Sales at Premier Foods, the company behind Bisto, Mr Kipling and McDougall’s, are expected to surge by a fifth as UK families turn to home cooking during the pandemic.
“Britain’s getting cooking again,” said Alex Whitehouse, the chief executive of Premier Foods. “People are reaching for their recipe books and trying out new meal ideas.”
Shares in the company rose 14% on Wednesday after it said high demand for flour and cake mixes, gravy, pasta and curry sauces meant sales and trading profits would be ahead of expectations for the three months to the end of June.
About 1.6 million more people tried Bisto gravy for the first time during lockdown and McDougall’s flour sales also doubled, prompting the company to switch to 24-hour production seven days a week at its Andover mill to keep up with demand.
Whitehouse said it was unclear how demand would change as cafes and restaurants reopen as it was impossible to predict how keen families would be to head out to eat while the physical distancing rules are in place.
But he said Premier Foods was likely to be resilient in the face of any recession. “When people come under personal economic pressure one of the thing that goes is going out for a meal at the weekend,” he said.
All Premier’s manufacturing and distribution sites remained fully operational throughout the coronavirus crisis with 100 new staff taken on to help meed demand.
Analysts upgraded profits forecasts as they predicted a prolonged change in habits that could boost sales growth from the 2.8% rise achieved in the year to 28 March when the group made a pretax profit of £54m compared with a loss of nearly £43m a year before. Whitehouse said the company had enjoyed nearly three years of consistent growth, paid down debts and negotiated a pension deal that meant the company was now in a “very different place”.
“It seems likely that this rate of growth will moderate over the next few months as life returns to normal; however, some of the changed habits are likely to remain, particularly the greater focus on cooking and family life,” said Charles Hall, an analyst at Peel Hunt.
Online wine sales also surged during lockdown, according to specialist retailer Naked Wines. Sales surged 81% in the two months from 30 March with a top-seller a French Sauvignon Blanc. Nick Devlin, the chief executive, said sales from existing customers were up 50% and sales from new shoppers had more than doubled as store closures enticed wine buffs to try ordering online for the first time.
During the pandemic, online wine sales in the US have surged to a quarter of the market from just 5% before. “We believe that in the US market there has been a fundamental reassessment and some of that will stick,” Devlin said.