Premiumisation is a strong trend in ambient sauces but promotions are causing an overall value decline

A rise in innovation - prompted by the early success of chilled pasta sauces - has led to more consumers trading up in the ambient pasta sauces category and to a growth of 4% to £259m over the past year. However, the focus on premiumisation has resulted in a decline in the family pasta sauces sector.
Julie Gilroy, category planning manager at Unilever, says: “As growth in the family sector slows, the percentage of products sold on promotion increases, resulting in a spiral of value decline that must be stopped.
“Retailers and manufacturers have a joint responsibility to reduce the promotional heat within the market. Both sides need to reduce bogofs without losing footfall, which is not easy to do.”
While the family sector is less concerned with provenance, instead prioritising taste and
convenience to target the midweek meal occasion, increasing numbers of consumers are attracted to the sophistication of premium products.
Organic brand Seeds of Change, for example, has experienced year-on-year value growth of 36% [ACNielsen September, 2005], underlining strong and growing consumer interest in organic and premium products. Alan Clark, trading manager at Musgrave Budgens Londis, says: “Seeds of Change invests significantly in above-the-line support rather than price
Meanwhile, pesto sauces have greatly benefited from consumers’ interest in high quality ingredients, provenance and taste. Premier Foods has launched two pesto sauces under the Loyd Grossman brand - green and red - made in Tuscany to an authentic recipe. According to the company, the total pesto market is worth more than £21m.
Sacla’ is also noticing a rise in pesto’s popularity. “Pesto is a highly attractive category because consumer penetration is still low. Retailers are recognising the potential and helping us to drive awareness,” says Rob Sutton, director of sales and marketing at Sacla’.
He believes that pesto sales are cannibalising more traditional pasta bake sauces due to the enhanced taste of the stir-through sauces: “We are tracking declines in pasta bakes compared with 19% growth in pesto.”
Yet future NPD is required to add value while increasing penetration, according to Unilever’s Gilroy, who says that the category needs to be decluttered. “There is an over-reliance on launching new flavours. There are already too many products - within the family sector 90% of sales are covered by only 37 SKUs.”
NPD opportunities include creamy Italian ambient sauces, according to Premier Foods. In July it launched four Loyd Grossman branded creamy sauces - Carbonara with Pancetta, Tomato & Mascarpone with Vodka, Porcini Mushroom with Amontillado Sherry and Bechamel Sauce for Lasagne in a bid to add what it says is a much-needed premium offering.
Sue Knight, general manager for pickles and sauces at Premier Foods, says Premier has invested in new production methods to get the best quality sauces in order to replicate dishes eaten in restaurants. “Creamy sauces are very popular in restaurants, so there’s no reason why they shouldn’t be in the supermarket,” she says.
Sutton also acknowledges the potential for creamy sauces and says that ambient versions are successfully taking on chilled. However, he says that Sacla’ would only enter the creamy category if it really believed it could offer significant and differentiated quality benefits.
Seasonal recipes are another way to drive interest in the category. Loyd Grossman claims it was the first cooking sauce brand to offer seasonal recipes back in March 2004 using a similar approach that New Covent Garden Food Company uses with its seasonal soup products.
Its most recent autumn limited edition is Tomato & Chargrilled Courgette with Sicilian Lemon appealing to consumers seeking a change from standard offerings.
Dolmio, meanwhile, launched Chunky variants of its pasta sauces to emulate a more home-cooked recipe and to emphasise the nutritional values of its products.
Dress Italian believes that consumers are ready to move away from standard sauces and the likes of Loyd Grossman have encouraged consumers to demand more premium products. The company produces four simple sauces, in basil & tomato, sun dried tomato, sweet cherry tomato and red hot chilli. “There is an increasing consumer trend towards more wholesome products where quality of ingredients, methods of preparation and levels of additives such as sugar and salt are playing a greater role,” says Dress Italian director Peter Parmigiani.