Owner of Birds Eye Nomad Foods is prioritising restoring lost volumes but, despite an expected improvement this quarter, a return to growth is not anticipated until next year.
Price increases by Europe’s largest frozen-foods maker to offset input-cost inflation have propped up revenue but at the same time have weighed on volumes and market share. CEO Stéfan Descheemaeker also suggested there has been a backlash from some retailers, resulting in lost shelf space.
Volumes continued to decline through the third quarter even though Nomad Foods, the owner of brands such as Findus and Goodfella’s, pledged in May to boost advertising and promotional spending from the second quarter onward as a countermeasure to the rise in private label.
Advertisement and promotional investment increased to 5 per cent of sales in September from 3.5 per cent a year earlier which Descheemaeker deemed as "consistent" with maker's objective to return to share and volume growth. He expects “volume and share trends to improve in the fourth quarter, ultimately returning to growth in 2024 and beyond”.
It emerged in August that Nomad Foods is planning to increase advertising and promotions spend across the group by about 70 per cent as it targets market share growth in the second half of 2023.
While declaring results for second 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.
He added that Nomad Foods 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.
