Get a demo Do I subscribe? News sign-up
Print

Premier Foods bucks 'power brand' trend

News, 16 February 2015

LONDON: Like other leading FMCG and food companies, Premier Foods has focussed on promoting "power brands" but it now intends to turn its attention to its smaller brands as well according to a leading executive.

"We now have the scope and space to one-by-one refresh every brand in the Premier portfolio, and I'm confident you'll see results," Alex Whitehouse, grocery managing director, told Marketing Week.

Over the past 18 months companies such as Procter & Gamble and Unilever have rationalised their brand portfolio to concentrate on fewer, bigger brands. But rather than sell off lesser brands, Premier Foods means to invest in them further.

"I'm not looking to cut any smaller brands," said Whitehouse. "It is now all about building them and once that cycle is complete, I think you'll see a very healthy business."

He cited the example of Homepride, the cook-in sauce, which recently appeared on television for the first time in many years: "You'll see similar activity now brand-by-brand," Whitehouse declared.

The company has significantly increased its marketing investment in recent months, with CEO Gavin Darby last month reporting in an earnings call that it would almost double in winter 2014/15 compared to the previous year, with more being spent in Q1 2015 than in Q4 2014.

Derby was also bullish about the coming year as he noted that one of the tactics being adopted by leading supermarket chains such as Tesco in their battle with discounters was to simply their ranges.

"I am extremely interested in supporting a retailer who wants to take 20% to 40% of their product lines out because it will benefit the faster selling lines and we typically have those," he said.

Premier also supplies discounters like Aldi and Lidl with some products but Whitehouse was undecided as to whether their rise was cyclical or a permanent shift.

"I'm convinced it will top out at some point, but at the end of the day we are a brand builder," he said.

That point hasn't yet been reached however, as latest figures from Nielsen, covering the 12 weeks to the end of January, show year-on-year sales growing rapidly at Aldi (+17.3%) and Lidl (+13.8%), taking their combined market share to more than 10%.

Aldi had also spent the most on advertising in relation to its market share.

Data sourced from Marketing Week, Seeking Alpha, Reuters, Nielsen; additional content by Warc staff