Annual results published today by Associated British Foods (ABF) show its Grocery division performed well after benefitting from easing input costs, increased investment in marketing, and new product launches.
The unit’s sales grew 4%, reflecting “good demand” across a number of its international brands and regionally-focused businesses. Its international brand businesses, which include Twinings, Ovaltine, Blue Dragon, Patak’s, Jordans and Mazzetti, accounted for approximately a third of total Grocery sales.
Twinings saw “strong” sales momentum led by volume growth across its largest markets, the UK, US and France. The group noted that this reflected increased distribution, particularly in the US, strong commercial execution to strengthen in-store visibility and a significant increase in investment and focus on marketing. Growth also benefitted from recent product launches, as ABF continued to expand its presence in the wellness category, including a growing portfolio of herbal and infusion teas.
Meanwhile, its UK-focused businesses, which accounted for approximately a quarter of Grocery sales, also performed relatively well. Allied Bakeries had a “much-reduced” operating loss compared to 2023 as a result of improved sales and operational performance. Silver Spoon delivered “strong” growth, benefitting from lower pricing and a brand refresh. The group’s Ryvita brand also made good progress, supported by recent product launches and advertising.
Adjusted operating profit margin for the Grocery segment improved to 12.1% overall, driving adjusted operating profit up 17% to £511m. ABF noted that the margin improvement reflected an easing in input cost pressures, strong performance in its US-focused businesses, and reduced losses in Allied Bakeries, partially offset by an increase in marketing investment.
