Sweet Treats branded headline revenue increased by 7.3% in FY25/26 for Premier Foods, with the category gaining further market shares as both Mr Kipling and Cadbury cake brands continued to see strong performance.
At the same time interest in healthier foods among consumers maintains momentum, while the prevalence of weight loss drugs increases.
How GLP-1s are impacting UK consumption
According to recent YouGov data, around 8% of Britons say they have used weight loss drugs, and 14% would consider using them in the future.
Eating patterns are changing for consumers on GLP-1s, with a clear shift towards so-called nutrient dense food. YouGov data shows many reporting an increase in their intake of vegetables (38%), vitamins (23%) and seafood (21%).
Reductions are most evident in snack and convenience food categories. As many as 64% say they eat fewer snacks, and 53% are reducing fast food consumption. Many are also reporting reduced alcohol (39%) and fizzy drink consumption (33%).
How Premier Foods has built in resilience
This paints an interesting dynamic. If health and small portion sizes are set to rule, why is it that people are still eating cakes made by Premier Foods?
For Alex Whitehouse, CEO of Premier Foods, it’s all about format.
The business is focused on boxed (or tubs of) cakes which are bought to share. According to Whitehouse, these are generally being consumed by families who are placing the cakes on the countertop, ready to be plucked up and eaten by the household as they pass by.
In the context of a family member being on GLP-1s, what the business believes is happening is that someone isn’t getting “their fair share”.
In other words, the reduced appetite of one family member is being offset by others.
A diverse portfolio
But robustness against any impact of GLP-1s will also be weathered by the firm’s diverse portfolio. Although snacks are fuelling growth, Premier Foods’ strong financial year has also been driven by its recent acquisitions into brands that are ‘future focused’.
Merchant Gourmet and Fuel10K are both clear examples of this, with products ranges that focus on protein and fibre – two hot ingredients that cater to the GLP-1 user and overall health and nutrition driven landscape.
Quality, occasion and cost
Premiumisation has also lent a hand here, with Whitehouse pointing to value per unit growth in this area.
“We’re seeing more and more there are consumers out there who are prepared to pay a bit more for products which are significantly better,” he said, flagging consumer interest in Merchant Gourmet alongside premium ranges added to existing brands, such as its Ambrosia Deluxe Custard.
Further resilience is embedded into the brand via its strong presence in components that make up meals – i.e. Loyd Grossman.
“We also know that by talking to our consumers taking GLP-1s that the family meal still gets cooked in the same way as it was before, it’s just that one person might not be eating as much of it,” Whitehouse said.
Cost has also played an important role in Premier Food’s strong results.
Whitehouse highlighted falling spend in takeaway, claiming that more than half of people on GLP-1s are eating at home rather than out. YouGov data supports this, showing monthly spend on takeaways among Brits has taken a sharp tumble, moving from £49 to £30.
“We’re selling relatively low-cost products that are used to put family meals together. If you’re trying to save money, the cheapest way is to cook a meal at home and that really lends into what our brands help people do.”
Future plans
The business wouldn’t confirm any specific gaps the business is looking to fill in the portfolio, but the CEO did say they are “very pleased” with the recent brand acquisitions it has made, which have all seen doubt-digit growth.
Merchant Gourmet is ahead of its acquisition plan having delivered £30 million of sales on a pro forma basis this year.
“We are always out there looking for similar brands that we can buy which are future focused from a consumer point of view, and which will respond well to our brand of growth model.”
He added that the business expects to make the international business “several times bigger than it is today”.
He continued: “That will be a combination of organic and probably inorganic. We’ve made some progress this year, I particularly point you to the US where we delivered 17% growth from a fairly modest sized space where we got Mr Kipling apple pies and cherry pies into a division of Kroger.”
For now, at least, it seems Premier Foods can have its cake and eat it.
