Premier Foods restructures logistics

Premier Foods is combining the logistics operations of its Grocery and Sweet Treats businesses in one centralised warehousing and distribution operation.

The company, whose brands include Ambrosia, Mr Kipling and Bisto, has targeted logistics as part of a plan to deliver cost savings of £20 million over the next two years.

In its results for the year to 1st April, it said the benefits of this restructuring “are expected to significantly reduce annual transport miles and pallet transfers”.

Group underlying sales were down 1.4 per cent to £790m last year, while underlying operating profit was down 9.3 per cent to £117m.

Chief executive Gavin Darby said: “This financial year has been a challenging one for the industry, with the return of food inflation and changing retailer promotional strategies.”

“With the industry changing rapidly, we have updated our strategy to give an equal focus to revenue growth, cost efficiencies and cash generation.”

As well as restructuring its logistics operations, the group has decided to reduce its executive leadership team from ten to seven and also reduce the number of roles at its head office by over 50. This aims to reduce duplication and complexity in some functional areas.

It is also working on continuous improvement programmes in manufacturing.