Birds Eye owner to hike ad spend by 70% to boost volume and share growth

Nomad Foods, owner of Birds Eye in the UK, is planning to increase advertising and promotions spend across the group by about 70% as it targets market share growth in the second half of 2023.

Speaking as the frozen food company  posted results for second quarter today (9 August) and its CEO Stefan Descheemaeker claimed he was “very excited” about the activity, aimed at growing share in all of its markets. The investment has been agreed partly to arrest the 1% fall in market share and volume it saw this quarter.

Descheemaeker announced that the planned spend will go live “within the week” and is aligned to the “back to school” schedule as the frozen foods company looks to position itself as an affordable option in challenging times, particularly in the UK and Italy.

While not offering too much detail into the messaging behind the campaigns, Descheemaeker did say that The Captain, will feature prominently in the communications and act as a “hero” for the brands, again particularly in the UK and Italy where the character is best known. He did announce that Nomad will look to be more “aggressive” in terms of its claims to the consumer in terms of quality and price, something he says the brand is committed to doing now.

Steve Challouma returns to marketing as CMO of Birds Eye ownerHe also spoke of increasing promotional activity to help narrow price gaps to private label alternatives which will be supported by increased spend on media – and also teased some more product launches later in the year as Nomad continues to place stock in innovation. This extends to its ‘green’ food categories which Descheemaeker still sees “considerable strength” in despite a more challenging economic environment for the category.

Nomad expects this investment will account for 4% of sales by the end of the year, significantly higher than 2022 where it accounted for 3% of all sales. “This increased A&P investment will drive our volume and market share throughout the back half of the year and beyond,” Descheemaeker told investors during an earnings call.

How Birds Eye attracted 2.4 million new customers under lockdownRevenue increased to €745m, up by 6.9% year-on-year, in the three months to 30 June – with Descheemaeker particularly pleased with this being the fifth consecutive quarter of growing organic revenue. While there was a 9.4% decrease in volume during this period it was offset by an 18% increase in price. This ties into its gross profit for the period which increase by 6.8% to €210m while the businesses gross margin held steady at 28.2% as higher pricing led to a successful recovery of higher input costs.

“As we look ahead to the balance of the year, we are excited about the renewed investment in A&P to drive long-term growth and recapture market momentum,” said Nomad Foods’ co-founder Noam Gottesman, in a statement supporting the results.

“Frozen food remains an excellent value for all consumers, and we see plenty of opportunities ahead. We are investing in sustainable long-term growth and remain focused on driving value.”