Tesco announced in March that it would drop Kingsmill, which was the retailer's third best-selling bread brand. Overall, Kingsmill sales were down by 11.1% year-on-year in 2014 to £371M, according to Nielsen.
The retailer was still an important customer for AB, claimed Law. “They launched Kingsmill Sandwich Thins [recently] and we still supply a lot of own-label bread to Tesco,” he said.
“We are disappointed that Kingsmill isn’t on the shelves of Tesco and we have to think that we will get it back on the fixtures again soon. We hope that they will change their minds.”
Apart from Kingsmill bread being dropped, AB’s total business with Tesco had remained stable, Law claimed. “I don’t think that we are particularly disadvantaged, it’s one of those things that goes around in circles,” he said. AB would continue to supply Tesco with its Allinson and Burgen bread brands.
Law was speaking at the re-launch of AB's Stevenage facility, which had undergone a £31M investment on its bakery line.
The investment at Stevenage bakery was part of a wider £210M five-year programme across five AB sites, which was claimed to be the largest UK bakery investment in recent years.
Meanwhile, other plant bakery suppliers have raised concern over Tesco’s decision to drop Kingsmill. Tim Davies, chief executive of Carr’s Group, said some supermarkets had gone from stocking three key brands in certain categories down to two, which was causing “turmoil” in the industry.
According to market research firm Mintel, a decline in plant bread sales of 5.6% in the past year was likely to result in more casualties. Many supermarkets were known to be rationalising their ranges in all categories, Mintel added.