Ambient food gets canned as prices fall

The performance of the UK canned food sector continues to look decidedly crumpled. As consumers increasingly trade up to chilled products or the immediate hit of food to go, the humble can is getting left on the shelf.

Every one of the six key canned food categories has seen value sales fall. The biggest, canned fish, has suffered the greatest loss, a 7.3% decline worth £37m in lost sales. Average prices of canned fish are down 7.1%, the third greatest category fall of the year after fresh veg and sports nutrition.  

This has been driven partly by deepening deals as the multiples try to wrest back lost share from the discounters. “Standard tuna, particularly multipacks, continue to be heavily promoted,” says John West marketing director Jon Walsh. “Competition between brands and retailers combined with reduced own-label prices has resulted in deeper cuts.” 

Falling costs have been another factor, says Princes marketing director Neil Brownbill. “On the back of reduced raw material costs, retailer tuna prices have been reduced across branded and own label, and there have also been lower promotional price points,” he says, adding the narrowing price difference between branded and own-label canned fish (from 40p per kilo a year ago to 34p) has prompted many to trade up to brands. 

Market leader John West has been the key beneficiary of this, bucking the overall category decline with value growth of 2% on volumes up 11.7%. Number two Princes, meanwhile, has seen its canned fish sales sink 9.9% as a result of price deflation, as volumes have held steady. 

John West hasn’t left it all to chance, of course. The development of new products, notably its Infusions and Steam Pot ranges and Spreadables sandwich fillers, that can command a premium over the core tinned tuna and mackerel lines, has been central to the brand’s success. Princes’ answer to falling prices, meanwhile, has been its more premium Limited Edition range, boasting lines such as mackerel fillets in Moroccan spices. 

The tumbling price of oil has also contributed to the fall of canned fish prices, but so has a glut of availability, according to Bryn Scadeng, co-founder of The Reel Fish Co. “There’s simply too much purse-seine tuna available. Cheap net-caught tuna is now ubiquitous in discounters and pound shops.”

It’s not just canned fish brands that are developing more premium lines to compete with the products being piled high and sold cheap in the discounters. Heinz, for example, has been busy developing its Beanz range with higher value lines such as the Fajita, Tuscan and Veg Chilli Beanz products. In July, the brand launched canned Dhal Curry Lentils and Tagine Chickpeas. 

Such developments have helped value sales hold up relatively well in canned beans, though volumes are falling fast in both beans and pasta. “Heinz has been driving these heavy volume declines in beans and pasta,” says Nielsen analyst Rob Robinson. “Price increases driven by shallower promotions have been driving this as well as consumers switching to healthier side options.”

Demand for products perceived as healthier has left its mark on the wider canned food category, with current trends supporting products that are low in sugar and marketed on their freshness and natural credentials. In the summer, Heinz reacted with the launch of 50% Less Salt & Sugar Beanz.

Tinned veg has also been through the wringer, says Chris Wright, marketing director at Crosse & Blackwell. “Consumers are widening their repertoire away from traditional meat & veg,” he explains. But it’s not all bad; shoppers’ adventurousness has boosted sales of beans (such as pinto and kidney), and key Mediterranean cooking ingredient tinned tomatoes is also in growth, he says. 

Napolina has enjoyed a 2% boost to value off the back of a 13.6% volume gain, with brand owner Princes investing in a range of marketing initiatives aimed at getting Brits cooking like the Italians including sponsorship of ITV show Gino’s Italian Escape and launching its own YouTube cooking channels featuring step-by-step recipe guides. 

Cirio, meanwhile, has turned in value growth of 10.5%, thanks partly to distribution gains. “Cirio is now the UK’s fastest-growing Italian brand in the UK, with an 8.8% share of the total canned tomato sector,” said UK operations MD Diego Pariotti in September when the brand announced Antonio Carluccio (right) as its new brand ambassador. 

With a big name like that and tomatoes offering a rare chink of light in an otherwise gloomy category, expect to see more of this brand in 2016.

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