Jars are so last year. Even in austere times, consumers are happy to pay more for the convenience of smaller pouch and sachet formats
Cooking sauces - by their very nature convenient - got more convenient yet in 2011. Value growth of 5.1% in the face of static volume sales [Kantar Worldpanel 52 w/e 27 November 2011] was driven by new, smaller and easier-to-use formats. Sales of the humble jar inched up just 1.9% in value last year while pouches grew an impressive 15% and smaller sachets rocketed 21%.
The shift to smaller formats comes against a backdrop of spiralling costs for manufacturers. The lion’s share of the brands that achieved growth in 2011 ultimately did so by convincing shoppers to pay a higher price for less sauce, packaged in pouches and sachets rather than jars. Those that failed to give consumers a cogent reason for paying more for their sauce lost out to own label, which grew 8.9% in value and 8.6% in volume. So how did the brands make the more expensive option of tearing open a sachet more appealing than unscrewing a jar?
It’s simple, says Martyn Withers, founder of branding agency Embrace Brands - by packaging sauces in smaller formats, manufacturers have created the illusion of providing better value for money for today’s cash-strapped shoppers.
“The price of sachets and pouches is a key factor in the steep rise in sales,” he says. “They may be perceived to be cheaper than buying a big jar, even when this is not the case, so more people are likely to pick one up and try it.”
Others contest that consumers are fully prepared to pay more for products, even in today’s climate, if they give back something that money simply can’t buy. Waste-conscious consumers also prefer small pouches and sachets to larger jars that tend to languish, half-used, in fridges.
- Sales of cooking sauces, a sector dominated by brands, are up £0.7bn to 5.1%, with price the main driver of growth.
- The average price of a jar has remained static at £1.13 and growth of this format is low at 1.9%, but smaller sachets and pouches are performing strongly, with sales up 21% and 15% respectively.
- Traditional is the top- performing sector and all this growth is delivered by sachets, which account for just over 50% of traditional sauces. However, in Tex-Mex sachets are growing at just 2.4%.
- Tesco is the only one of the big four to outperform the market. It has done particularly well in traditional and oriental. M&S is strong in Indian, oriental and traditional but has failed to embrace new formats, with 92% of its sales through jars.
Pouch formats illustrate changing habits in both purchasing and consumption, says Carine Gauyet, senior brand manager at Bespoke Foods, owner of the Thai Taste brand, which repackaged its coconut milk product in single-use pouches in August and says it has been enjoying growing sales ever since. “Consumers no longer plan the weekly shop and make shopping lists. Instead they make purchasing decisions based on immediate meal needs,” she contends.
Nowhere are the benefits of repackaging sauces into more convenient formats better illustrated than in traditional sauces, which experienced a 15.8% hike in value sales last year, the steepest growth in any of the cooking sauce sub-categories. This is primarily down to one brand, says Kantar analyst Emma Benton: Colman’s dry sauce range Season & Shake.
“All of this growth is delivered by sachet formats such as Season & Shake,” she says. “Sachets account for just over 50% of traditional cooking sauce sales and are growing at 32%.” Brand owner Unilever quickly backed up its initial launches with a further four new recipes in September and another eight in November (see panel p53).
“Season & Shake revitalised the category and brought new benefits to consumers such as healthier, tastier ways of cooking, variety to family menus, and kitchens free from the mess you normally have after cooking a meal,” says Vanni Cataldi, brand executive at Colman’s, adding that 2012 will hold another round of new product development for the dry sauce brand.
Symington’s, meanwhile, has expanded its Ainsley Harriott dried sauces sachet range (see p53). Further pouch and sachet launches are on the cards in 2012 from players that have so far not responded to the trend with their own launches. “We are looking at some NPD for later in the year,” says Nic Yates, marketing controller at Patak’s, which will be launching a 165g paste product later in the year.
The success of pouches and sachets is not just down to their convenience, of course. Products such as concentrated pastes and increasingly exotic flavours help achieve high-quality results for consumers who are eating out less but treating themselves at home more. “Shoppers want help and inspiration in a convenient format,” adds Bea Avery, head of category strategy at Premier Foods.
However, Premier Foods’ temporary delistings from Tesco over prices last year, which involved both Loyd Grossman and Sharwood, show that simply sticking a sauce in a sachet and expecting shoppers to pay more for it isn’t enough. The food group launched its Sharwood’s stir-fry sauces in 100g pouches last February but still saw the brand’s value and volumes plummet by 7% and 9% respectively [SymphonyIRI], thanks in part to the falling out with Britain’s biggest retailer.
And, of course, the success of pouches and sachets in general means jars are on a downer. Premier’s other sauce brands, Loyd Grossman and Homepride, have had an equally torrid time, with sales down. While in Loyd Grossman’s case, a botulism scare added to the brand’s woes (it turned out to be an isolated case) (The Grocer, 12 November 2011, p12), it underscores the wider problems at the food group. Avery is upbeat about the future however. “Delistings do affect performance, but these are now corrected,” she says. “We are not expecting an ongoing impact following the botulism incident - it was an isolated scare and Loyd has a loyal consumer base.”
Given the challenges faced by the brands, it’s not surprising that several of them are evidently rethinking their 2011 advertising strategies. Last year saw eight of the top 10 spenders cut investment [see Ebiquity data p55], but there has been a notable increase in big name campaigns in the last couple of months.
“We sponsored National Curry Week in October and launched a great new TV commercial in November telling the next chapter in the Patak’s story,” says Yates.
Season & Shake Sticky Spare Ribs seasoning mix
Launched: September 2011
Colman’s Season & Shake - just add water and meat to the baking bag provided - was such a hit when launched last September that, by November, the Unilever brand had added a further eight flavours to the original four. The new flavours included Spanish Pork Casserole, Chicken Tikka Masala and Lemon & Herb Chicken. The sauce mix retails at £1.49 for a 52g sachet.
Very Lazy Cooking Concentrates
Launched: July 2011
Manufacturer: Very Lazy
Very Lazy’s range offers instant cooking sauce and a meal ready in half an hour. Simply add water, stock or wine to the glass jar in which the concentrate comes and follow the recipe on the cardboard sleeve. The eight concentrates in the range include Very Lazy Chilli Con Carne, Caribbean Chicken and Thai Green Curry. Rsp is £1.78 for a 185g jar.
No added salt cooking sauces
Launched: January 2012
Manufacturer: Hampstead Farm
Cooking sauce with no added salt? That’s the claim behind new-to-market Hampstead Farm’s range. Concerned about his high blood pressure, founder Kevin Stone spent two years in the kitchen creating the sauces: Red Chilli & Ginger, Ginger & Lime, Madras and Arrabiata. Red Chilli & Ginger is also gluten-free. Stockists are yet to be secured.
Ainsley Harriott dried sauces
Launching: March 2012
This spring two new Ainsley Harriott-branded dried sauces launch in Morrisons. Malaysian curry sauce and Hungarian goulash join Szechuan hot & sour and Indian lentil sauce. While the variants are well covered in wet sauces, Symington’s believes consumers want to see such flavours in a dried format. Rsp is 95p for 60g.
Much of the growth of oriental cooking sauces - chasing hot on the heels of Indian sauces (Britain’s best-loved ethnic food) with value growth of 5.6% and volumes up 4.5% - is down to a high-profile TV campaign by Uncle Ben’s, according to brand owner Mars. The £1m campaign was timed to coincide with Chinese New Year - marking the start of the Year of the Dragon - in January, and indicates that owner Mars may be rethinking its 2011 advertising strategy, which saw spend fall 23% y ear-on-year.
“The advert proclaimed Uncle Ben’s Sweet & Sour sauce the ‘nation’s favourite’ with a prize of £10,000 each for five winners through an on-pack competition,” says Wendy Wing, customer marketing manager for Uncle Ben’s. The ads helped the brand notch up value and volume hikes of 4% and 8% respectively and leapfrog Sharwood’s to seventh in the list of top 10 bestsellers [SymphonyIRI]. As well as looking to cement its credentials as the leading oriental home cooking sauce, the campaign will introduce a new jar shape to consumers to drive home the company’s ‘100% natural’ message.
Mars also invested heavily in its category-leading Dolmio brand with a £5.2m campaign trumpeting the brand’s ‘100% natural’ credentials. The campaign helped Dolmio win increases of 3% and 2% in value and volume sales in 2011 [SymphonyIRI]. This might sound small but it reversed a 3% slide in value sales in the previous year [SymphonyIRI 52 w/e 30 October 2010].
“We are working to keep costs low but cannot rule out the possibility of another increase”
Nic Yates, Patak’s
And that’s the challenge in this market: brands will need to market cannily if they are to sustain growth as volumes decline in the coming 12 months, say commentators.
Many of the category’s major players were forced to push through price increases in 2011 and the ones that prospered were those that justified the price hikes by giving shoppers additional reasons - convenience, new flavours and so on - for buying their products.
“Along with our competitors we had to take a price increase in August in order to cover rising costs,” says Patak’s Yates. “Our buying and production teams are working hard to keep costs as low as possible in 2012 but we cannot rule out the possibility of another increase. However we will not compromise on quality because we believe our consumers would taste the difference.”
His words are choice: Taste the Difference, and a raft of other own-label lines just like it, are clearly hovering in the wings, watching very carefully for any signs of the brands putting a foot wrong in 2012. This time next year, it will be interesting to see how the various battles - brands vs. own label, pouches versus jars - has panned out.