Fat can still be healthy in the eyes of the consumer. That is one of the clear messages coming through in The Grocer's Top Products Survey 2007. Increasingly informed about health and diet, and prepared to spend more money on our groceries - with the sales up by 5.2% to £118bn - the 72 category survey shows diet and processed foods being given the boot, while naturally wholesome products come to the fore - even if they are higher in fat.
In the most stark signal yet of this move, Cheddar cheese brand Cathedral City and premium butter brand Lurpak relegated traditional household favourites Dairylea and Flora to second places to take leadership of their respective categories for the first time. Lurpak added £17.3m with sales of £189.9m and Cathedral City's top line was bolstered by a staggering £29.3m to £138m, thanks to packaging innovation and a 30% lighter variant.
"Consumers are not willing to sacrifice on taste [any more], and want natural products that are created by cows, not chemists," says Lurpak brand manager Jessica Hardcastle.
This trend has been replicated across countless categories. "Health has been one of the headline themes this year as a major factor in shopper buying decisions," says Nielsen UK MD Justin Sargent. "This year's Top Products Survey is testament to this, with healthy or healthier-for-you lines consistently performing well across many categories. Innocent Smoothies is one of the fastest-growing products in the marketplace and Walkers Baked has been a huge new product launch - both great examples of products that tick the healthy box for the consumer."
In the pure juice and juice drinks sub-sector, itself one of the top-performing categories, up 9.4%, Innocent grew by 60.6% adding a category-busting £50m to its sales.The smoothie brand, which is also expanding into Europe, replicated last year's success - when it also added £50m, up 168% - the latest figures suggesting that its trailblazing is far from tailing off, despite the deluge of copycat smoothies hitting shelves.
Danone's functional yoghurt brand Activia is another gaining momentum, increasing sales by almost 30% in the dairy yoghurts and desserts category, adding £27m this year.
Health and hearty wholesomeness were by no means the only trends in food and drink, however. Another strong performance was in the sports and energy drink market, with Red Bull once again leading the hyped-up pack. It is 10 years since the Austrian brand began its international roll out, but it clearly still has wings. With a 20.7% sales uplift to £163.8m, it trails market leader Lucozade, which also put in a stellar performance this year with sales up 11.6%, but Red Bull is more than holding its own in a market dominated by international giants GlaxoSmithKline and Coca-Cola.
Coca-Cola is on the case, however. Its Relentless energy drink, launched last year, grew 884.8%, with sales up from £1.2m to £12.2m, with the increasingly flexible Atlanta-based soft drinks giant downplaying the parent company's roots in its marketing of the new brand.
Perhaps this is because Coca-Cola itself had a mixed year, with Coke down 0.3%, Diet Coke down 6.5% but Coke Zero up a massive 137%. Despite only a slight increase of 0.6% in the carbonates sector, Coke is still by far and away the biggest food and drink brand in the Top Products Survey, with sales of £940.1m.
Milk and soya milk has also been added this year to create a sub-sector within the dairy drinks category for the first time, reflecting the emergence of strong brands in this previously own label dominated market. And it was another triumph for Arla Foods, with sales of Cravendale shooting up 28.5% in the past year to £93m, in a market itself up 6.7%. This was despite failing to impress with its Hint Of... adult milk drink, which it ditched recently, replacing it with new brand Half Pint.
In the confectionery market, concerns with health have resulted in a strong increase in sales of dark chocolate, while the reformulation of Rowntrees gums and jellies using real fruit juice has been rewarded with a £10m (18.3%) increase in sales.
But proving we Brits still value a little bit of what you fancy, Galaxy put in a storming performance, with sales up £26m (16.4%) to £181m. With static sales, Cadbury's Dairy Milk still appears to be suffering the after-effects of its well-known salmonella incident, but is still more than twice the size at £370.3m, and the latest reports suggest that a £6.5m marketing campaign featuring a drum-playing gorilla has helped it to turn the corner.
The chocolate market can also thank this year's pitiful summer for turning a 1% sales decline in 2006 into 5.2% growth across the total £2.93bn chocolate category this year, including a 12.3% boost for own label.
The summer weather also appeared to boost sales of hot beverages, cold and flu remedies, soups and cooking sauces (see p53). On the other hand, it spelt near disaster for sales of handheld ice-creams (down 9.3%) and bottled water (down 3.4%), with own label bottled water down 8.1%.
The weather also contributed to soaring wheat prices this year. Not that Warburtons seemed to notice. The Bolton-based brand added £64.1m of sales, a 15.7% boost that takes its retail sales value to £472m. Its national rollout continues apace, aided by a novel multi-million pound ad campaign that plays on the brand's family values as well as its premium positioning.
While some of this growth can be attributed to increased prices in-store, as the plant bread market grew 5.7% in value, Warburtons was the only big brand in the category that appeared to escape the twin pincer movement from higher wheat prices combined with pressures from the multiples, with Hovis sales down 1.2% for Premier and ABF taking a 1.5% sales hit on Kingsmill.
The poor weather - combined with the absence of a major summer sports tournament - also had an impact on beer and cider sales. Even C&C Group, the manufacturers of Magners Cider, were forced to put out a profit warning after its key earnings period in June and July was a washout.
However, these things are relative: the nation's appetite for the brand that brought us cider over ice could not really be dampened, gaining £76.1m in sales, an impressive 126.3% growth. It also helped to grow the overall cider and perry market, which was the fastest-growing category, up 23.2%
It no longer has the market to itself, however. S&N's Bulmers Original came from nowhere, launched in May 2006 to record sales of £23.3m.
Sales of lager were flat and ale sales fell. Carlsberg added some fizz, with 17.3% growth, but it was at the expense of margin, as heavy promotions become de rigueur in the heavily discounted off-trade.
A special mention must also go to Glen Catrine's value vodka brand Glen's. It added £26.9m (up 30.7% to £114.6m), overshadowing the £10.7m gained by spirits market leader Smirnoff Red Label (up 5.4% to £209.2m), and proving that price still drives the market.
Cigarettes, too, are increasingly price-driven. New entrant Sterling Superkings illustrates the growth potential at the bottom end of the category, adding £46m to take sales to £138.4m. However, it is not all about price. Benson & Hedges King Size Silver was helped by a novel new slide pack format, adding £74.5m this year, increasing its sales by 32.5% to £303.7m.
No tobacco brands can touch Lambert & Butler Kings, however. It added a whopping £72.1m, or 5.5%, to its sales and easily tops the list of the UK's top products at £1.38bn. The value of the cigarette category was also up 4.4% overall - impressive considering this year's smoking ban. However, the 2% volume decline in the £9.75bn cigarette category equates to 981m fewer cigarettes being smoked in 2007 - a clear sign that the government's new policies are having an impact, however modest.
One of the fastest-growing categories was rice. And once again this can be attributed to its healthy image, with innovation enabling it also to tick the convenience box. So, while sales of Pot Noodle continued their decline, new ranges of microwaveable rice that delivered 'restaurant quality' saw sales grow by 10.9%. And category leader Uncle Ben's grew its top line by £27.9m, up 33.4%, to take sales to £111.4m.
Unilever had what can best be described as a mixed year. As well as Flora and Pot Noodles, ice cream sales were hit by the weather, though its premium tubbed ice creams, such as Ben & Jerry's, performed strongly. In the laundry market, Persil powder also lost its crown to Bold powder, after sales slipped 6.1%. It cleaned up, however, with Persil Gel Tablets, almost doubling its value from £14.2m to £28.2m - the biggest gains in the category. However, as Persil Tablets fell 42.5% its overall sales were static, suggesting that innovation is sometimes simply robbing Peter to pay Paul.
Birds Eye frozen ready meals were also hit badly. In a market itself declining by 5.4%, the private equity-owned frozen food giant will not have enjoyed the £22m, or 21% fall, in sales. However, the frozen food market was boosted by strong performances from potatoes, aided by McCain's exuberant advertising and strong health-led sales story.
Tango was another big loser this year, with sales slumping 27.1% , a fall of £10m. But like so many other players, Tango parent Britvic is turning its attention to more healthy options, including juices and its kiddie water Fruit Shoot H20, up 120%.
Walkers Potato Heads appear to be disappearing even faster. After a meteoric rise, following their launch in early 2005, sales fell 49% to £13.4m, with a fire at its Leicester plant in July halting production "until further notice".
However, Walkers' new Baked range made great progress, with sales up to £37m barely a year after their launch. Kettle Chips also had another fantastic year, with the premium brand increasing sales 20.7% to £55m, while the bagged snacks category overall was up 3.5% as the industry's widescale reformulations, using healthier oils and reducing salt levels, appeared to pay off.
Cow & Gate Baby Balance Jars (£9.4m) was the pick of the new launches in the babyfood category, another sector to see astonishing growth, up 22.3% thanks in part to a new government initiative that saw baby milk formula brand SMA Gold add £52m sales (up 18%).
The launch of the year, however, must surely be Trident. Taking on the mighty Wrigley in a category up by only 3.2%, the chewing gum achieved £23.7m in sales in less than a year.nExtra sales
Benson & Hedges King Size Gold
Birds Eye Ready Meals
Walkers Potato Heads
1 STERLING Superkings
Sales 2007: 138.4 (£92.4m in '06)
2 Walkers Baked
Sales 2007: 37 (£2.5m in '06)
Sales 2007: 33.7 (£4.8m in '06)
Sales 2007: 23.7 (£0m in '06)
5 Bulmers Original
Sales 2007: 23.3 (£1.9m in '06)
6 Fusion Power
Sales 2007: 21.4 (£4.6m in '06)
7 Müller Little Stars
Sales 2007: 19.1 (£4.1m in '06)
Sales 2007: 12.2 (£1.2m in '06)
9 Cow & Gate Baby
Sales 2007: 9.4 (£0m in '06)
10 Heinz Big Eat
Sales 2007: 2.8 (£0m in '06)
*new products definition
A product has been classified as new if it was launched in 2007 or if sales figures for 2006 were not for the full trading yeartop products survey 2007
Table data in The Grocer's Top Products Survey is sourced from Nielsen's Scantrack service, which monitors weekly sales data from a nationwide network of EPoS checkout scanners and represents sales in 74,000 outlets nationwide. Coverage includes grocery multiples, co-ops, multiple off-licences, independents, multiple forecourts and symbols. Data for nappies, personal care and OTC categories is sourced from Nielsen's Personal Care and Over the Counter services, which include grocery multiples, impulse and chemist trade channels. Nielsen's Retail Measurement service provides comprehensive information on actual purchases, market shares, distribution, pricing and promotional activities, and is the fastest and most accurate monitor of consumer sales in Europe. Nielsen services are constantly being improved to reflect what is happening in the retail marketplace, with back data consistently being reprocessed, using the latest Europe-wide data improvement initiatives. consumer sales in Europe. Nielsen's Scantrack service now records 87p in every pound spent in the UK grocery and impulse market with full scanning inputs. It is the only service currently available in the UK to offer such a fully comprehensive read.