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Premier renews £60M a year deal to make Cadbury cakes

By Rick Pendrous , 20-Dec-2012
Last updated the 20-Dec-2012 at 16:08 GMT

Premier Foods has renewed its long-standing license to manufacture Cadbury-branded cake products until at least June 2017 as part of its plan to boost growth in the cake category.

The new licensing deal negotiated with Cadbury owner, Mondelēz International, will provide a platform to drive growth of Cadbury-branded cakes and ambient desserts, including Cadbury Mini Rolls, said Premier.

The contract provides for the possibility, subject to approval, to the use of the group’s other trademarks for cake and desserts, opening the door to a range of additional growth opportunities.

Renewing the Cadbury cake license through to at least 2017 is an important step as we seek to build on the momentum in our Grocery business,” said  Premier ceo Michael Clarke.

“Cadbury is the fastest growing cake brand in the market and represents more than £60M in annual sale.”  

Clarke added: “We intend to collaborate closely with Cadbury to expand consumer favourites such as Cadbury Mini Roll as well as leverage other Cadbury trademarks over time where this makes sense. This new agreement unlocks exciting growth opportunities in one of our core Power Brand categories."

According  the latest data*, the value of the ambient packaged cake market is £1,024M. Premier Foods’ share of the market is 24.4% , of which Mr Kipling represents 16.3% share. Cadbury has a 7.2% share and Lyons 0.9% share. Premier claimed that Cadbury cakes grew by 4.7% in value over the last 12 months compared with 1.7% for the ambient packaged cake market.

* SIG All Outlets week ending September 1 2012

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