Premier Foods

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Premier Foods plc
Type Public
Traded as LSEPFD
Industry Food Manufacturing
Founded 1976
Headquarters St. Albans, Hertfordshire, United Kingdom
Key people David Beever, (Chairman)
Gavin Darby, (CEO)
Products Foods
Revenue £856.2 million (2013)[1]
Employees 4,283 (2013)[2]
Website www.premierfoods.co.uk

Premier Foods plc is a British food manufacturer headquartered in St Albans, Hertfordshire. It is listed on the London Stock Exchange and is a constituent of the FTSE SmallCap Index.

The group is heavily indebted[3] and is focusing on "power" brands: Mr Kipling, Ambrosia, Sharwood's, Loyd Grossman, Oxo, Bisto and Batchelors.[4]

History[edit]

The company was founded by Harry Solomon and David Thompson in 1975 as Hillsdown Holdings. His son Richard Thompson immediately went to work for his father after his education from Haileybury. The name came from Thompson's house - Hillsdown. In 1981 it acquired Lockwood Foods Ltd[5] which was in administrative receivership owing approximately £11 million to creditors. Lockwood Foods had canneries in Long Sutton and Forfar. In May 1987 David Thompson (entrepreneur) stepped down from Hillsdown Holdings selling 50% of his shares and became a non executive director in 1987. In April 1989 he sold all of his shares in a transaction that was arranged by Richard Thompson (businessman) himself.

In 1986, it bought various food businesses from Beechams[5] and in 1990 it acquired Premier Brands which included Typhoo and Cadbury's drinks.[5]

It was bought by the private equity company Hicks, Muse, Tate and Furst in 1999.[6] In 2002, it bought Nestlé's ambient foods business.[7] It was first listed on the London Stock Exchange in 2004.[8]

In 2004, it acquired the Ambrosia brand, that produced rice pudding and custard, from the Colman's division of Unilever.

In February 2005, Premier Foods acquired from Kraft Foods their ambient desserts businesses including Bird's custard and Angel Delight.[9]

In June 2005, Marlow Foods,[10] makers of Quorn, was purchased and this was followed in October by the acquisition of Cauldron, consolidating the two leading brands in the meat-free category.[11]

In October 2005, Premier Foods announced that it was selling Typhoo Tea to India's Apeejay Surrendra Group for $140 million. Immediately after the sale, The Sirhowy Group announced it had acquired a 2% stake in Premier Foods, supporting the company's strategy to make debt reduction a priority.[12] In March 2011 Premier Foods sold its meat-free business, Marlow Foods, to Exponent Private Equity for £205m ($331.6m). Marlow Foods manufactures and sells products under the Quorn and Cauldron brands. The sale has resulted in the creation of a new company, Quorn Foods.

Premier Foods said the deal was part of a strategy to reduce its debt, which built up following an acquisition spree that included Hovis-owner RHM and Campbell's Soup in the UK and Ireland.

In October 2005, Premier Foods launched Branston Baked Beans. The marketing and promotion of this product was aimed squarely at challenging Heinz's dominance of the UK baked bean market. This marketing included an advert, featuring a Branston Bean Tin explaining how Branston Beans are very "saucy." Heinz was subsequently obliged to re-evaluate its advertising strategy in the face of this aggressive activity.[13]

In 2006, Premier Foods acquired the UK and Ireland businesses of Campbell's for £460 million. Brands included in the deal were Oxo, Batchelors, Homepride and Fray Bentos. The iconic Campbell's Soup cans had to be rebranded as Batchelors Condensed Soup (as the brand itself was not acquired) but labels still carried the label "Formerly Campbell's. Same great taste."[14] Similarly, Campbell's Meatballs were rebranded as Fray Bentos.[15] Subsequently the closure, in December 2007, of the King's Lynn depot where Fray Bentos pies are made, was announced.[16]

In March 2007, Premier Foods completed the takeover of its rival RHM for £1.2 billion.[17] In July 2007 Premier foods announced it was to close the following RHM sites: Bristol, Droylsden (makers of Robertson's Golden Shred since 1890 and Sharwood's brands), Middlewich (makers of Bisto and Salts), Wythenshawe (makers of Sharwood's Pappadoms and Paxo), Ledbury (makers of specialist jams) and Reading (Foodservices).[18]

During 2008, the Hovis range was re-launched. In 2009, Premier Foods disposed of the frozen bakery business, including Le Pain Croustillant and Sofrapain.

In 2011, Premier Foods appointed Michael Clarke as Chief Executive Officer.[19] Disposals included the Quorn meat-free brand, Canned grocery and Brookes Avana businesses. The Mr Kipling 'Snap Pack' packaging (now renamed 'Snack Pack') launched, providing cakes in individually sealed plastic packs to keep them fresh, quickly becoming a top-seller for the brand.[20]

Early in 2012, Premier Foods announced it was to only use free-range eggs across all products sold by the business.[21] Later in the year, Gavin Darby joined as Chief Executive Officer, having previously worked at Vodafone, Coca –Cola and Spiller Foods.[22]

Premier Foods announced it had agreed a re-financing package [23] and arranged the disposal of Irish Brands, Vinegar & Sour Pickles, Elephant Atta and the Sweet Spreads & Jellies businesses including Hartley’s Jam and Sun-Pat Peanut Butter.

2013 saw the disposal of the Sweet Pickles & Table Sauces business, including Branston and Sarson's.

In early 2014, Premier Foods announced a new capital structure for the business which included an underwritten equity issue of approximately £353m, a new pension schemes agreement, a high yield bond of £500m and a new lending agreement with a smaller banking group. Premier also became a 'grocery-only' business with the movement of the Hovis brand into a Joint venture with US-based venture capital fund The Gores Group. The joint venture is co-owned (49% Premier Foods/51% The Gorse Group) and saw Hovis become a private company (Hovis Limited).

Operations[edit]

Premier Foods' largest brands include:

Competitors[edit]

Key competitors are Unilever, Associated British Foods, Northern Foods, Greencore and Interlink.

References[edit]

  1. ^ Annual Report 2013
  2. ^ Annual Report 2013
  3. ^ New Premier Foods chief executive plots revamp Andrew Cave The Telegraph
  4. ^ June 15, 2012 9:48 am Premier Foods agrees vinegar brands sale By Adam Jones
  5. ^ a b c Premier Foods: History
  6. ^ Published: May 15, 1999 (1999-05-15). "Hicks Muse buying a British food company". New York Times. Retrieved 2013-03-18. 
  7. ^ "Hicks Muse builds Premier Foods with Nestle brands buy". Findarticles.com. Retrieved 2013-03-18. 
  8. ^ "Premier Foods initiated with 'hold'". Newratings.com. Retrieved 2013-03-18. 
  9. ^ "Premier gobbles up Bird's custard". BBC News. 2004-12-10. Retrieved 2013-03-18. 
  10. ^ "Premier buys Quorn Firm for £172m". BBC News. 2005-06-06. Retrieved 2013-03-18. 
  11. ^ Barry Callebaut's Sofie De Lathouwer. "Premier buys Cauldron Foods for £27m". Just-food.com. Retrieved 2013-03-18. 
  12. ^ "Typhoo Tea bought by Indian Firm". BBC News. 2005-10-13. Retrieved 2013-03-18. 
  13. ^ Gill, Joe (2006-02-21). "Heinz to change baked beans recipe as it faces Branston challenge". Brandrepublic.com. Retrieved 2013-03-18. 
  14. ^ "UK shops to lose famous soup can". BBC News. 2007-10-01. Retrieved 2013-03-18. 
  15. ^ "Campbells Grocery Products Production Line Enhancements, Worksop, United Kingdom". Foodprocessing-technology.com. 2011-06-15. Retrieved 2013-03-18. 
  16. ^ Attwood, Karen (January 20, 2007). "Premier Foods to close two factories with loss of 450 jobs". London: The Independent. Retrieved January 20, 2007. 
  17. ^ Kamp, David. "Premier Foods pays $2.4bn for RHM". International Herald Tribune. Retrieved 2013-03-18. 
  18. ^ Premier Foods to close six factories
  19. ^ O’Reilly, Lara (July 14, 2011). "Premier Foods poaches Krafts Mike Clarke as CEO". London: Marketing Week. Retrieved July 14, 2011. 
  20. ^ "Individually packaged Mr Kipling slices introduced by Premier Foods". London: Wholesale News. July 11, 2011. Retrieved January 22, 2014. 
  21. ^ "Premier signs egg pledge as Whitehall chickens out". London: Food Manufacture. December 7, 2011. Retrieved January 22, 2014. 
  22. ^ "Premier Foods appoints ex Cable and Wireless Worldwide head Gavin Darby as new chief". London: Food Manufacture. January 28, 2013. Retrieved January 22, 2014. 
  23. ^ "Premier Foods announces refinancing deal". London. March 13, 2012. Retrieved January 22, 2014.