Canned food may be one of grocery’s elder statesmen with a predominantly mature consumer base, but better quality products and a more contemporary image are starting to rejuvenate this once flagging category.
Recent performance shows the £1.8bn category still has plenty of life left in it, with growth at a respectable 4.5% [TNS 52 w/e February 29 2004]. It may lack some of the glamour of fresh and chilled, but it is still a significant slice of a grocer’s business.
In canned fish - the biggest sector in the category - Princes Foods, with nearly a quarter share, is boasting robust value growth of 8.8%.
“This is because of the combination of promotional strategy and our entry into the value-added tuna market with our Slimming World product,” explains Neil Brownbill, marketing director of Princes International trading group.
The third largest sector, baked beans, turned in a lower than expected performance, possibly due to last year’s hot summer, growing at just less than 3%.
Meanwhile, canned fruit, at 6.3%, has enjoyed a resurgence in interest. This is due in part, says Del Monte, to the demand for exotics - a sector that is growing at 11% year-on-year.
But the prize for the best performing category goes to canned tomatoes and passata. According to TNS, value sales were up 24.8% year-on-year. This is particularly impressive considering last year’s supply shortage, which raised prices and reduced promotions.
But according to Brownbill, this has not damaged the sector. “We did an analysis to see if consumers, as a result of the price increases, were leaving the market, but tomatoes still have 80% penetration.”
In fact, it appears the sector has benefited, since fewer shoppers are stocking up when on promotion.
Two of the most traditional areas - canned hot meat and canned cold meat - are also in growth, up 10.3% and 6.2% respectively, because of manufacturer initiatives to differentiate the market, improve quality and focus on convenience.
For instance, Princes has extended its range of corned beef. It now has lean, spicy, finest and standard variants to
attract new and younger consumers. The company’s launch into canned pies last year has also reinvigorated that sector, which grew by 20% from £24.9m to £30m. Brownbill says: “Princes’ move into the category has stimulated activity from Campbell’s and we’ve also had activity of our own.”
Asda marketing manager Helen Young says Princes’ entrance has spiced up the sector. “Fray Bentos has dominated the market for so long, while Campbell’s has invested heavily above the line. Princes has a great quality product, however, so it seems likely it will challenge the status quo.”
Promotions remain key, but while they drive volume, manufacturers are looking for more added value. For example, this July in Sainsbury, Napolina canned tomatoes will be promoted in conjunction with
Napolina oil in an effort to increase penetration in the brand’s oil range.
Ben Pearman, UK marketing manager at Heinz, says promotions should embrace more than just price. “Getting the right balance of activity across price reductions, theme promotions and tailor-made activity is key,” he says.