Premier Foods plc, the UK’s largest food group, said today (15 October) that the company had reduced its focus on own-label production in favour of its brands.
The company behind brands including Birds custard to Bisto gravy, said branded sales increased 6% during the quarter to 26 September.
Branded gains were led by a 22% jump in sales of Hovis bread. Meanwhile, sales of own-label products made for UK retailers dropped 8%.
“Brands have a higher mark-up than own brand products, so they are prioritised. If we use bread as an example, Hovis sales saw an increase in volumes last year – so volumes decreased in own label. If a brand is doing higher volumes, own brand is where the extra capacity will come from,” a spokesperson for Premier told just-food.
The spokesperson said that sales increases were the consequence of higher volumes rather than price increases.
“Last year, with exceptional inflation, saw a lot of price increases. Inflation is still there, but it has come down from around 17% to 4%, so now sales gains are largely the result of higher volumes.”