With a host of rival formats appearing on supermarket shelves, is the writing finally on the wall for the humble tin can? Chloe Ryan finds it is not all doom and gloom
It's the 200th anniversary of the invention of the can. And the format is facing more competition than ever.
The popularity of microwaving food and concerns over oxidisation of opened cans in the fridge has prompted an increasing number of brands to launch alternative ambient formats.
Heinz is the latest to unveil a new challenger its 1kg Fridge Pack of baked beans, which hits shelves this month. The manufacturer has forecast first-year sales of more than of £10m for the format and predicts it will be as big as its other non-can format, Snap Pots, which has notched up sales of £35m since launching three years ago.
It is hoping that, priced at 16% more than the equivalent two and a half cans, the Fridge Pack will also inject some genuine value to the ambient category something canned foods are struggling t0 do. Sales might be up 4% in value, according to the latest data from Kantar Worldpanel [52w/e 13 June], but most of this is price-rise related and ominously, volume sales have stalled, dipping 0.2% [Kantar Worldpanel 52w/e 13 June]. So is the writing finally on the wall for the old packaging stalwart?
If you look at the focus of much of the recent ambient NPD, it would be easy to conclude that yes, the can is in trouble. In January, Sainsbury's tapped into consumers' environmental concerns by putting its Basics chopped tomatoes in cartons, claiming it would save 500 tonnes of packaging waste a year. Two months ago, John West went upmarket with the launch of two tuna sandwich fillings in pouches, one with mayonnaise & sweetcorn and the other with a spicy Indian dressing. Meanwhile, ready-meal brand Look What We Found is about to launch five new premium meals in pouches and Princes has opted for pots for the launch of an ambient fruit product this autumn (see box, p58).
With Look What We Found reporting 112.3% year-on-year volume growth [Symphony IRI 52w/e 10 July], compared with a 14.5% volume decline for the ambient meal category overall, alternative formats look pretty attractive.
Even in troubled economic times, consumers want value for money rather than cheap, it seems, and they associate cans with the latter. The upward pressure of aluminium cost increases on retail prices hasn't helped closing as it has the price gap between the can and the pouch, the pot and the carton. Canned tomatoes, sweetcorn and kidney beans have seen some of the greatest price increases, according to SymphonyIRI. "Kidney bean value sales are up 18% but volume is only up 0.1%," says insight director Richard Baker.
Steve Thomas, chairman of industry body Canned Foods UK, adds: "Basic commodities such as steel cans have been going up steeply and it has been very difficult to minimise the effects of these global price increases. Another factor is that a third of the market including most canned fruit, fish and tomatoes are imported, so there are an awful lot of products subject to the exchange rate, which has been variable to say the least."
In short, those who are being forced to cut back on their chilled spend have plenty of cheaper alternatives in the ambient aisles to chose from, alternatives that offer many of the same premium cues as chilled. These formats also have greater appeal with young consumers. That was the main reason for Princes' first foray into pots, says marketing director Ruth Simpson. "Our research shows that, while canned fruit tends to attract older consumers, fruit pots have the potential to bring young families into the market," she says.
Princes will no doubt have noted that sales of leading brand Del Monte have fallen 24.2% year-on-year [SymphonyIRI] a decline the company is keen to reverse. "At the end of last year we restructured our UK business and put a team in place dedicated to managing its development," says Del Monte national account controller Tony Gill. "As a result, our core business is returning to growth."
The company is planning premium NPD and, yes, it's also considering alternative packaging formats but it is not turning its back on cans. When it comes to innovation, the contents are always as much of a focus as the format, says Gill.
"We will be looking at new taste combinations with premium positioning, and also looking at products with added health benefits," he says. "The market needs invigorating and Del Monte is best positioned to do that."
Although this is undoubtedly true of the canned category, it's important to put the latest figures into context. Last year, value sales were up 11.7% but volume was down 4.3% so this year's 0.2% slip suggests the decline is slowing and that the category could be poised for a return to growth.
Thomas sees the static nature of the market as no bad thing. "I think it is actually good, because consumers still want canned food and the industry is trying very hard to minimise price increases," he says.
It also suggests consumer confidence is returning, says Heinz Beanz marketing director John Alderman. "If you go back 12 months, confidence was a lot lower than it is now," he says. "One hypothesis is that, as consumer confidence has improved, it has meant that people have been less frugal."
Simpson adds that, even in a strong market, big volume increases would be unlikely given the level of household penetration. "More than 70% of shoppers buy into the canned fish category and buy it regularly," she says. At £460.2m, canned fish is the biggest sector of the market by value, but volume sales have risen just 0.7% [Kantar].
High household penetration is not the only challenge the canned fish sector has had to face, says Simpson. Poor salmon catches have meant poor availability and higher prices.
Wily manufacturers have turned such upward pressures to their advantage, however, delivering NPD they hope justifies the higher price tag. John West, the biggest canned fish brand, has seen its value sales rise 15.6%, but volumes decline 0.6% [SymphonyIRI] in the wake of the introduction of No Drain tuna in 2009. The format, which sells for about an 8% premium over standard tuna, has been so successful the company is rolling the technology out to four more SKUs. "No Drain is now worth more than £25m in retail sales and 12.5% of UK households have bought the product since its launch last February," says marketing director Jeremy Coles.
Canned pies have also been getting in on the NPD act. Sales have risen 12.3% by value and 11.4% by volume [Kantar] over the past year and it's no c0incidence that Fray Bentos added a Just Steak variant 18 months ago, while Princes introduced a crispier pastry top when it relaunched last year.
Meanwhile, a product traditionally sold in jars and cartons is about to get its debut in canned. All About Foods is capitalising on the popularity of passata by launching a Pizza Express branded version next month. The less premium format should bode well given the strong growth posted by the existing formats.
"This is growing nearly 8% year-on-year," says Napolina marketing manager Dean Towey. "In the past, people didn't really know what it was for, but we've got chefs using it on TV and, as it is name-checked, people are beginning to seek it out. In Italy, passata is bigger than canned tomatoes so there is real scope to grow it. In the UK, it has only 17% penetration, compared with total tomatoes at 79%."
Of course, it takes more than NPD to drive sales growth. Marketing activity and promotions have played an important role too. Green Giant claims that being the only canned veg brand to advertise on TV has helped it increase value by 7.5% and volume by 11.3% [SymphonyIRI] in a sub-category that has fallen 4.5% in volume [Kantar]. The brand has just signed up to a three-month sponsorship of Australian soap Neighbours on Channel Five and Fiver.
And heavy promotional activity has boosted volumes of tinned tomatoes by 4.3% and baked beans by 1.7%. Thanks to the fact 74.6% of its cans are sold on deal, according to Nielsen, value sales of Premier-owned Branston Baked Beans have leapt 17.4% to £33.3m on volume growth of 19.2% [SymphonyIRI]. Conversely, a slightly more modest 45.4% of Heinz Beanz were sold on promotion, and though value sales are up 5.9%, volumes have slipped 0.2%.
Heinz's Alderman insists Branston has been taking share from own-label rather than his company's products own-label sales have fallen 6.1% in value to £79.4m and 10.4% in volume [SymphonyIRI]. He adds that Heinz has no plans to up its promotional levels and that the fridge pack will bring new consumers to the ambient aisle. But the proliferation of new formats won't turn existing consumers off cans.
"The can has got a lot of life left in it because it is such a brilliant container," he says. "New formats can co-exist with the can because they each offer a different benefit."
Its a view echoed by John West's Coles. "New formats are about extending the category use," he says. "The can is definitely here to stay."
Focus On Canned Goods
It's the 200th anniversary of the invention of the can. And the format is facing more competition than ever.
The popularity of microwaving food and concerns over oxidisation of opened cans in the fridge has prompted an increasing number of brands to launch alternative ambient formats.
Heinz is the latest to unveil a new challenger its 1kg Fridge Pack of baked beans, which hits shelves this month. The manufacturer has forecast first-year sales of more than of £10m for the format and predicts it will be as big as its other non-can format, Snap Pots, which has notched up sales of £35m since launching three years ago.
It is hoping that, priced at 16% more than the equivalent two and a half cans, the Fridge Pack will also inject some genuine value to the ambient category something canned foods are struggling t0 do. Sales might be up 4% in value, according to the latest data from Kantar Worldpanel [52w/e 13 June], but most of this is price-rise related and ominously, volume sales have stalled, dipping 0.2% [Kantar Worldpanel 52w/e 13 June]. So is the writing finally on the wall for the old packaging stalwart?
If you look at the focus of much of the recent ambient NPD, it would be easy to conclude that yes, the can is in trouble. In January, Sainsbury's tapped into consumers' environmental concerns by putting its Basics chopped tomatoes in cartons, claiming it would save 500 tonnes of packaging waste a year. Two months ago, John West went upmarket with the launch of two tuna sandwich fillings in pouches, one with mayonnaise & sweetcorn and the other with a spicy Indian dressing. Meanwhile, ready-meal brand Look What We Found is about to launch five new premium meals in pouches and Princes has opted for pots for the launch of an ambient fruit product this autumn (see box, p58).
With Look What We Found reporting 112.3% year-on-year volume growth [Symphony IRI 52w/e 10 July], compared with a 14.5% volume decline for the ambient meal category overall, alternative formats look pretty attractive.
Even in troubled economic times, consumers want value for money rather than cheap, it seems, and they associate cans with the latter. The upward pressure of aluminium cost increases on retail prices hasn't helped closing as it has the price gap between the can and the pouch, the pot and the carton. Canned tomatoes, sweetcorn and kidney beans have seen some of the greatest price increases, according to SymphonyIRI. "Kidney bean value sales are up 18% but volume is only up 0.1%," says insight director Richard Baker.
Steve Thomas, chairman of industry body Canned Foods UK, adds: "Basic commodities such as steel cans have been going up steeply and it has been very difficult to minimise the effects of these global price increases. Another factor is that a third of the market including most canned fruit, fish and tomatoes are imported, so there are an awful lot of products subject to the exchange rate, which has been variable to say the least."
In short, those who are being forced to cut back on their chilled spend have plenty of cheaper alternatives in the ambient aisles to chose from, alternatives that offer many of the same premium cues as chilled. These formats also have greater appeal with young consumers. That was the main reason for Princes' first foray into pots, says marketing director Ruth Simpson. "Our research shows that, while canned fruit tends to attract older consumers, fruit pots have the potential to bring young families into the market," she says.
Princes will no doubt have noted that sales of leading brand Del Monte have fallen 24.2% year-on-year [SymphonyIRI] a decline the company is keen to reverse. "At the end of last year we restructured our UK business and put a team in place dedicated to managing its development," says Del Monte national account controller Tony Gill. "As a result, our core business is returning to growth."
The company is planning premium NPD and, yes, it's also considering alternative packaging formats but it is not turning its back on cans. When it comes to innovation, the contents are always as much of a focus as the format, says Gill.
"We will be looking at new taste combinations with premium positioning, and also looking at products with added health benefits," he says. "The market needs invigorating and Del Monte is best positioned to do that."
Although this is undoubtedly true of the canned category, it's important to put the latest figures into context. Last year, value sales were up 11.7% but volume was down 4.3% so this year's 0.2% slip suggests the decline is slowing and that the category could be poised for a return to growth.
Thomas sees the static nature of the market as no bad thing. "I think it is actually good, because consumers still want canned food and the industry is trying very hard to minimise price increases," he says.
It also suggests consumer confidence is returning, says Heinz Beanz marketing director John Alderman. "If you go back 12 months, confidence was a lot lower than it is now," he says. "One hypothesis is that, as consumer confidence has improved, it has meant that people have been less frugal."
Simpson adds that, even in a strong market, big volume increases would be unlikely given the level of household penetration. "More than 70% of shoppers buy into the canned fish category and buy it regularly," she says. At £460.2m, canned fish is the biggest sector of the market by value, but volume sales have risen just 0.7% [Kantar].
High household penetration is not the only challenge the canned fish sector has had to face, says Simpson. Poor salmon catches have meant poor availability and higher prices.
Wily manufacturers have turned such upward pressures to their advantage, however, delivering NPD they hope justifies the higher price tag. John West, the biggest canned fish brand, has seen its value sales rise 15.6%, but volumes decline 0.6% [SymphonyIRI] in the wake of the introduction of No Drain tuna in 2009. The format, which sells for about an 8% premium over standard tuna, has been so successful the company is rolling the technology out to four more SKUs. "No Drain is now worth more than £25m in retail sales and 12.5% of UK households have bought the product since its launch last February," says marketing director Jeremy Coles.
Canned pies have also been getting in on the NPD act. Sales have risen 12.3% by value and 11.4% by volume [Kantar] over the past year and it's no c0incidence that Fray Bentos added a Just Steak variant 18 months ago, while Princes introduced a crispier pastry top when it relaunched last year.
Meanwhile, a product traditionally sold in jars and cartons is about to get its debut in canned. All About Foods is capitalising on the popularity of passata by launching a Pizza Express branded version next month. The less premium format should bode well given the strong growth posted by the existing formats.
"This is growing nearly 8% year-on-year," says Napolina marketing manager Dean Towey. "In the past, people didn't really know what it was for, but we've got chefs using it on TV and, as it is name-checked, people are beginning to seek it out. In Italy, passata is bigger than canned tomatoes so there is real scope to grow it. In the UK, it has only 17% penetration, compared with total tomatoes at 79%."
Of course, it takes more than NPD to drive sales growth. Marketing activity and promotions have played an important role too. Green Giant claims that being the only canned veg brand to advertise on TV has helped it increase value by 7.5% and volume by 11.3% [SymphonyIRI] in a sub-category that has fallen 4.5% in volume [Kantar]. The brand has just signed up to a three-month sponsorship of Australian soap Neighbours on Channel Five and Fiver.
And heavy promotional activity has boosted volumes of tinned tomatoes by 4.3% and baked beans by 1.7%. Thanks to the fact 74.6% of its cans are sold on deal, according to Nielsen, value sales of Premier-owned Branston Baked Beans have leapt 17.4% to £33.3m on volume growth of 19.2% [SymphonyIRI]. Conversely, a slightly more modest 45.4% of Heinz Beanz were sold on promotion, and though value sales are up 5.9%, volumes have slipped 0.2%.
Heinz's Alderman insists Branston has been taking share from own-label rather than his company's products own-label sales have fallen 6.1% in value to £79.4m and 10.4% in volume [SymphonyIRI]. He adds that Heinz has no plans to up its promotional levels and that the fridge pack will bring new consumers to the ambient aisle. But the proliferation of new formats won't turn existing consumers off cans.
"The can has got a lot of life left in it because it is such a brilliant container," he says. "New formats can co-exist with the can because they each offer a different benefit."
Its a view echoed by John West's Coles. "New formats are about extending the category use," he says. "The can is definitely here to stay."
Focus On Canned Goods
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