Only (baked) beans buck flat sales in canned

You could be forgiven for thinking tough economic times would provide the ideal platform for canned food manufacturers to grow sales.

After all, long-life ambient foods that provide quick and convenient meals at an affordable price would seem to tick all the boxes we are told consumers are looking for. And yet volume sales are down across many areas - fruit (-5.7%), veg (-1.1%), meat (-2.7%) and fish (-2%) all sold in lower volumes than in 2007, with only baked beans (2% growth) bucking the trend.

The answer might lie in the resurgence of scratch cooking, fuelled by celebrity chefs urging the public to make nutritious meals using natural ingredients. However, that hasn't stopped canned food manufacturers remaining upbeat. They plan to hit back with a Switch 2 Canned Foods Campaign this winter by Canned Food UK, fronted by celebrity chef James Martin - that hopes to invigorate the category by offering consumers budget recipe ideas for price-sensitive times.

That could tap into the popularity of traditional favourites, sales of which are still doing well, according to Asda buying manager Harvey Lees. "Sales are driven by old favourites such as baked beans, tomatoes and tuna," he said.

Unlike the rest of the category, beans continue to be a staple food loved by children, students and adults alike. The sector recorded 2% volume growth, with value sales up 9.2% to £316m. Own label holds a 26% share of the market, but its share declined as brands spent big on innovation and ads.

"Ideas such as the hidden veg, bean balti and other new developments that are quick and convenient are just what consumers are looking for," says Steve Thomas, chairman of Canned Food UK.

There's been no change at the top of the branded market, with iconic baked bean specialist Heinz pulling even further away from distant second-placed competitor Branston on the back of its Snap Pot packs, launched last October. Heinz also took the opportunity this year to update the look of its cans, taking the controversial decision to drop the word 'Baked'. Less high-profile has been the fall-off of Heinz WeightWatchers, whose 10.8% sales drop indicates consumers are losing interest in diet products when it comes to baked beans.

Canned fruit continues its decline, suffering more than ever this year from retailers' heavy promotional activity on fresh produce and consumers' taste for pre-prepared desserts. The sector overall has fallen 5.7% in volume and 6.7% in value to £103.2m, representing a major fall from favour for a category worth £126m only two years ago.

With own label falling even further, down 8.5%, market leader Del Monte pulled further away from its competitors, with a 6.9% increase to give it sales of £24.5m.

But, perhaps unsurprisingly, the US fruit giant announced in September that it was expanding its repertoire with its first foray into the frozen category. Second-placed Princes and John West, at third, lost 24.6% and 23.4% of sales respectively compared with 2007.

Canned vegetables have fared little better than fruit this year, with sales volumes down 1.1%, but the market value at least rose by 6.7% to £407.8m as a result of higher pricing.

Napolina scored a notable coup this year by surpassing rival Green Giant to secure top spot in the category. It did it on the back of a 27.2% sales surge - compared with Green Giant's 8.8% increase - which took its turnover for the year to £46.8m.

Green Giant, like Del Monte, also diversified its offer this year by moving into soups. Having only produced canned and frozen veg throughout its 83-year history, it was striking that General Mills chose a time of dwindling consumer interest in canned produce generally to expand its offer.

One of the biggest winners of the year is unquestionably Princes, which has massively closed the gap on rival John West at the top of the canned food sector, despite being delisted by Asda last year.

Top Launch - Heinz snack pots (HJ Heinz) 
Baked beans: the front line in the food price war, the

footsoldiers that supermarkets have always sent over the top and sacrificed margins on to woo shoppers. But over the past year, a new entrant has taken the category by storm. Heinz Snap Pot Packs offer the ultimate in convenience - single-serve 200g pots that can be put into the microwave and heated in just a minute. Sales are expected to hit £18m in its first year.
Princes' sales rose 29.7% to £127.3m, while John West could only push up its sales by 3.9% to £134.5m.

The situation represents a remarkable turnaround for Princes, which was a distant second a year ago. It has done it on the back of new product launches over the past 18 months, including canned mackerel rich in omega-3, a new premium range, and much-heralded fish in pouches.

John West argued that its rival had been running extensive promotions and said that its own volume sales were often ahead of Princes.

Princes' good year in fish was echoed in meat, as it consolidated its top spot in the canned meat division. However, it has certainly not had it all its own way in a market with virtually stagnant value sales and dropping volumes. And its competitors Fray Bentos and Ye Olde Oak recorded 12.4% and 15.2% sales increases respectively, although sales of the two brands combined still fall short of Princes at the top of the market.

Heinz continues its stranglehold over the canned pasta category, where it is the only brand of any significant size. With almost three-quarters of the sector, own label provides the only meaningful competition for the market leader.

Heinz, which owns three of the top five products in the category, recorded a 3.9% value increase for its leading brand, taking it to £69.3m in sales.
View The Grocer's definitive Top Products 2008 survey