraces price promotions as inflation shows signs of abating

Premier Foods, the company behind renowned brands like Mr Kipling, Batchelors, and Bisto, is investing in price promotions as it observes a decline in inflationary pressures.

During a media call on November 16th, CEO Alex Whitehouse mentioned that the company is witnessing a decrease in several input costs. In the first half of the company's fiscal year, which ended on September 30th, Premier Foods took advantage of this opportunity by reducing prices for some of its major brands. This initiative particularly focused on decreasing promotional pricing.

A pack of six Mr Kipling slices is currently on promotion for approximately £1.50, marked down from £1.75, according to Whitehouse. Similarly, Batchelors Super Noodles were previously priced around £1 on promotion, but now can be purchased for approximately 80p to 90p during promotions.

Moving forward into the second half of Premier Food's fiscal year, the company plans to enhance its investment in promotional pricing to boost volume sales for the business.

During the initial half of the fiscal year, the company experienced a commendable surge in headline revenue, reaching £484.4m, reflecting a remarkable growth of 19.2%. Moreover, Premier Foods witnessed a significant increase of almost 15.8% in sales for its branded business.

In alignment with its "branded growth" strategy, Premier Foods intends to persistently invest in enhancing its brands. Whitehouse affirmed that the company has a long-term dedication to amplify its marketing expenditure.

Investment in all major brands was increased during the first half of the year. Whitehouse explained that the allocation of investment to each brand is based on the potential for growth and the expected long-term return on investment. The company has also continued to invest in its 'Best Restaurant in Town' program, which aims to educate consumers on creating cost-effective meals using Premier Foods' products.

While inflation pressures may be easing, the company believes it is still important to demonstrate to consumers how they can use its brands to create affordable meals. To that end, Premier Foods has expanded the number of brands participating in the ongoing campaign and has invested in more mainstream media placements such as TV and digital advertising.

In addition, Premier Foods is also focusing on increasing the visibility of its brands in supermarkets through in-store execution. In recent months, Batchelors Super Noodles collaborated with the new Batman movie for an on-pack promotion, and earlier in the year, Mr Kipling partnered with Minions. These initiatives are aimed at driving sales and generating awareness for the company's brands.

Premier Foods acquired breakfast brand FUEL10K during the first half of the year. Whitehouse expressed confidence in the business's branded growth model, expecting it to generate strong returns on the acquired business. In July 2022, an update was provided on another brand acquired by the company, The Spice Tailor.

“The Spice Tailor is now benefitting from the commercial capabilities and category expertise of the group,” Premier Foods reported today, stating that the brand is now growing above expectations.