Feverish promotional activity has robbed the bacon market of buoyant sales growth. Richard Clarke reports on a far from sizzling picture
It hasn’t been a great year for bacon. In fact, it wouldn’t be too wide of the mark to say that it’s been a pretty poor one: TNS data shows that while volume sales have risen 1.5%, value sales have dipped.
How things change - and how quickly. Cast your mind back to this time last year, and the sector was wallowing in year-on-year value growth of 4%. But fast forward, and the growth has disappeared. In fact, in the past year value sales fell back 0.4% to £1.04bn.
Prepacked rashers - 66% of the market - fared worse, with sales down 0.7%. The story is even grimmer for the 12 weeks to September 11, when prepacked rasher sales fell 2.6%. Industry players have little doubt where the money has gone: on deep cut promotions.
In the year to September 11, across the major multiples, 40% of prepacked back bacon was sold on promotion compared with 30% in the previous 12 months [TNS].
Again, the trend is even more marked if you look at the 12 weeks to September 11, during which a frenzy of promotions meant 48% of prepacked back rashers were sold on deal, compared with 30% in the equivalent period in 2004.
This escalating promotional activity - predominantly bogofs - has sparked calls from various corners of the industry for a change in the way bacon is promoted.
Robert Smith, MD at the Dutch Meat Board’s UK office, says the scale of promotional activity has gone too far.
“It even includes the economy stuff now,” he says, pointing out that in
the 12 weeks to September 11, 9% of value own label bacon was sold on promotion. “What kind of lunacy is that?”
Smith is alarmed by the widespread use of bogofs. “Bogofs are part of the everyday shopper language. Shoppers want a deal, sure, but deals don’t always have to be bogofs. What about two-for-£3 type deals? We have got to get value back into the category.”
Even some of the retailers admit that deep-discount promotions aren’t doing the category any good - but it’s a case of damned if you do, and damned if you don’t, says Asda bacon buyer Paul Armstrong. “Promotions are destroying value, but everyone is doing it. We’re all at it. Bacon is a known value item and everyone is fighting for the floating customer. The problem now is that bogofs have become the norm.”
But not everyone is down on
promotions. Sainsbury bacon buyer Guy Hooper says: “Generally the price per kg of most bogofs isn’t that far away from the price per kg of larger packs and price fighter lines so I don’t think it is the only factor at play here.”
Richard Hawkins, sales director at processor Direct Table Foods, points out that deals do drive penetration in the category and get shoppers buying more, more frequently.
Nigel Glendinning, marketing controller for bacon at Grampian Country Food Group also accepts that promotions are a good way to drive volume sales. But he believes that the already high penetration of bacon into UK households - about 88% of households buy prepacked bacon rashers, according to TNS - means such blanket use of them is unnecessary.
“Promotions are a great incentive now and again,” he says, “but I don’t think we need to promote at such a level all of the time. We need to use promotions more strategically.”
Giles Quick, MD at consumer usage panels at TNS, shares this view. “Retailers are not attracting new customers with promotions. New devices are required, which should position bacon towards a health, practicality and enjoyment model.”
It hasn’t been a great year for bacon. In fact, it wouldn’t be too wide of the mark to say that it’s been a pretty poor one: TNS data shows that while volume sales have risen 1.5%, value sales have dipped.
How things change - and how quickly. Cast your mind back to this time last year, and the sector was wallowing in year-on-year value growth of 4%. But fast forward, and the growth has disappeared. In fact, in the past year value sales fell back 0.4% to £1.04bn.
Prepacked rashers - 66% of the market - fared worse, with sales down 0.7%. The story is even grimmer for the 12 weeks to September 11, when prepacked rasher sales fell 2.6%. Industry players have little doubt where the money has gone: on deep cut promotions.
In the year to September 11, across the major multiples, 40% of prepacked back bacon was sold on promotion compared with 30% in the previous 12 months [TNS].
Again, the trend is even more marked if you look at the 12 weeks to September 11, during which a frenzy of promotions meant 48% of prepacked back rashers were sold on deal, compared with 30% in the equivalent period in 2004.
This escalating promotional activity - predominantly bogofs - has sparked calls from various corners of the industry for a change in the way bacon is promoted.
Robert Smith, MD at the Dutch Meat Board’s UK office, says the scale of promotional activity has gone too far.
“It even includes the economy stuff now,” he says, pointing out that in
the 12 weeks to September 11, 9% of value own label bacon was sold on promotion. “What kind of lunacy is that?”
Smith is alarmed by the widespread use of bogofs. “Bogofs are part of the everyday shopper language. Shoppers want a deal, sure, but deals don’t always have to be bogofs. What about two-for-£3 type deals? We have got to get value back into the category.”
Even some of the retailers admit that deep-discount promotions aren’t doing the category any good - but it’s a case of damned if you do, and damned if you don’t, says Asda bacon buyer Paul Armstrong. “Promotions are destroying value, but everyone is doing it. We’re all at it. Bacon is a known value item and everyone is fighting for the floating customer. The problem now is that bogofs have become the norm.”
But not everyone is down on
promotions. Sainsbury bacon buyer Guy Hooper says: “Generally the price per kg of most bogofs isn’t that far away from the price per kg of larger packs and price fighter lines so I don’t think it is the only factor at play here.”
Richard Hawkins, sales director at processor Direct Table Foods, points out that deals do drive penetration in the category and get shoppers buying more, more frequently.
Nigel Glendinning, marketing controller for bacon at Grampian Country Food Group also accepts that promotions are a good way to drive volume sales. But he believes that the already high penetration of bacon into UK households - about 88% of households buy prepacked bacon rashers, according to TNS - means such blanket use of them is unnecessary.
“Promotions are a great incentive now and again,” he says, “but I don’t think we need to promote at such a level all of the time. We need to use promotions more strategically.”
Giles Quick, MD at consumer usage panels at TNS, shares this view. “Retailers are not attracting new customers with promotions. New devices are required, which should position bacon towards a health, practicality and enjoyment model.”
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