Premier Foods has signed an agreement to sell and market Mr Kipling cakes in the US, as it reveals the brand is on track for ‘another record year’.
The deal between Premier Foods and Weston Foods, a North American baking company, was announced in its trading update today (19 January) with the first shipments of cake expected to commence in the first quarter of the 2021/22 financial year.
It forms part of Premier’s international strategy to deliver ‘sustainable profitable growth’ with a major emphasis on in-market execution and ensuring the optimal route to market for its brands.
This has already seen Mr Kipling venture to Australia, delivering ‘very healthy sales’ alongside Cadbury cakes in Q3 – the 13 weeks ending 26 December 2020. The brand is also being tested in Canada with ‘encouraging’ sales so far.
Premier Foods’ overall international business grew strongly in this quarter with sales up 43%. This was partly helped by the buy in of products ahead of the 31 December EU exit date.
It added that with a free trade agreement with the EU in place, it is not expecting any material impact from tariff changes. To date, the new arrangements have not resulted in ‘any major disruptions’ to its supply chain.
Premier Foods’ Sweet Treat division generated sales of £81.6m in Q3 2020/21 – a 0.5% increase compared to the same quarter in 2019/20. Year-to-date sales for the division sit at £186.3m.
Growth was driven by branded products, which includes Mr Kipling and Cadbury cakes, which accounted for £55m worth of sales in the quarter – an increase of 5% versus the previous year.
Mr Kipling is on track for ‘another record year’ with sales rising 7% in the quarter, alongside further market share gains. The brand has continued to benefit from the launch of new product ranges and an extended period of marketing investment, Premier added. Recent NPD includes reduced sugar Viennese Whirls and After Dinner Chocolate & Orange Fancies.
Cadbury cakes also increased its market share and saw sales increase both in the UK and overseas.
Sales of non-branded sweet treats, meanwhile, fell 7.5% to £26.6m.
“Looking to the remainder of the year, out of home eating is likely to remain heavily restricted and we therefore expect to see continued high levels of consumer demand for our products. With more brand investment to come, we now expect trading profit to be in the range of £145-£150m this year,” said CEO Alex Whitehouse.
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Editor, International Bakery
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