Overall non-branded sales jumped 17% compared to a 0.7% increase in branded sales in the quarter.
The UK food manufacturer said the 19.6% increase in non-branded sales in its Sweet Treats unit benefited from increased volumes of mince pies, contract wins in seasonal lines and growth in the discounter sector.
King of the mince pies
The Mr Kipling cakes maker sold a record 220 million mince pies in 2017 – four million more than a year earlier.
However, performance was hampered by a 7.3% decrease in branded sales in the Sweet Treat unit, with the company reporting Cadbury cake sales fell due to “short term capacity constraints” and a move to “more optimal promotional activity.”
Sales of Mr Kipling cakes was also lower due to the promotional activity changes.
It said its Grocery division saw total sales increase 4.8% to £180.7m ($249.3m), with branded sales ahead 3.4% and non-branded sales up 13.9%.
Group sales up 4%
Despite the setback in sales of its Sweet Treats unit – up just 2.2% to £80.7m ($111.3m) – Premier reported a 4% rise in group sales in the 13 weeks to December 30, 2017, to £261.4m ($360.6m).
International sales grew by 26%, driven by continued strong progress in Australia, the launch of Mr Kipling and Cadbury cake in New Zealand and a number of new customer listings for Sharwood’s in Europe and the US.
“Our International business produced another excellent quarter and our partnerships with Nissin and Mondelez International continue to deliver strong performances, demonstrating their strategic benefits to us,” said Premier’s CEO, Gavin Darby.
Premier Foods also confirmed it was in talks with Japanese noodle maker Nissin Foods, its largest shareholder, to sell Batchelors for £200m ($276m), despite several SKUs accruing good results.
Batchelors’ Super Noodles in a pot has delivered over £5m ($6.9m) sales since its launch last year, while Soba Noodles has delivered £2m ($2.7m) sales since the group received distribution rights.
The company is considering the sale in an attempt to reduce its debt burden, which is seen as uncomfortably high.
However, it said savings from its cost reduction program were being made across the business and net debt at the end of 2018 will be lower than the prior year.
“With our leading category positions and commitment to product innovation, our expectations for progress this year remain unchanged,” said Darby.