FDBusiness.com

Premier Foods expects to more than double the original £20 million cost reduction target, set last year, to over £40 million by 2013 by creating a stronger and more efficient business that will help release funds to invest behind driving the group’s recovery and growth plans. To achieve this target, every aspect of the company’s costs is being reviewed and a series of cost saving programmes will be initiated throughout the year that will result in reductions in the workforce, mainly from overhead functions. These reductions are expected to amount to approximately 5% of the company’s current workforce of around 12,000 employees.

Under the direction of a new leadership team, detailed plans have been put in place to focus investment behind growing the group’s eight ‘power brands’ of Hovis, Ambrosia, Mr Kipling, Sharwood’s, Loyd Grossman, Bisto, Oxo and Batchelors. Premier Foods is planning to double marketing spend behind these brands in 2012 and six of the ‘power brands’ will be back on TV with advertising in the first quarter, spearheading a full programme of new product innovation, promotions and marketing throughout the year.

To support the new focus on ‘power brands’, Premier Foods has accelerated the divestiture of non-core businesses, completing the sale of its Brookes Avana chilled food business and announcing the agreement to sell its four Irish grocery brands in recent weeks. Further selected businesses are expected to be divested in 2012 increasing the company’s brands focus and helping to deleverage the business.