Premier Foods, the UK ambient food manufacturer, has joined a select group of UK FMCG brands that have delivered three years of consecutive growth – here’s how.
Though the business has some of the UK’s best-loved brands and a high household penetration, many of them were not keeping up with consumer needs and as such found themselves in terminal decline, said UK marketing director Yilmaz Erceyes. (For more, read WARC’s in-depth report: How Premier Foods drives growth with brand building and innovation)
Internally, the focus had become all about shoring up short-term volume to hit immediate targets rather than building the brands and business for the long term. “That negative business momentum had a huge impact on the culture,” he added.
“We pivoted the company from a trading-level organisation to a brand-building and innovation-led, consumer-focused organisation,” Erceyes explained. As with most categories, the business soon found, innovation matters: “In our portfolio, we see a very clear correlation: if a brand has a higher rate of innovation, it grows faster than the rest of the portfolio.”
The first test was in Angel Delight, the children’s dessert powder, one of the smaller brands in the company’s portfolio, which had fallen out of favour with parents concerned about artificial ingredients.
A complete recipe redevelopment means that, the strawberry flavour, for example, now comes from real strawberries – and that’s prominent on the new packaging. At the same time, the brand tapped into the convenience trend, adding a ready-to-eat version in a pot that eliminated the need for any kitchen preparation work.
“The brand went from an 8% decline to double digit growth two years in a row – 13% growth in year one and 14% growth in year two – and we are now in our third year.”
The Batchelors range of convenience foods – dried noodles and soups, pasta sauces – is about ten times the size of Angel Delight. “We’ve done exactly the same on our core range,” said Erceyes, revising the recipes and taking out ingredients like MSG while also halving cooking times.
The subsequent trajectory was similar to that of Angel Delight, as the brand’s decline slowed from -6% to -2% in the first year after relaunch before moving into positive growth of 7% annually in the next two years “and the brand is now in its third year of high single-digit growth this year” – this in a low or no growth market.
It’s essentially a “virtuous growth model”, he said. “We’ve proven brand-building innovation delivers sustainable sales and profit growth.”
Sourced from WARC