Premier Foods sees around £800m turnover in the UK every year selling products in ambient food categories such as cakes and desserts, cooking sauces and quick meals, including famous brands such as Mr Kipling.
The brand portfolio has 90% penetration in the UK and its biggest individual brands such as Bisto and Mr Kipling see as high as 50% household penetration.
Yilmaz Erceyes is UK Marketing Director at Premier Foods and spoke at the Festival of Marketing 2019 this morning detailing efforts across the portfolio to reverse sales declines seen in 2015 in a variety of brands such as Batchelors (-6%) and Angel Delight (-8%).
In Erceyes’ words, Premier Foods in 2015 had “become a trading organisation” was “dependant on short term sales and tactics” and needed to move away from being “very transactional”. To do this, Premier set about refreshing some of its brands that were starting to become outdated.
The new strategy aimed to:
- rejuvenate the core of the portfolio, modernising brands through renovation and media investment;
- be innovation led with new products that meet unmet consumer needs;
- and to power market-leading growth.
Erceyes shared a number of brand case studies which showed a correlation between rate of innovation and brand growth.
Product innovation with Angel Delight and Batchelors
A product synonymous with the 1970s, Angel Delight was the brand Premier Foods chose to road-test the new strategy. New formats were introduced with ready-to-eat products in pots, real strawberry fruit was used for flavouring across the range and this was made prominent on packaging.
The revenue growth was impressive, from -8% in 2015/16 to +13% in 2017/18 and +14% in 2018/19. Erceyes admits the results took him by surprise.
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But would this work for bigger brands?
The same strategy of product innovation was used with the Batchelors brand, which includes the Super Noodles, Cup-a-Soup and Pasta ‘n’ Sauce brands.
Premier Foods took out some MSG from the ingredients, reduced cook times and made packaging more convenient with pots. Again, a revenue decline (-6% in 2015/16), turned into a 7% revenue increase in 2017/18 and in 2018/19.
Brand building with Mr Kipling
In early 2018, Premier Foods relaunched Mr Kipling. Erceyes echoed the sentiments of Mark Ritson who had bemoaned in the morning keynote that marketers get fed up too easily with their own brand codes because they see them every day, when really they need to be focusing on distinctiveness by using these brand codes to make the consumer takes notice.
In the context of Mr Kipling, Erceyes talked about how Premier Foods decided to bring back an older version of the logo, re-emphasised the ‘exceedingly good cakes’ line and Mr Kipling’s voice, refreshed packaging designs and sought to establish an emotional connection with consumers through a new TV campaign.
The brand also sought to evolve with consumer needs and trends by bringing in a range of unicorn slices which quickly became one of their most popular products.
Alongside brand codes, Erceyes touched on another hot topic for marketers at this year’s Festival of Marketing – short-term vs. long-term thinking. He described the argument between brand building and brand activation as a false dichotomy, saying that although the ROI from in-store display for Mr Kipling’s partnership with Roald Dahl was very good, it was the slow-burn of an emotional TV campaign which was vital in building the brand in the longer term.
“Emotional campaigns outperform functional ones,” said Erceyes, adding that strong brands are a must and that maximising reach is necessary to maximise returns.
On the theme of mass marketing vs. targeting, a topic that Mark Ritson and Professor Byron Sharp debated at Festival of Marketing in 2017 and continues to generate discussion, Erceyes gave another case study – Bisto.
Mass marketing for Bisto
Erceyes used the leaky bucket analogy, saying that though Bisto is bought by 16 million customers every year, 7 million don’t buy it the next, meaning marketing has to constantly replenish the bucket.
Changing strategy from targeting defined subsets of the market (families) to the broader category users, whilst maintaining the same creative and selling in the same season (winter), led to a 14% increase in ROI.
Overall results and summary
“Fast forward to today,” says Erceyes, “and we’ve been growing for nine quarters.”
This is impressive when you look at a Kantar study which Erceyes referenced which showed that 57% of FMCG brands were growing in 2015, but in each successive year only roughly a half of those growing brands continue to grow. That means that only around 1/6th of brands grow for three years in a row.
That Premier Foods has managed to do this is testament to its strategy of innovation and brand building. Erceyes added that marketing needs to redefine its role as a creator of growth.