How the bacon and sausage category is aiming to drive up sales

After the seismic impact of the horsemeat scandal and the introspection it brought to the meat industry, a rather less dramatic year was something to be welcomed for those in the red meat business.

High pork prices in 2013 levelled back last year and have even dipped slightly in early 2015, bringing price stability to the market. However, changing consumer patterns are having an impact on the category.

Bacon and sausages have experienced contrasting fortunes in the past 12 months, with bacon seeing a slight rise of 0.6% in value to just over £1.3bn, and a 0.5% uplift in volumes to 209.4 million kg [Kantar Worldpanel 52 w/e 1 March 2015]. At the same time, sausages have suffered a 0.7% spend decline to £688.5m and a 1.4% drop in volumes to 144.9 million kg.

So what’s driving these different pictures?

The trend towards more home cooking has helped bacon sales, according to Tulip’s senior category marketing manager Sonia Armanet, who says bacon is no longer being treated as a standalone item on the plate and is being incorporated into a wide range of meals.

Meanwhile for sausages, Armanet says the volume decline comes as the amount of sausages purchased per trip is down year on year, driven predominantly by older families, empty nesters and retired people reducing their consumption. She also suggests sausages’ high fat content may put off an increasingly health-conscious consumer. “Another key factor is the desire to achieve a balanced diet, and health is likely to continue to influence their purchasing habits,” she adds.

Premium choices

However, it’s not all bad news for bangers. Sales of premium products across both categories suggest consumers are reaching for better quality - with premium sausages faring even better than premium bacon in some retailers. Waitrose buyer Samantha Douglas, for example, says the retailer has seen a 15% and 18% sales uplift for free-range bacon and sausages respectively in the past year.

For bacon specifically, Kantar figures provided by industry body Bpex illustrate the surge in popularity of higher tier products, with year-on-year sales of premium bacon rashers rising 15%. Bacon products that are more upmarket than your average rasher, like steaks and joints, have seen even more remarkable value increases of 89% and 43.4% respectively [Kantar Worldpanel 52 w/e 1 March 2015]. Volume sales have been similarly impressive.

When it comes to sausages, the “pressure on prices is driving down quality, which is why consumers are trading up”, says Wilfred Emmanuel-Jones, founder of top-tier brand The Black Farmer, who says more and more customers are making a premium choice.

Black Farmer sales jumped up 44% to £9.6m over the year to 1 February 2015 [Kantar Worldpanel 52 w/e 1 February 2015], while Kantar also says the “premium sausage sector” now has 57.4% penetration and premium-tiered sausage ranges saw a 7% volume sales increase over the Christmas trading period [12 w/e 1 February 2015].

“Consumers are looking for great-tasting, good-quality British products using higher-welfare meat that is fairly priced, and they are prepared to trade up from lower tiers to achieve it,” adds Emmanuel-Jones.

It’s not quite enough to save the overall sausage category from being slightly down in terms of value, however. While sales of premium sausages have performed ahead of the category, this has been “countered by lower sales of frozen and mid-tier ranges”, as Cranswick CEO Adam Couch put it back in November last year.

Growth and NPD

If the future looks challenging for cheaper lines for now, Denhay sales and marketing director Huw Griffiths suggests middle and upper tiers in both categories have a particular opportunity for growth in the years ahead, especially if they can convince consumers living in a post-Horsegate world that they offer a quality product.

“Sales have remained resilient in a difficult trading environment and consumers tell us this is because provenance and trust in the brand are important to them,” says Griffiths.

Suppliers are also focusing on how to take both categories to the next level via NPD. And, after years of flavour-based innovation in sausages, bacon is now enjoying a similar level of attention.

Ian Ritchie, UK sales director for Dawn Farms, believes innovation will bring a vintage 2015 in the cooked bacon market, with the company exploring US-themed cures as opposed to the classic sweetcure, as well as artisan curing methods, which provide an “authentic story for the consumer”.

He also predicts that turkey bacon, a popular healthier substitute for the real thing in the US, is now an “emerging trend on this side of the pond and we expect to see growing demand for its leaner, high-protein, low-cholesterol properties given greater focus in healthier sandwiches”.

Further opportunities exist around developing the strength and flavour of the smoke or cure, while Dawn Farms is also looking to reformulate its range of cures to reduce the number of preservatives and levels of salt in bacon without compromising on taste.

“The trend for innovative bacon flavours and tastes seems to be growing, and this is also helping to drive usage across other mealtimes,” says Bpex head of marketing Kirsty Walker.

“Where manufacturers and retailers are introducing innovative products - for example we have seen Juniper Spiced Back Bacon and Syrup & Stout Streaky Bacon - we can encourage consumers to use bacon to add flavour and texture to many other dishes, including soups, salads, pies and pasta dishes. This will only serve to enhance the category and improve sales further.”

These flavourful factors are giving a particular uplift to the smoked bacon market, claims Denhay sales and marketing director Huw Griffiths. “We feel people are becoming more creative when it comes to how they are consuming bacon, and the rise in scratch cooking and baking means people are looking for that extra layer of flavour in their ingredients, which is why smoked is winning out.”

Not that sausages are being neglected. Even if Kantar says 65% of consumers buy them simply because they enjoy the taste, the examples above show manufacturers are still getting experimental to try and restore sales. Plus, Bpex is urging suppliers to grow sales by linking sausages to seasonal and celebratory events such as British Sausage Week (left), which in 2014 helped generate 9% volume and 6% spend growth compared with the weekly average last year [Kantar Worldpanel usage 52 w/e 7 December 2014].

“We have seen an incredible amount of NPD from the sector thanks to British Sausage Week,” says Walker. “Each year we receive a diverse range of traditional and innovative varieties, including new and unusual flavour combinations, from nearly all the major retailers and brands. It’s clear the industry’s passion and pride for quality sausage-making continues unabated, as does consumer appetite for new varieties.”

So it might have been a year of contrasting fortunes for bacon and sausages, but with a clear trend towards provenance, added value and innovative NPD in both categories, there is much to be optimistic about.

And with the evidence pointing to an increased consumer desire to experiment with new formats and flavours, there’s no reason why both sausages and bacon shouldn’t be set for some sustained growth over the next 12 months.