Bread Business Overhaul On Track at Premier Foods
The restructuring of Premier Foods’ bread business is on track to deliver £20 million in cost savings in 2013.
The bread business is focusing on a major restructuring programme during this year, with the closure of three bakeries, two distribution centres, a mill and a significantly reconfigured logistics network. This programme is on track, with the closures of the Eastleigh bakery and Glasgow mill having been completed in the first quarter.
The savings from the restructuring programme are expected to offset the margin lost from a previously announced contract loss, which is expected to take effect by the end of April. This contract accounts for approximately £75 million of annual sales.
Following the decision to organise the Grocery and Bread divisions separately, the Bread business will operate from Premier Foods’ High Wycombe offices from the third quarter this year.
Sales in the Bread business (excluding Milling) in the three months to 31 March 2013 were 0.8% ahead of the same period last year and the market share of the flagship Hovis brand was broadly unchanged. In the second quarter, the Hovis brand is expected to benefit from a new packaging re-design giving strong standout on shelf in this highly competitive category.
