It’s been less sago, more saga. Thanks to limited supply and excessive demand, Heston’s Christmas puddings for Waitrose have stirred up foodies and profiteers alike since they first appeared in 2010 - and the country is now waiting with bated breath to see whether another three-fold increase in stock will prevent the retailer selling out for a third successive year.
Blumenthal’s desserts aside, though, own label has been thoroughly trounced by the brands in the past year. As retailers’ lines post paltry 1% value and volume growth, the brands have grown by 21% in value and 47% in volume [Kantar Worldpanel 52 w/e 2 September 2012] to make up 20.6% of the market by value and 28.9% by volume.
Given that this time last year value sales were barely in growth and volumes were down 5%, it wouldn’t be an overstatement to say the brands’ performance has turned the hot desserts category around. But just what have the brands been doing to drive such growth?
For one thing, they’ve been investing in promotions. Kantar Worldpanel analyst Charlotte Elver points out that volume sold on deal has risen by more than a third year-on-year, bucking the wider trend towards price cuts for a shift to multibuys. “Temporary price reductions have decreased and there has been a significant increase in multibuy and extra-free deals,” she says. “X-for-y is now the biggest promotional strategy.”
“X-for-y is now the biggest promotional strategy in the hot desserts category” Charlotte Elver, Kantar Worldpanel
That doesn’t mean own label has been standing idly by. The big five have significantly increased the number of deals offered on own-label chilled, frozen and ambient desserts - by a fifth on standard lines and 34% on premium [BrandView.co.uk 52 w/e 6 October 2012]. But this hasn’t been enough to match the brands. Ambrosia, for instance, has increased its promotions by 38% year-on-year [BrandView.co.uk 52 w/e 6 October 2012]. Aunt Bessie’s has boosted deals by 43% - and Gü by a whopping 60%.
Not that promotions are always a recipe for sales success. Gü’s investment hasn’t been able to prevent a 7% decline in value and 13.3% drop in volume sales for the brand [SymphonyIRI 52 w/e 6 October 2012]. Gü is now hoping to capitalise on the rise of one particular mechanic - the meal deal, which made up 4.6% of all chilled dessert deals in the past year, up from 2.4% the year before [BrandView.co.uk] - to help revive sales.
“Gü is confident the rise of the meal deal will continue,” says Gü Puds category controller Luke Richardson. “We are now exploring opportunities within the convenience market as well as the retail environment.”
The brand is also looking to tap into seasonal sales, he adds. Christmas is a key time for Gü, with sales rising by around 200%, and it is currently capitalising on this with limited-edition festive packs. It also has plans for romantic packaging around Valentine’s Day 2013.
Another priority has been advertising. The brand ramped up its spend 67% in the year to 31 August 2012 [Ebiquity] - predominantly focusing on TV, but also on print, including two Valentine’s Day print ads for the brand’s Passion Soufflés. Its TV spots have helped Gü achieve 50% unprompted brand awareness, claims Richardson - and this October, the brand appointed its first brand activation agency, signalling its commitment to improving that figure further.
“In times of austerity families look for products they love and are reasonably priced” Paul Watmore, Premier Foods
Aunt Bessie’s, meanwhile, has tripled its investment to £11,464 [Ebiquity]. Although the brand focused on press in the year to 31 August, it has since moved into TV to advertise its Family apple Pie, building on existing sponsorship of ITV’s All Star Mr & Mrs.
With value sales up 5.8%, albeit on the back of a 1.9% dip in volumes, the brand is looking healthier than Gü. It’s one of several brands - including Cartmel (which has more than doubled value and volume sales thanks to an increased range and increased distribution in Waitrose) and Ambrosia (up 11.3% in value and 4.3% in volume) - benefiting from a surge in the popularity of old-fashioned puds.
It’s easy to attribute this comfort eating to consumers seeking relief from the gloomy economy and miserable weather. But industry insiders suggest other factors may also be at play. Take, for instance, the rise in popularity of home baking, which Cole’s Puddings MD Scott Goodfellow suggests is fuelling the growth in traditional British favourites. Richardson, meanwhile, attributes “the broader trend for more indulgent desserts” to “a cultural shift in attitude”, with consumers increasingly considering indulgent treats part of their daily routine.
Some brands in particular are benefiting. “In times of austerity families look for products they love and are reasonably priced,” says Paul Watmore, brand director of desserts and homebaking at Premier Foods, which makes Ambrosia. “Rice pudding is the perfect example. We plan to capitalise on this growing trend by concentrating on driving our core products such as Ambrosia rice pudding and Ambrosia custard, and also have plans to support these key products with above-the-line advertising throughout 2013.”
Kantar Worldpanel: hot desserts
- Growth in the market has been driven primarily by the amount bought, which has grown around 12% year-on-year, although frequency of purchase has also increased. Growth in volume may be the result of promotions shifting from price cuts to multibuys.
- Sponge puddings and pies & tarts account for more than half the category, but both have lost sales, driven in the case of sponge puddings by a decline in frequency and penetration. Pies & tarts have decreased in penetration but are in value growth, driven by increases in purchase frequency and average price per kg.
- The market is dominated by own label, which has a value share of almost 80% - but in the past year volume sales of branded products have risen 45%.
- Marks & Spencer has the largest share of the market and overtrades, as do Waitrose and Sainsbury’s - but Waitrose is the only one of the three in growth.
Ambrosia’s recent success, however, bucks the trend in rice pudding. The sector has declined 10.4% in value and 1.6% in volume [Kantar Worldpanel] as consumers increase consumption of other puddings, including bread & butter pudding (up 8.5% in value and 15.5% in volume) and spotted dick (up 14.2% in value and 1.1% in volume).
Although Ambrosia’s sales growth is likely at least partly down to NPD - it launched a range of 12 ambient rice pots in March - Watmore believes familiarity and value remain more important than innovation. “There seems to be a trend towards comfort and stability within hot desserts,” he says. “We have not seen great experimentation going on.”
Others, however, beg to differ. Cartmel, for instance, has rolled out three crumbles in the past year - and many other brands have invested in NPD, including pudding-in-a-pot brand Lovetub, owned by Hain Daniels, which is catering for the festive season with its Merry Mince Pie Pudding. “Our advice to retailers is clear,” says Joanna Kayes, Hain Daniels Group category marketing controller for desserts. “Stock a range of convenient format puddings and traditional favourites to generate maximum profits from the fixture.”
“Stock convenient formats and traditional favourites to generate maximum profits” Joanna Kayes, Hain Daniels Group
Although the growth in some traditional favourites supports the idea that Brits are clinging to comforting puddings, it’s not all about the familiar. The pancakes sector has posted strong growth, with value sales up 22.5% on a 21.4% rise in volumes. Retailers have responded, with both Waitrose and Tesco offering filled chocolate crêpes. The brands are also catching on: Dutch chilled pancake brand Abra-ca-Debora debuted a savoury and a sweet variant in Sainsbury’s and Tesco in September.
As for Heston, there’s been nothing on the pancake front as yet - but the range is continuing to push boundaries, with a chocolate brownie pudding the latest addition. The brands have little to fear from most own-label lines, at least for now - but they’d do well to keep an eye on Blumenthal.
Brands steaming ahead in hot puddings
- Currently reading
Brands steaming ahead in hot puddings