Premier Foods vows to double spend behind 'power brands'
Premier Foods, the company behind Hovis, Mr Kipling and Ambrosia, has committed to doubling its annual marketing spend across its eight key brands, at the same time as cutting costs and disposing of non-core businesses.
Hovis: one of Premier Foods' self-styled power brands
Chief executive Michael Clarke is attempting to transform the struggling company by focusing on what he described in October as its "power brands"– Hovis, Ambrosia, Mr Kipling, Sharwood's, Lloyd Grossman, Bisto, Oxo and Batchelors.
Six of the brands will return to TV advertising this quarter, "spearheading a full programme of new product innovation, promotions and marketing throughout the year", according to the company.
At the same time, Premier Foods said it would make cost savings of up to £40m with the expected loss of nearly 600 jobs, as well as speeding up the process of selling off non-core businesses.
The job cuts, equivalent to 5% of Premier Foods' 12,000-strong workforce, will be mainly concentrated on "overhead functions". A spokesperson said the company could not confirm whether the marketing departments would be affected as the company wide review had just started.
In today's statement (17 January), the company said its Christmas trading period was "in line" with expectations, but that its overall group financial results would be "at the lower end of current market expectations".
December's £30m sale of the Brookes Avana ready meals business and the planned sale of its four Irish grocery brands will help the company double its planned cost savings of £20m across the business by 2013, to £40m.
Its full-year results are expected in March, while it continues to hold discussions with its banks over a refinancing package.
Follow Loulla-Mae Eleftheriou-Smith on Twitter @LoullaMae_ES
This article was first published on marketingmagazine.co.uk
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