Premier Foods invests in price promotion as inflation begins to ease
The Bisto-owner has committed to “sharpening” its promotional spend in the second half of its financial year, which it expects to drive increased sales volumes.
Premier Foods, the owner of brands such as Mr Kipling, Batchelors and Bisto, is investing in price promotion as it sees inflation pressures begin to ease.
Speaking to media on a call today (16 November) CEO Alex Whitehouse said the company is seeing many input costs begin to fall. In the first half of the business’s financial year, ended 30 September, it took the opportunity to reduce prices across some of its biggest brands, with a particular emphasis on lowering promotional pricing.
A pack of six Mr Kipling slices is now available to buy on promotion at around £1.50, down from £1.75, Whitehouse said. Similarly, earlier this year, Batchelors Super Noodles would have cost around £1 on promotion. Now, it costs around 80p to 90p to buy these on promotion.
Looking into the second half of Premier Food’s fiscal year, the company will “sharpen” its investment in promotional pricing, which is expected to drive improvements in volume sales for the business.
Retailers ramp up promotions as price-conscious consumers shop more carefully
In the first six months of the financial year, the business saw headline revenue grow by 19.2% to £484.4m. Sales in Premier Foods’ branded business grew by almost 15.8%.
As part of its ‘branded growth’ model, Premier Foods will also continue to invest in its brands. Whitehouse told Marketing Week that the company has a “multi-year commitment” to increasing its marketing spend.
It increased investment behind all its major brands in the first half of the year. Whitehouse said the level of investment behind each brand is determined by where it sees opportunities for growth and where it believes it will get the best ROI “over the long term”.
The company has continued investment behind its ‘Best Restaurant in Town’ initiative, aimed at showing consumers how to make affordable meals using Premier Foods’ brands.
Why Premier Foods is increasing investment behind its home dining campaign
While the pressures of inflation may be beginning to ease, the company believes showing consumers how to use its brands to make low-cost meals will remain relevant. In the first half of the year, it increased the number of brands involved in the campaign, which has been running since 2022, and invested in more “mainstream” media placement for it, including TV and digital.
In-store execution is another way Premier Foods is chasing visibility for its brands in supermarkets to drive sales. The first half of the year saw Batchelors Super Noodles launch an on-pack promotion partnership with the new Batman movie, while Mr Kipling partnered with Minions earlier in the year.
The first half of the year also saw Premier Foods acquire breakfast brand FUEL10K. Today, Whitehouse expressed confidence the business’s branded growth model would help drive strong returns on the acquired business.
He gave an update on The Spice Tailor, another brand acquired by the brand in July 2022.
“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.
