The Grocer’s 2017 Top Products Survey, THE definitive guide to the current state of the UK’s grocery industry

Don’t be fooled by sports nutrition’s 1.1% dip in average price. Costs are spiralling for market players as dairy prices soar. “Whey prices have seen double-digit rises,” says Chay Watkins, marketing director at the sector’s fourth biggest brand Sci-Mx. “As the core commodity for this industry, this has affected suppliers, retailers and the end consumer.” 

Of course, it’s not just tightening dairy supplies squeezing bottom lines. “The impact of Brexit on currency has been a challenge,” says Grenade chief marketing officer Juliet Barratt. “We’ve largely shielded customers from rising costs by absorbing them internally, through buying forward currency contracts and great supplier relations.”

But hedging currencies and great supplier relationships will only go so far, surely. As retail prices soar in nearly every other grocery sector, how come they’re down here?

The answer lies in the fact volumes are measured here in units, not weight. Packs of protein powder are getting smaller, ostensibly because the high price per unit (an average of £13.55 over the past year) is seen as a barrier to purchase for newcomers to the category. This, combined with a 9.3% fall in unit sales of powders, is bringing average price per unit down, says Nielsen client manager Jarrah Rubinstein.

But there’s a more significant factor. “The key contributing factor to the lower prices is the increase in bar sales,” says Rubinstein. “This is now the biggest format and they are priced lower than other formats. On the other hand, there has been a drop in powder sales, which makes up 17.9% of sports nutrition and is the most expensive sector.”

This tallies with Watkins’ explanation for Sci-Mx’s 4.5% decline on volumes up 3.4%. “There have been some recent challenges for nutrition brands within the multiples, and distribution losses to free up space for innovation within snacking, which is full steam ahead,” he says. “Sci-Mx has suffered with a slight dip in distribution of larger powder formats, and as a result sales are in decline.”

Market leader Maxinutrition has suffered even more, losing nearly a fifth of its value (£3.4m) and volume as it has struggled to keep up with the pace of change in the sector. Commentators suggest Maxi’s technical, at times abstruse, language (products include Gen-P protein bars and Cyclone and Promax powders) has discouraged more mainstream consumers from buying into the brand, which owner GSK is now looking to sell off.

Head of sport at Holland & Barrett Nick Janda says Maxinutrition’s problems are due to an identity crisis. “Maxi has had a number of reformulations of its product - in my five years here they’ve had three reiterations,” he says. “They’ve tried to drive the market forward, but they haven’t always got it right.”

Sci-Mx and Maxi have taken a knock, but the sector as a whole is looking fit as a fiddle, with sales passing £100m in the past year. Rubinstein says retailers are filling the space left by delisted powders with NPD. “Retailers have mainly increased or reallocated space between formats, rather than reducing shelf space,” he says. “Trek has the highest gains in space with a 28% increase in distribution and £3.8m additional sales versus last year.”

Indeed, the brand has powered into the number two slot of Nielsen’s bestsellers list. Marina Love, marketing director at brand owner Natural Balance Foods, says the brand’s growth is proof that sports nutrition is no longer the preserve of bodybuilders and athletes. The brand has never been in protein powder; its growth is down to its growing range of flapjacks, protein bars and chunks.

Sports nutrition

There’s a gulf forming in sports nutrition. On one side are the scientific, butch brands whose products sound more like weapons than food or drink (see Grenade Carb Killa, Sci-Mx Rippedcore or Maximuscle Cyclone), on the other are more mainstream offerings such as Bounce, Trek and Snickers Protein. With retailers dedicating more space to the category, which products will win the most listings?

“Consumers are looking for products that appeal to their increasingly active lifestyles,” says Love. “We see a rapidly growing subcategory developing within the market and we refer to this as ‘active lifestyle energy’. These products are appealing to consumers who are on their fitness journey towards being more active and leading a healthier lifestyle. The same person who goes on an evening run can be the same person who needs a pick-me up for their 3pm slump at their desk, or when they need an energy boost on the go.”

More proof of how on-the-go formats are driving growth can be seen in Grenade’s triple-digit growth, worth a market-leading £6.5m. “With the consumer at the heart of all-new product creation, product range has been on trend and our retail partners have trusted us to offer range and zone increases across their estates,” says Barratt.

It’s paid off. Grenade’s Carb Killa Shake has been the most successful sports nutrition launch of the year, accounting for nearly a quarter of the sector’s £18.8m growth and 13% of all NPD value. It’s also significant that more than three quarters of the NPD’s sales are through impulse retailers. “Convenience and grocery channels are a fantastic way to bring in new consumers to Grenade and satisfy our existing loyal customer base with their on-the-go needs,” adds Barratt.

As we’ve seen with Trek, some of the most successful brands in this market are less explicit in their associations with sport. For example, the April launch of Mars Protein powder (our Top Launch) was aimed not at hardcore gym nuts but “everyday lifestyle users” according to Mars. The manufacturer said that 24% of UK consumers had eaten a sports nutrition product in the first three months of the year.

Bounce, which has seen sales surge by 66.8% thanks to growing distribution in impulse channels, doesn’t even describe itself as a sports nutrition player but a healthy snack brand. Its lines are marketed as being high in protein, gluten-free and vegetarian.

Many expect the vegetarian and vegan trends that are sweeping the wider category to make a bigger impact on sports nutrition. “Vegetarianism and veganism is the fastest growing trend in the western world, as well as flexitarianism,” says Janda. “As we reduce the amount of meat we eat, these things lead to more and more plant protein.”

Indeed, Natural Balance’s Love points to a Mintel report that found between 2012 and 2016 there was a 25% increase in vegetarian and 257% increase in vegan claims in global food and drink launches. “This reflects consumer aspirations for healthier lifestyles, less processed foods, and fewer meals containing animal proteins,” she adds. “When it comes to health, people are willing to pay a premium on it, even with Brexit driving up inflation.”

Janda agrees. “Any uncertainty of currency does increase the cost, but it increases it in lots of sectors,” he says. “It’s not something only confined to sports nutrition, and people are feeling the pinch everywhere. But what often happens in times like this is consumers tend to drop luxury items. However, it is possible that, in some families, sports nutrition products are seen as a way of maintaining health. People can’t afford to be ill and are starting to look after their health even more and are continuing to buy into the industry.”

Which begs the question: if retail prices continue to rise as a result of economic factors, will sports nutrition be ditched as discretionary luxury? Or do consumers now see it as something they cannot live without?


Mars Whey

Mars Protein powder by Mars

One of grocery’s biggest brands joining in on one of the biggest trends in last few years - whey protein - may have surprised a few in the industry. But the addition of the post-workout product to Mars’ chocolate drinks and treats protein range has proved to be a masterstroke for the group. The results have been astounding as the “unmistakable taste” of Mars caramel and chocolate helped to swell value sales. The NPD also marked the first time a whey protein product has gone truly mainstream.

The Grocer Top Products Survey 2017: Up!