Premier Foods plc announced earlier this week that it will establish its bread business as a standalone joint venture, in which US private equity firm Gores Group will hold a majority stake. The company clearly hopes that - in conjunction with its new partner - it will be able to rejuvenate its the struggling bakery unit. Nevertheless, a number of challenges lie ahead for the heavily indebted UK food major. Katy Askew reports.
Premier Foods plc, which is cutting its network of suppliers in half as part of cost-saving plans, has asked firms to sign up to "strategic partnership" deals that could lead companies to invest more in innovation and product development.
Premier Foods' new austere message has encapsulated the mood of the time. Gone are the days of frivolity - this firm is knuckling down and reducing complexity across the board. However, cutting costs may lead to higher margins - but the detail Premier has given on how it plans to invest behind its brands has been scant to say the least.