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Premier Foods faces fierce competition in UK breakfast biscuits

By Kacey Culliney , 06-Sep-2012

Hovis takes fire at the breakfast biscuits sector
Hovis takes fire at the breakfast biscuits sector

Premier Foods will need to invest to truly differentiate in the UK breakfast biscuit segment as competition is fierce from rivals like Kraft Foods and Kellogg, according to an analyst.

Last week Premier Foods launched a range of breakfast biscuits under its Hovis brand, marking a first-time venture into the segment for the bread icon.

Research estimates the emerging UK breakfast biscuit sector at around £33-40m.

Ramaa Chipalkatti, consumer insights analyst at Datamonitor, said that while it is an unsurprising move from Hovis, competition is intense.

“Brands like Hovis need to truly differentiate themselves to be successful,” Chipalkatti said.

Hovis should consider positioning products in the bakery aisle of supermarkets, she said, “to capture convenience-seeking breakfast shoppers”, rather than following Kraft’s footsteps and retailing in the biscuit aisle.

However, Sarah Frederickson, marketing controller for Hovis, said the product will be sold in the biscuit aisle to prevent consumer confusion.

Eating into the lucrative slot

Kraft Foods gobbles up the lion’s share of the breakfast market with its BelVita brand and “essentially pioneered the concept of breakfast biscuits in the UK”, Chipalkatti said. Within the first two years of launch BelVita shot to a worth of around £28m, she added.

Ildiko Szalai, analyst at Euromonitor International, said that BelVita is the strongest brand Hovis will have to face.

“But this category is just emerging and so it is not too late an entry from the bread brand,” Szalai added.

Hovis also has solid brand recognition and commands a healthy image, she said, and the breakfast biscuit line has been “very smartly developed with good health credentials and innovative packaging”.

Cereal giant Kellogg also has presence in the segment with its Nutri-Grain and Special K brands.

The Hovis Breakfast Bakes come in Oats & Honey, Malted Crunch and Milk & Oats and target busy consumers, especially women aged 25 to 45. The launch is within the UK market with no plans to expand into Europe or the US at this point.

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