Competition heats up in meat snacks

Peperami man and his mainstream friends are having a bit of a nightmare at the moment. Although meat snack sales have grown 4.8% to £93.5m in the 52 weeks to 17 March [SymphonyIRI] - volume sales have fallen 3.1% to 5.5 million kg - and it’s the big, established brands like Unilever’s Peperami that have been letting the side down.

Although still the undistiputed category leader with sales of £45m, Peperami’s value sales have edged up by just 0.5% over the past year and volumes have slumped 10.1%. The figures for its closest rival, Kerry Foods’ Mattessons, paint an even bleaker picture - value sales at the Fridge Raiders and Twisted Tails maker have dropped by 6.3% to £26.6m and volumes have tumbled 14.4% to 1.8m kgs [SymphonyIRI].

Look beyond the big-hitters, though, and it’s a far more positive story. Brands such as Wild West Jerky, Cruga Biltong and Jack Link’s may still be tiny compared with Peperami and Mattessons, but their value and volume sales are soaring at double-digit rates.

Why are these challenger brands so popular with consumers, how are they planning to maintain growth - and where does their success leave stalwarts such as Peperami and Mattessons?

Increased consumer interest in provenance is a big part of the story, believes Matthew Chiles, managing director of The Bath Pig, which makes chorizo from 100% British pork.

“There’s a lot of scepticism about meat that’s imported,” he says. “I think there will definitely be a preference for products with a Union Jack on - it’s a great opportunity for us.”

It’s a view echoed by Sean Cannon, co-founder of artisan British charcuterie maker Cannon & Cannon. For too long, British producers have allowed Spanish, French and Italian products to dominate the premium charcuterie and meat snacks categories, but homegrown is at last catching up, he says. “We are finally producing meat to rival that on the Continent, and can’t keep up with the interest,” he adds.

But tapping into the British trend isn’t just about sourcing British meat. As consumers become increasingly interested in traditional British flavours, meat snacks makers are adapting their ranges to offer products with a decidedly British twist.

The Purbeck Larder, for example, recently launched rosemary and beef biltong, and The Jerky Group added a honey barbecue jerky under its Wild West brand in October 2011.

“It’s a flavour that’s very British,” says The Jerky Group founding partner James Newitt.

With interest in all things British at a high thanks to the Diamond Jubilee and the Olympics, this summer is shaping up to be a prime opportunity to showcase British food - and meat snack makers are keen to make sure they get a piece of the action.

Cannon says he is planning to open a shop-cum-restaurant in Brixton, south London, in June, offering a range of British charcuterie, bread and cheese. Chiles, meanwhile, is looking to give visitors to the UK a taste of British meat snacks before they have even stepped onto British soil - The Bath Pig is currently in talks with an airline catering company interested in listing his mini chorizos as an in-flight snack.

As interest in meat snacks is growing, new sub-categories are developing fast. The Potted Game Company, for instance, is hoping to add a “touch of sophistication” to that British summer institution - the picnic - with a five-strong range of potted game snack products. Set up in 2010 by Michelin-trained chef Rory Baxter and Jemima Palmer-Tomkinson - cousin of socialite Tara and childhood friend of Prince William - the company’s products are currently available only at Borough Market and in farm shops in Gloucestershire, but it is in the process of negotiating listings with London’s main foodhalls in time for the Olympics.

And the meat snacks category’s brush with royalty doesn’t end there. The Duchess of Cornwall’s son, food writer Tom Parker Bowles, launched premium pork crackling under the Mr Trotter’s brand in 2011, tapping into growing interest in pork-based snacking products, particularly crackling (which, in contrast to pork scratchings, is slow roasted rather than deep-fried).

Parker Bowles’ business partner and fellow food writer Matthew Fort says the UK meat snacks category is evolving rapidly. “There’s greater diversity and sophistication developing,” he says. “There are opportunities and gaps in the snack market that weren’t there three years ago.”

Connecting back to the farm
With Cannon & Cannon and The Potted Game Company both starting life at Borough Market, the humble market stall has become the nursery for many new breeds of meat snacks. “It’s about nose-to-tail eating. People want to connect back to the farm and the field,” says Cannon. “Markets are becoming the place for consumers to do that. In the past they were somewhere you went to get something cheap, but people are prepared to pay a premium now.”

Market stall innovation is well and good, but to what extent are the more niche meat snacks actually making the transition into the mainstream and the major multiples? For now, meat snack ranges in the supermarkets remain largely dominated by the likes of Peperami and Mattessons - and confined to the chilled aisles. The Jerky Group’s Newitt believes more work needs to be done to convince retailers to give meat snacks dedicated shelf space - ambient as well as chilled.

Hanging a few bags of jerky in the beer aisle is not enough to give the category critical mass, he points out. “Our biggest customer complaint is ‘we can’t find your product in store’,” he says. “Retailers are now recognising they need a shelf for meat snacks.”

That’s not the only improvement on the cards. In 2011, The Jerky Group signed a deal with Marks & Spencer to supply it with own-label beef jerky - a sign the dried meat is starting to become embedded in the retail mainstream, says Newitt. “People are getting what beef jerky is now,” he says. “Launching with M&S has been a fabulous success and gave us huge credibility in the category. It raised the game.”

New product development trends are also starting to filter through from the niche, premium end of the market to more mainstream players.

Last month, for example, The Jerky Group announced a move into pork crackling under its new Hogbites brand, following hot on the heels of the likes of Parker Bowles’ Mr Trotter’s.

Changing attitudes to travel and health should also stand meat snacks in good stead with mainstream consumers, manufacturers argue. “The increase in worldwide travel particularly by the younger generation, is a key factor,” says Shane Balcombe, sales director at Cruga Biltong. “These youngsters experience different food and cultures and readily embrace new tastes when returning home.”

Growing interest in the health benefits of dried meat compared with more traditional snacks such as crisps is likely to benefit the sector too. “There’s a huge recognition that high-protein, low-fat snacking improves diet,” says The Jerky Group’s Newitt. “Customers now really get the health message about how nutritious biltong and jerky is - and it’s tasty. It’s not like a bag of crisps that leaves you still hungry afterwards.”

To hammer home just how compatible meat snacks are with calorie-conscious living, M&S is launching a 30g bag of The Jerky Group’s jerky - containing fewer than 100 calories - under its Eat Well range later this month.

Peperami unfazed
Despite the flurry of new players entering the market, market leader Peperami claims it is unfazed by the competition. Unilever UK brand manager Kate Mitchell says the number of pre-packed lunches featuring “hand-held meat snacks” has risen considerably since the start of the recession - a trend that suggests there are plenty of opportunities for manufacturers and retailers of all sizes to grow.

“We launched a bite size snack, Peperami Nibblers, in 2010, which has achieved value sales of over £2m, increasing by over 73% in the last 12 months,” she adds. “There is an opportunity to drive sales by continuing to cater to consumer demand, and Peperami is still the leading brand for meat snacking.”

Unilever’s success with Peperami Nibblers shows established brands can still make a significant impact with NPD - but the young upstarts, too, have their eye on further innovation.

“There’s going to be a lot more variety - not just different flavours but different textures and techniques of production,” says Simon Day, founder of Unearthed, which has seen sales of its Spanish snacking chorizo and beef biltong soar by 479%, from £157,000 to £910,000, between 2010 and 2011 after a boost in distribution in Sainsbury’s.

Charcuterie specialist Cannon even talks of a possible “revolution” in the meat snacks category. “If someone makes a products that’s good enough, there will be a total revolution in the industry,” he believes.

It looks like Peperami man may have a few sleepless nights ahead of him.