Exit Schofield: Premier Foods appoints new ceo

By Anne Bruce

- Last updated on GMT

Can Premier's new ceo arrest the firm's profit slide?
Can Premier's new ceo arrest the firm's profit slide?

Related tags: Management occupations, Cadbury plc

Premier Foods has pleased the City and commentators with the speedy appointment of Mike Clarke from Kraft Foods as its new ceo, after analysts described a late June trading statement as "shocking".

Clarke (pictured), president of Kraft Foods Europe which includes the UK Cadbury business, will join Premier as ceo on September 1.

Current incumbent Robert Schofield will leave after a short handover period, and his departure comes after the firm announced in April that it was searching for a new ceo, with Schofield planning to retire after 10 years in the job.

Enter the white knight

Schofield's continued presence at the helm had puzzled some industry watchers, with one claiming that Premier needed a "white knight"​ from outside the company.

And analyst Martin Deboo from Investec welcomed Clarke as "straight out of central casting for a UK Grocery ceo​" with an "impeccable consumer goods CV​".

Another City analyst told FoodManufacture.co.uk this morning that it was “definitely a positive​” that Premier had made an external rather than internal appointment.

He said: “Premier said that the process of replacing Schofield would take up to 12 months and our back of envelope calculations were that it would take four months to do a full external review. However, chairman Ronnie Bell also comes from Kraft so will have a good insight into Clarke’s capabilities​.”

Julian Wild, corporate finance partner at Rollits in Hull said: “It was critical that they get a new ceo in place. The extended departure of Schofield was not helpful as it added ongoing uncertainty to a company already under pressure​.”

But Wild added that the City “liked a bit of distance between the chairman and ceo​” and said he was not sure how the fact that Bell and Clarke were both from Kraft would be received. Bell was with Kraft for 30 years before joining Premier as non-executive chairman in October 2010.

Disposals necessary

Wild said that Clarke would be in “a bit of a bind​” as to how to take the company forward. However, he was going to have to continue to make disposals, said Wild, with own-label chilled foods and caked business RF Brookes and Avana Bakeries one obvious candidate.

But Wild added that Greencore, which had been tipped as a potential buyer for the business, now had its hands full following the revelation yesterday of its £113m bid for Uniq.

Meanwhile, Martin Deboo suggested in a note: "Clarke will need to simultaneously revive Premier's near-term trading performance, re-stimulate its long-term brand equities and innovation pipeline, rebuild the confidence of its customers, suppliers and investors and continue the restructuring of its balance sheet and funding arrangements. Phew. So there is no room for weakness here. And we are indeed positive on Clarke's potential to succeed​."

Paul Fieldhouse, chairman of brand strategy company Bryt said he hoped that Clarke would focus on strategic thinking, developing positive relationships with the trade and getting back in tune with the consumer, rather than just focusing on selling volume.

He suggested: "The company needs to streamline, and focus on branded grocery and bread. We need to see innovation on the brands. It also needs to be about promoting the brands, whcih requires good relationships with the trade, not just trading the backside out of them​."

Clarke, 47, was president of The Coca-Cola Company, northwest Europe (including the UK) & Nordics before joining Kraft.

Premier chairman Ronnie Bell said: "I am delighted to welcome Mike as ceo. I very much look forward to working with him as we focus on delivering our branded growth strategy and continuing to reduce debt."

Clarke said: "I am enormously excited about the prospect of joining Premier Foods with its powerful portfolio of brands. I look forward to working … to drive the growth of the business and ensure that it delivers on its tremendous potential."

Tim Cofer, currently senior vice president, global chocolate category team, will succeed Clarke at Kraft in mid-August.

Related topics: Ambient foods, Bakery, Chilled foods

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