Will Carter steps down at Premier Foods as Kelly moves into new COO role
However, the move, which has prompted the departure of grocery division md Will Carter (pictured), has not been universally welcomed.
One source told FoodManufacture.co.uk: "Will Carter has a first class reputation in the business and I think a lot of people will be left wondering how to interpret this."
While Premier has not explained how the restructuring will benefit the business, the fact that Jon Goldstone (Hovis marketing guru) had recently made a "Jerry Maguire-style impassioned presentation to the board" about what needed to be done to drive the grocery brands had set tongues wagging, he said. Carter, meanwhile, "must have been very p***ed off", he claimed.
"Put it this way. It's easy to laugh at what's being done with brands like Sharwood's when you've got the marketing budget to play with that Hovis has had.
"There is also the fact that while Hovis is a big business, the contribution it makes to the bottom line of Premier is actually very small, and you could argue that the resources that are allocated to it are completely disproportionate to the contribution it makes to group profits."
Greater focus on brands
But Premier Foods said the reorganisation was a "natural next step", adding: "Premier Foods has created a new role of chief operating officer which combines all of the brands and commercial operations within the grocery and Hovis divisions under one management role.
"Tim Kelly, executive director and currently chief operating officer for Hovis and chilled will take on this new role and will report directly to [chief executive] Robert Schofield. The chilled business will report separately to the chief executive."
Schofield claimed the new structure was "a natural next step for us to ensure that we deliver on our core strategy of reinvigorating our brands through accelerated innovation as well as increasing marketing investment".
He added: "As a consequence of this organisational change, Will Carter, the current md of our ambient grocery business, will step down from his position and leaves us with our thanks for his contribution over the past years."
The changes will take effect from January 1, 2011
Hovis vs Tesco
Premier declined to comment on the progress of its dispute with Tesco, which delisted 11 of its Hovis-branded products in October after Premier attempted to push through a price increase on the back of sharply rising wheat prices.
However, asked whether there was any likelihood of the Hovis lines being relisted soon, a Tesco spokesman said: “Our customers are pretty happy with what we have, and as far as we’re concerned that’s our bread range now [without the delisted lines] and it’s very full.”
While the stand-off with Tesco had not significantly dented Premier's fortunes, the loss of volume would impact efficiency at its manufacturing sites, while being off the shelves for so long was also far from ideal from a branding perspective, said analysts.
Shore Capital analyst Darren Shirley said: "There’s been no material impact as yet, but as time goes on it will be interesting to see whether this is still the case.”
Jonathan Gabay from Brand Forensics said the lack of presence in Tesco must have an impact, although it was too early to assess how serious it was: "If you don’t supply even lesser known or niche variants of your brand you run the risk that someone else will, and this can plant the seeds in terms of brand damage."
