Canned goods 2022: Baked beans fall victim to price spikes

Heinz Beanz became a poster child for inflation’s effects this year. The brand was front and centre in a summer dispute between Kraft Heinz and Tesco over price rises.

As the titans failed to reach an agreement on cost prices, gaps on shelves started to emerge across the Heinz portfolio. Beanz 4x415g, Beanz No Added Sugar 4x415g and Beanz Snap Pots 200g were among the SKUs to temporarily vanish from Tesco shelves.

Matters were resolved within a couple of weeks, and Tesco appeared the victor. It pledged no price rises for key lines – including that core Beanz four-pack.

Meanwhile, a spokesman for Heinz pointed to the rise in commodity and production costs. “We always look at how we can provide value through price, size and packs,” he said in late June.

No doubt that played a part behind the £4.4m drop in sales for Heinz this year, while main rival Branston grew £179k. But it’s not been easy for Branston, either.

Having failed to grow value in Tesco during Heinz’s brief absence, it struggled in the autumn to supply Baked Beans. This was due to the war in Ukraine limiting availability of a particular maize starch, the brand explained. While there were solutions in the form of alternate sources and starches, it couldn’t limit price rises. Its beans are now 12% more expensive on average in grocery.

Heinz Beanz finished our data period rising even faster in price. It’s up 13.7%. Which suggests even a backlash from the UK’s biggest supermarket can’t halt the inevitable rise in canned food prices.

 

Rising prices aren’t just a hot topic in baked beans. While canned food remains one of the most wallet-friendly areas of grocery, the sector has been as vulnerable as everyone else to the economic squeeze.

“The increased cost of material, energy and logistics has driven cost inflation to the category,” confirms Dhiresh Hirani, UK country manager at Mutti.

For its part, the fast-growing Italian brand has managed to keep the price of its tinned tomatoes flat, as value and volume sales soared 70.3%.

Hirani credits this success to cash-conscious Brits “looking for inspiration from brands, like Mutti, that can help them to recreate restaurant-quality meals at home”.

Mutti’s rivals in the canned vegetables market haven’t been so lucky. Number one brand Napolina, for instance, has shed £12m and sold the equivalent of 25.1 million fewer standard cans of tomatoes. It’s the sort of  decline that last month sparked Napolina to launch a £2m push, in an effort to recoup value across its wider portfolio.

With an average price rise of 7.7%, the brand’s tinned tomatoes have undoubtedly been hurt by the downtrading in the wider sector. Branded veg lines have declined 16.7% in the wake of the pandemic – while own label lines have fallen less sharply at 10.2%.

“There is a general move to own label products,” concedes brand marketing director Jeremy Gibson at Napolina owner Princes Food. “But we still see many opting for their favourite brands where the product price is still within their budget.”

Other suppliers are similarly pragmatic about the state of canned food – in which value has fallen a total of £82.6m across the six sectors in this report.

Take Del Monte, down £6.7m as units fell 16.9%. Senior commercial director Martin Tilney explains: “It would be unprecedented for the category to maintain figures from the pandemic years.”

John West international marketing director Jon Burton is equally unfazed by its £21.9m loss. “Like many grocery brands we’ve seen an increasingly competitive retailer environment over the past 12 months,” he says.

Positive outlook

Despite the challenging environment facing canned food brands, there are plenty of reasons to be optimistic about the coming year, insists Princes’ Gibson.

“The category resonates with key consumer trends and demands, such as recyclability, quality, convenience, reducing waste and value for money,” he says.

He points to a September poll commissioned by Princes, which hinted at an imminent renaissance for tinned food. It found a third of shoppers intended to buy more cans over the next year as recession looms, citing factors including value for money, longer shelf life,  and versatility in scratch cooking.

And, as lockdowns taught us, such qualities are major selling points in times of turmoil and uncertainty.