PREMIER FOODS PLC

Premier Foods PLC



Premier Foods PLC

Task 1

Question 1

Premier Foods plc (Premier Foods) is principally engaged in the manufacture and supply of food products in the UK and Ireland. The company offers its own-label products in variety of food categories, which includes ambient grocery sectors such as cakes, soups, vegetables, stocks, gravies, spreads, ambient desserts, home baking, cooking sauces, Asian meal solutions, pickles, beverages and chilled ready meal. Premier Foods supplies its products to a broad range of customers such as major retailers, wholesalers, food service providers and other food manufacturers. It operates in 70 sites, which includes offices, factories, bakeries and mills in the across the UK and Ireland.

Question 2

Hovis bread

Mr Kipling cakes

Sharwood's Asian foods

Batchelor's soups

Loyd Grossman sauces

Bisto gravy

Quorn meat-free products

Ambrosia custard and rice pudding

Branston pickle

Hartley's jams marmalades and jellies.

Question 3

Due to the breadth of categories that the Group covers, Premier has no principal competitor who operates across all of the same categories. The competitors that the Grocery division faces range from multinational food companies to smaller family or private equity owned businesses. Competitors who have significant branded shares in the categories in which we operate include H. J. Heinz Company (soup, baked beans), the Baxters Food Group (soup, pickles), Unilever PLC (stocks, cooking sauces), Masterfoods (part of Mars Incorporated Group) (cooking sauces), United Biscuits (cakes) and Andros UK Ltd (preserves). Hovis' principal competitors in the wrapped bread and morning goods markets are Warburtons Ltd and Associated British Foods plc (Kingsmill). The principal competitor in the bulk flour market is ADM Milling Ltd. Within the chilled market our principal competitors are Northern Foods plc, Bakkavor Group h.f. and Greencore Group plc.

Question 4

It is important to consumers and shoppers but for many deciding what is the right thing to do can be confusing and complex. Research has shown that consumers and shoppers will look to governments and manufacturers to help them and as the UK's largest food producer, it is recognised our responsibility. There was an increase in costs as a result of problems in the Meat-free manufacturing and packing operations. In the first half of 2010 we intend to address the supply chain issues by contracting-out more of the operations (Prince, 2010, 25). This will result in a further charge for restructuring the supply chain in the first half of 2010. An increase in gross profit as a result of the higher sales was offset by the higher operating expenses leaving trading profit down 26.5%.

Task 2

2009 was dominated by concerns over the economy with the impact of the financial crisis and the continuing recession in the UK. There was also uncertainty over how this would impact the food industry — would consumers switch to discounters and would they trade down from branded products to own label? More important has been the resilience of food brands despite the spending pressure on consumers. In the face of these challenges, it is seen sales of £2,661m up 2.2% on 2008. Trading profit for the year was £323m, an increase of ...