CONSUMER CATEGORY REPORT

Transcription

1 CONSUMER CATEGORY REPORT MARCH 2015 Shopper Backdrop Consumer Topics Consumer confidence has remained stable for the past several months as the British economy continues its steady recovery. Confidence in personal household finances has crept up as key components of household expenditure, particularly food and petrol, have fallen. Shoppers have added more items to their baskets in response to lower food prices over recent months and this has led to improved volume growth in the GB grocery market. However, they are still price conscious and demand is expected to remain muted The discounters (Aldi and Lidl) account for 7.2 of the total grocery market, their influence has gathered pace over the past year in particular. Consumer loyalty to one store has been waning over time, with shoppers on average using four channels a month. Key reasons for this include trying to fit within household budgets or for convenience. This rise of multichannel shopping has added a new dimension to the retailer battle ground In 2014, the holiday season saw more people shopping online than ever before. Consequently, 49 of the value growth this Christmas came from the Online channel. For Meat and Poultry, this contributed to an increase in volumes, although value remained fairly static. CHANNELS USED PER MONTH ON AVERAGE Source: IGD ShopperVista 3+ channels 4+ channels 5+ channels CONSUMER CONFIDENCE INDEX DATA TO DECEMBER 2014 Source: European Commission/nVision FRESH MEAT 52 WEEKS TO 1 FEBRUARY 2015 Key Category Overview 1, , Chicken Pork Lamb Beef 426, ,821 70, , Volume purchases were down for pork and lamb and have increased marginally for chicken and beef, new buyers have been attracted into the beef category boosting volume and value The fall in pork expenditure was driven by a fall in average price of almost 5 While beef remains the most popular form of mince, pork is making steady ground in this cut choice, volume sales increased by over 20 year-on-year to February Value ( 000 s) Volume (Tonnes) Wider Category Movement Chilled main meal accompaniments (CMMA) had previously been losing volumes as existing shoppers bought less. However, consumers have recently been switching into this category from a number of others, including chilled and frozen ready meals Fresh burgers & grills continue to lead wider category growth. Despite higher average prices and fewer barbeque occasions over the summer, burgers remained popular. 52 w/e 1 Feb 2015 Value ( m) Value (+ -) Chilled Ready Meals 1, Frozen Ready Meals Chilled Main Meal Accomps 1, Fresh Burgers & Grills Frozen Burgers & Grills Red Meat Ready to Cook SHARE OF FRESH Fresh Beef Fresh Lamb Fresh Pork Fresh Chicken Total Fresh MEAT Meat and Poultry value value value value 12 w/e 1 Feb 2015 MAT MAT MAT MAT RST MAT share change share change share change share change TOTAL MARKET Top 4 Multiples Other Multiples Total Independents & Symbols Total Butchers Market Stalls All Other Outlets Total Hard Discounters Grocery Retailer Overview Retail Update The discounters have been taking market share from the other retailers, having raised their combined market share of total fresh meat and poultry to 9.2, from 7.3 a year ago. This growth is ahead of the total grocery trend Purchases of all red meats were down at the Butchers in the latest 12 weeks. In the Christmas period, Butchers performed behind the market for the first time since Grey indicates low sample size

2 UK Market Snapshot Fresh Pork Update KPI Movement Expenditure on fresh pork is down due mainly to lower average prices compared to last year, a trend that was seen for much of Annually, the amount of fresh pork purchased was flat, however, in the latest 12 weeks, volume purchases were down despite lower prices, as sales were impacted by a poorer Christmas performance compared to Fresh turkey and beef were the clear winners. The amount spent on pork was down, driven by a decline in pork roasting joints, as less people bought them, less often and at lower prices. Key Movement by Cuts Pork chops/steaks and loin roasting saw a decline in the amount being purchased. While loin struggled, other cheaper pork roasting joints, namely shoulder, performed better no doubt helped by all the media coverage and increasing availability of pulled Fresh Pork: 12 weeks ending 1 Feb 2015 Actual Year-on-year change Spend ( 000) 191, Volume (000kg) 39, ( ) (kg) Penetration () Frequency Volume per Buyer (kg) pork as a dish. Pork mince, while still only some 5 of fresh pork sales, has performed strongly no doubt helped by its price position versus beef and lamb mince but also by featuring more in gondola end Y for X promotions such as 2 for 7 or 3 for 10. FRESH PORK VOLUME PURCHASES DEMOG OF TOTAL DEMOG 52 WEEKS TO 1 FEBRUARY 2015 Pork Shopping Profile Understanding the beef shopper profile When looking at the share of volume purchases across the age groups pork, lends itself towards households with an older profile namely 55+ (accounting for 49 of purchases). However, the profile within the cuts does differ. Roasting joints, with the exception of shoulder, index even more heavily with older consumers, while mince over-indexes with younger consumers. Mince also over-indexes with larger households of 3 members or more Looking at volume purchases of fresh pork by life-stage, then retired households which account for the largest share of total fresh pork purchases at 27 saw the biggest volume declines year on year. However, these losses were offset by pre and young family households. CUISINE PERFORMANCE Source: KANTAR Useage Pork: In-home Useage Viewpoint Cuisine Size (m) 52 w/e Dec w/e Dec 14 (52 w/e Dec 14) vs. 52 w/e Dec 13 vs. 52 w/e Dec 13 (Actual Change) ( Change) The growing popularity of ethnic cuisines such as Indian and Mexican is showing no signs of abating, British dishes such as the traditional roast continue to suffer. The growth of international dishes naturally presents an ideal opportunity for dishes such as pulled pork, which research has shown, does resonate with BPEX s target market According to the latest Kantar Useage data, the number of in-home/carried out roast dinner occasions fell by 5, with the decline of roast pork being exactly the same. The decline is driven by the fall at the main teatime/evening meal occasion as, at lunchtime, the number is actually up Convenience remains the order of the day for time poor households, with the average meal now at 32 minutes which is almost half the time taken in One of the challenges for pork is that it over-indexes versus other proteins in terms of the planned meal occasion which is more time-consuming There is a shift away from steaks & leg joints towards roasting joints, namely shoulder and mince Teatime/evening meals remain by far the key consumption period for pork, however, it is here where it s coming under most pressure In terms of absolute number of occasions, pork chops/ steaks are driving the biggest declines, followed by roast occasions.

3 UK Market Analysis SAUSAGES 12 WEEKS TO 1 FEBRUARY 2015 Source: KANTARWorldpanel The recent positive performance of premium sausages is notable, a strong volume uplift of 6.9 has emerged from the latest sausage numbers Easing financial conditions may mean that consumers, in increasing numbers, now consider premium sausages an affordable treat Discounters grew sausage sales ahead of the market. The big four multiples saw volume and value decline in this time period Butchers had a strong Christmas and, despite losing share, remain the leading sausage sales outlet, by value, after the big 4 supermarkets More sausages were sold as part of a promotion in the last 12 weeks compared to last year ,125 tonnes Total Sausage Sales 186,836,000 Premium Sausages Sales 74,263, kg SWITCHING SUMMARY Fresh Premium Premium Sausages 14,273 tonnes Premium Sausages 5.20kg In Growth In Decline Loose Standard Frozen Standard VOLUME SAUSAGES SOLD ON PROMOTION Width indicates importance of switch Size of bubble represents total net switching SALES CHANGE Fresh Standard Hard Discounters Butchers Shops Top 4 Multiples Volume Value SALES CHANGE Hard Discounters Top 4 Multiples 28,157 tonnes Total Ham Sales 252,640, kg Volume Value HAM 12 WEEKS TO 1 FEBRUARY 2015 Source: KANTARWorldpanel The decline in total expenditure is due to modest dips in average retail price and volume sold. The price drop is approximately in line with grocery inflation in this time period Discounter supermarkets have made impressive ham value and volume gains, mainly from the big 4 multiples. In context though, the discounters have increased volume by around 780 tonnes and, combined, the big 4 multiples 2.4 volume decline equals 495 tonnes Standard ham sales have increased year on year since Trading up to premium ham is difficult because of the price difference It is likely that standard ham will hold its position as market leader unless the average price gap narrows. STANDARD HAM SHARE BY VOLUME 9.66/kg Standard Ham Year to Feb 11 Year to Feb 12 Year to Feb 13 Year to Feb 14 Year to Feb /kg Premium Ham

4 UK Market Analysis BACON 12 WEEKS TO 1 FEBRUARY 2015 Source: KANTARWorldpanel Total bacon sales have remained stable, premium bacon sales have risen by 40 since last year and by 79 compared to 2011 Premium bacon sales did not drop off quickly after Christmas, as it has done in previous years Premium bacon is often included in deals and promotions Private label bacon consolidated its position as leader in the latest quarter, at the expense of branded. In some supermarkets, 98 of bacon sales are through their own private label ,373 tonnes Total Bacon Sales 367,728, kg BACON VOLUME SOLD AS PART OF A PROMOTION (TONNES) PREMIUM BACON SALES VOLUME (TONNES) PREMIUM BACON SALES VOLUME (TONNES) BACON SALES BRANDED VS PRIVATE LABEL (TONNES) Source: BPEX/AHDB (DAPP = Deadweight Average Pig Price) Pence / kilo Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DAPP 2012 DAPP 2013 DAPP 2014 APP 2014 Dec DAPP to EU Specification GB finished pig prices have been under pressure since the early summer and had fallen by around 20p/kg by the end of the year. The APP (one of two new price measures which have replaced the DAPP) for December was below 148p/kg, around 24p lower than the DAPP a year earlier. The fall is largely due to increased supplies of UK pig meat being met by subdued consumer demand on the domestic market, although low EU prices have also contributed Despite the fall in pig prices, average producer margins remained positive for most of 2014 due to low feed prices following a second consecutive harvest without any major weather disruptions. However, by the end of the year most producers were at or below their break-even point and further price falls in the New Year will have put most into the red for the first time in 18 months EU pig prices have fallen even more sharply than UK prices since the summer, partly due to the impact of the Russian ban on imports of EU pork products. By the end of the year, the average price had fallen to around 130 per 100kg, the lowest level in nearly five years. With the pound strengthening against the euro, the sterling equivalent dropped below 1/kg in early 2015 and the gap between UK and EU prices remained at a record level, peaking at nearly 40p/kg.

5 In Brief CHRISTMAS TRADING PERFORMANCE Understanding the beef shopper profile Grocery sales in the 4-week period to 4 January 2015, which incorporate the run-up to Christmas, show that shoppers took advantage of food price deflation and stocked up on volume. Online was a key success over this period, supported by the extra trading day in the week before Christmas. The 6.4 million online grocery transactions made in the 4-week period (half of which were through Tesco) contributed to half of the overall market growth Online has growing appeal for Christmas shopping, with 12 of shoppers using this channel to purchase their Christmas groceries in 2014, up from 7 in While Online benefited from the extra trading day this Christmas, Convenience dropped off as people did less last-minute shopping. For the first time in recent years, Convenience did not deliver significant growth at Christmas The majority of proteins delivered volume growth in Christmas 2014, for most this came on the back of a difficult trading in Focusing in on roasting performance, three of the five major proteins delivered volume growth. Competitive pricing and strong promotions resulted in all five recording a reduction in average price compared to last year Promotions played a key part in driving sales, Beef and Lamb roasting joints in particular were heavily promoted and both delivered volume growth. Beef roasting promotions increased from 38.1 to 76.3 and the lamb percentage stood at Within Turkey the long-term shift towards Crowns & Joints continued. Chicken and Pork remained the lower priced roasting joints, however, reduced pricing on the higher priced meats (Beef, Lamb and Turkey) helped draw shoppers in. Demonstrating that value for money does not always mean the lowest price consumers can trade up as they strive for value. TOTAL MARKET CONTRIBUTION TO GROWTH BY CHANNEL 4 WEEKS TO 4 JANUARY 2015 ROASTING JOINTS FRESH PROTEINS VOLUME CHANGE 4 WEEKS TO 5 JANUARY Beef Lamb Pork Chicken Turkey Roasting Roasting Roasting Roasting Roasting THE PULLING POWER OF PULLED PORK (PART ONE) A major new marketing drive to rejuvenate the image of pork with younger pork consumers gets underway this spring, but how did the campaign originate? BPEX Marketing needed to change strategy, due to changes in legislation which meant that the points of difference upon which the marketing team previously based their work, were largely removed. While learning about the supply chain, head of marketing Kirsty Walker listened to the issues the farmers, processors and retailers were all facing and noticed a pattern emerging which was an industry-wide problem that younger people (25 55 yrs) are buying very little or no fresh pork. One industry insider said: Young people aren t buying pork because they don t know what to do with it and they don t see it as a healthy meat. This prompted research to investigate who buys fresh pork, how often and in what quantity. The results reflected the concerns expressed by industry stakeholders. Historic research on consumer attitudes to pork were examined, and repeated, to check current consumer attitudes and to ask why consumers don t buy pork for home consumption. BPEX Marketing found that consumers aged between still saw pork as tough, dry, bland and chewy. It was clear that this was big problem for all stakeholders and it was going to become a bigger problem over time. Continued on next page

6 In Brief THE PULLING POWER OF PULLED PORK (PART ONE) continued We needed to get year old consumers to think differently about pork. Kirsty then asked pork processors two questions: Where could value be added to the carcase? And is there any seasonal variation? The answers were clear. If we could stimulate demand for the shoulder joint it would add value to the carcase and there is very little seasonal variation. Could the answer be Pulled Pork? It s popular in foodservice and the shoulder joint is perfect for pulled pork could this dish be the meeting point between addressing an industry issue and tapping into a consumer trend? BPEX Marketing did further research to test the theory, looking at cooking times, ease of recipes and enjoyment of the dish and found the dish was a hit. Research showed that if a household had tried pulled pork once, they loved it and went on to cook it again, even those who previously didn t think they liked pork. The challenge is now to persuade people to cook it for the first time. It is for this reason that BPEX Marketing is embarking on an integrated marketing and communications campaign, which includes TV advertising hitting our screens in early May. The campaign will also be supported by social media couscous Pulled pork with Moroccan and in-store activity across major retailers and has the backing of all the leading processors. It will aim to drive more people to retailers and butchers to buy pork shoulder and encourage them to visit lovepork.co.uk for a range of inspirational new pulled pork recipes. To be continued... Pulled pork with sage and onion Pulled pork sliders Slow cooker pulled pork Read more about these and other stories in Pig Market Weekly. To view past editions or to subscribe, click here. Agriculture and Horticulture Development Board (AHDB) All rights reserved. While the Agriculture and Horticulture Development Board, operating through its BPEX division, seeks to ensure that the information contained within this document is accurate at the time of printing, no warranty is given in respect thereof and, to the maximum extent permitted by law, the Agriculture and Horticulture Development Board accepts no liability for loss, damage or injury howsoever caused (including that caused by negligence) or suffered directly or indirectly in relation to information and opinions contained in or omitted from this document. Contacts Jane Chapman Food Chain Manager Sukhvinder Gill Consumer Insight Manager BPEX Stoneleigh Park, Kenilworth, Warwickshire CV8 2TL Websites: