Hovis has endured a difficult time of late amid a fierce price war across the bread category, which has led some to speculate that its owner, Premier Foods, may sell off the family favourite to help secure its financial future.
In its 2011 full-year financial results, trading profit in its bread division was down a massive 90.4%, as aggressive pricing dominated the aisle, where Hovis is up against competition from the likes of Warburtons and Kingsmill.
As by far the biggest brand in the company's bread division, which also includes Mothers Pride and McDougalls, the writing down of the value of the division by £282m can only reflect badly on Hovis.
A dispute with Tesco in 2010 over passing on a price rise led to the retailer refusing to stock the range. While this was rectified last year, being absent from a supermarket with 30% share of the market has a knock-on effect.
Nonetheless, Hovis hasn't been standing still in the face of a tough market. In January, it revamped its packaging so that it now features a blue band running around the loaf to highlight the ingredients. In addition, a Union Jack design has been positioned behind the logo.
The brand also re-ran its blockbuster TV ad, 'Go on, lad', earlier this year in an effort to turn around its fortunes. The execution follows a young boy from 1886 buying a Hovis loaf, then running home through seven scenes from British history, including World War I, suffragette demonstrations and the miners' strike.
Earlier this month, Hovis also switched its ad account from Dare into JWT London in a bid to get some fresh thinking on its future creative strategy.
With the closing of one bakery, though, and the loss of 80 jobs, what does the bread brand need to do to raise its game?
We asked former Premier Foods head of marketing Sheraz Dar, who is now marketing director of Digital Property Group, and David Golding, partner at Adam & Eve, which works with FMCG clients.
SHERAZ DAR, MARKETING DIRECTOR, DIGITAL PROPERTY GROUP (FORMER PREMIER FOODS HEAD OF MARKETING)
Most of us can recall a Hovis ad. And let us not forget the 122-second 'epic' that celebrated 122 years of the brand a few years back. However, heritage and acclaimed advertising is only part of the brand challenge.
Hovis is a huge brand, so we do need some perspective. However, within an aggressive sector it isn't growing share and it isn't delivering the profits Premier Foods needs from it.
I sense consumers have fallen out of love with the brand and have leaned toward others such as Warburtons and Kingsmill in that space.
All brands can end up in aggressive pricing battles, but when the price point, in general, is higher, is there a stand-out reason to pick Hovis? Does it enjoy a quality advantage or motivating product differentiation versus the competition to justify it?
The fallout with Tesco last year when the brand was off the shelves will not have helped either. Who took up the slack and did Hovis ever get that back?
I get the impression that many of the challenges are operational, and not just marketing-centric.
- Is there an appetite to take Warburtons and Kingsmill head on? Creating a range of standout products could let Hovis embark on a consumer taste mission.
- Inject some fun into the product and the communications to help invigorate the brand.
- This will put it at the forefront of consumers' minds and liven up the category.
- Focus on improving retailer relations - no presence, no sales.
DAVID GOLDING - FOUNDING PARTNER, ADAM & EVE
Since the success of 'that ad', Hovis has suffered from the dual curses of a reduction in marketing spend year on year, and an inconsistent and more product-focused strategy.
It couldn't have picked a worse time to lose its mojo as it continues to be at the mercy of fluctuating wheat prices and de-listing spats with Tesco.
Consumers look to brands that display confidence during hard times and Hovis could have been a beacon of enduring values through thick and thin (the economy, not the slices).
It also feels as if the innovation in this sector is coming from the premium end, from 'proper' bakers such as Gail's and Paul. Artisan products and specialist brands are flourishing, but, sadly, Hovis has failed to secure a lasting brand health from that flush of success.
- Sustained media investment. The whole category is scaling back on its spend and Hovis needs to take advantage of a cheaper share of voice and expand in the face of contracting competition.
- Recognise the power of creating a lasting emotional brand connection, especially in tough economic times.
- Enduring values need to be demonstrated in relevant actions. A combination of a consistent brand message and bright innovations around that would give Hovis a vital sense of momentum and trust.
- Launch innovations that reflect growing artisan bakery trends, giving Hovis a vital sense of momentum.