The three variants of Hovis Breakfast Bakes: Malted Crunch; Oats & Honey; and Milk & Oats will be manufactured by 2 Sisters at the former Northern Foods Fox’s Biscuits plant in Uttoxeter, Staffordshire.
2 Sisters gained Fox's Biscuits' Uttoxeter factory when it acquired Northern Foods in 2011.
Under the licensing agreement, which also provides for other healthier biscuit options to be developed under the Hovis brand in the future, 2 Sisters will pay a quarterly royalty fee to Premier.
The deal will run for five years from August 1, 2013 and 2 Sisters acknowledged it represented continued diversification outside of its meat processing heartland.
In a joint statement, the firms claimed the move marked an important step for 2 Sisters as it looked “to continually diversify and innovate within new food categories”.
“By combining the strong heritage and health credentials of the Hovis brand together with the biscuits expertise of Fox’s Biscuits, both companies foresee opportunities to target a genuine need among busy consumers to provide a healthier biscuit alternative and grow the category further.”
The £78M breakfast biscuits market represented the fastest growing segment of the healthier biscuits category, itself growing at 8% annually, according to Premier and 2 Sisters. They were drawing on exclusively supplied Nielsen Scantrack data for the 52 weeks ending June 22.
Commenting on the new licensing agreement, Colin Smith, md, Fox’s Biscuits, said: “I’m delighted with this agreement as it will enable both companies to be part of a relatively new and growing category.
“We see enormous potential to grow one of the nation’s favourite brands, which has such a strong association with natural ingredients and goodness, in the biscuits sector. We will look to create new varieties within the current Hovis Breakfast Bakes range as well as innovate with new products.”
Simon Devereux, business unit director, Premier Foods’ Bread Division, said: “This licensing agreement is an excellent way for us to extend the Hovis brand into adjacent categories.
“By working with 2 Sisters Food Group and Fox’s Biscuits, we have a partner with the biscuits expertise necessary to take full advantage of the market opportunities.”