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Premier Foods: Power Brands Strategy

Published: January 2013 · Publisher: MarketLine
A number of costly acquisitions led to huge debts for Premier Foods, which coupled with declining sales led to the company being in financial difficulty. In early 2012 a strategy was introduced focusing on the company’s Power Brands.
Report Type Case Studies
Language English
Format Electronic (PDF)
Pages23
Frequency Updated Annually
Availability Will be emailed within 1 business day
Reference No. 0109-2778
Price € 369,00
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Introduction

A number of costly acquisitions led to huge debts for Premier Foods, which coupled with declining sales led to the company being in financial difficulty. In early 2012 a strategy was introduced focusing on the company’s Power Brands. This case study will examine the factors that led to the introduction of this strategy, how the strategy has been implemented, and the success of the strategy so far.

Features and benefits

* The publisher's Case Studies describe topics such as innovative products, business models, and significant company acquisitions.
* Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.

Highlights

The acquisition of large brands led to Premier Foods becoming the largest producer of branded food in the UK. However, the cost of these acquisitions left the company with a lot of debt. Premier Foods was struggling to pay interest on its loans and its sales and profits began to fall. As such the company was facing increasing financial difficulty.
In July 2011, Michael Clarke was announced as the new chief executive officer (CEO) of Premier Foods, to replace Robert Schofield in September 2011. Clarke was tasked with turning the fortunes of the company around. Clarke adapted the structure of the company and replaced around 60% of the management.
Clarke announced that Premier Foods would be focusing on 8 of its core brands in an attempt to rescue the company from crisis. This would involve driving marketing and innovation into the 8 Power Brands, whilst at the same time disposing of non-core bands in an attempt to simplify the business and raise money to pay off mounting debts.

Your key questions answered

* What factors led to the company falling into financial difficulty?
* What is the Power Brands strategy and how did it come about?
* How has the strategy been implemented?
* How successful has the strategy been thus far?
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O VERVIEW
Catalyst
Summary
PREMIER FOODS GREW THROUGH ACQUISITION
Early acquisitions began in the 1980s
The 2000s saw a major growth in the company’s brand portfolio
Bigger deals were seen post-2005
PREMIER FOODS FELL INTO FINANCIAL DIFFICULTY
Costly acquisitions led to huge debts for the company
The company was seeing a decline in sales
THE POWER BRANDS STRATEGY AIMED TO RESCUE THE BUSINESS
A new management structure was introduced
Michael Clarke restructured Premier Foods management team
Michael Clarke announced his Power Brands strategy towards the end of 2011
THE POWER BRANDS STRATEGY WAS INITIATED IN JANUARY 2012
The Power Brands strategy would focus on eight core brands
Hovis: The focus in 2012 planned to be on the homegrown ingredients
Mr. Kipling: A re-launch was planned for 2012
Ambrosia: The strategy for 2012 would be to focus on new packaging
Sharwood’s: A new product launch was planned for 2012
Loyd Grossman: A brand re-launch was planned for 2012
Bisto: A new television advertising campaign was planned for 2012
OXO: The reduced salt sock cube was to be marketed in 2012
Batchelors: The focus for 2012 would be the “fuelling Britain” promotion
The company ran a cost reduction plan alongside the Power Brands strategy
A number of non-core brands were sold in 2012
EARLY RESULTS INDICATE SUCCESS FOR THE STRATEGY
Grocery Power Brand sales showed particular success
The bread category has continued to face difficulty
CONCLUSIONS
Premier Foods is now a much smaller business than it once was
APPENDIX
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