With sales growth slumping sharply, the hot desserts category has experienced a reversal of fortunes this year yet sales of individual puds are thriving. Hannah Stodell finds out why
Family might have been deemed more important than work or hobbies in a poll conducted for Radio 5 Live's Family Week this week, but that hasn't translated to the dinner table - or not to the nation's pudding-eating habits.
If 2009 was a year for sharing as recession-fearing shoppers battened down the hatches and stocked up on family desserts, this year appeared to be the year people reverted to the "It's not Terry's, it's mine" mentality of looking after number one and favouring individual desserts.
After a strong 2008/2009, sales of larger family packs such as favourite puddings and their twin counterparts, which accounted for 64% of the sector, declined 2.6% and 3.6% in value respectively this year. Treats for two also fell 8.1%, dragging the category's total value growth down from last year's 11.4% to a paltry 0.8% [Kantar Worldpanel 52w/e 5 September 2010]. Total volume sales, however, rose 9.6% compared with 7.8% last year. So why such a reversal in fortune? Well, suffice to say, the apparent change in eating habits has less to do with people falling out with their families and more to do with the heavy promotional activity in the category over the past year particularly in relation to individual and pot desserts. While overall volume growth has been very much at the expense of value growth, these two sub-categories have thrived on both counts, volume sales of individual desserts up by 96.5% and value sales up 84.1%
It's no coincidence that 49% of individual branded and own-label dessert sales were sold on promotion, up from 43% in 2009 [Nielsen 52 w/e October 30 2010], encouraging shopppers to spurn larger family packs in favour of smaller packs sizes.
With more people in the UK living alone than ever before and busy families eating separately, demand for single and smaller desserts has increased but a focus on portion control and convenience also benefited the sub-sector this year, says Jamie Fyne, category manager for Daniels Group which owns Farmhouse Fare. "If you look at the nutritionals of an individual pudding, they're the same per 100g so it's more about portion control. You know if you buy a 100g pudding, you're only going to eat 100g whereas if you buy a 400g serve to share, you could go over."
Fyne notes an upswing in families buying a variety of different individual desserts as well as more single young consumers being drawn into the category through innovative new products.
While the core shopper profile remains broadly mature and affluent (58% ABC1 and 71% aged 45 and over), as shown by the over-trading of M&S (which represents almost a third of the market), Fyne says meal deals are driving trial outside this demographic and launches such as its chocolate and caramel Lovetub sponge puddings (see right) are already attracting new blood. The cheeky ice cream style tubs, launched in September, sought to attract younger women aged 25-34 who weren't traditional pud buyers but enjoyed ice cream. Supported by a £1m first-year spend, including a six-month sponsorship of Sky Movies' Drama and Romance TV channel, the puds are already resonating with shoppers, says Fyne, who hints at further flavours and smaller formats.
Posh pud purveyor Gü is another company that has successfully engaged with younger consumers. In September, it linked up with popstar Lily Allen for the star-studded launch of her Lucy in Disguise vintage boutique in Covent Garden, serving Gü Cheeky Pots of Chocolate Raspberry Ganache as evening dessert canapés to celebrity guests. Gü's puds, which include the much-loved hot chocolate soufflés, appeal to a 25-45 year age-bracket according to Gü and Frü Puds marketing controller Meg Farren. "Our brand is contemporary and fresh and that often aligns with the younger shopper but we're not saying let's go out and target 18 year olds," she says.
The brand plans to expand its range of individual cold puds for on-the-go shoppers in early spring but not hot puds, says Farren. "It's definitely something we wouldn't rule out for winter 2011/2012 but it's not planned currently."
Smaller portions have rocketed but pies, crumbles and tarts up 6.7% by value [Kantar Worldpanel] have not done badly either. Their enduring popularity underscores how important nostalgia and being able to service a variety of different meal occasions are. Indeed, says Dan Ince, Premier Foods' head of marketing for desserts and home baking: "Nostalgic dessert brands have become even more appealing in 2010, as consumers are ever more aware of value choices but without wanting to compromise on taste."
Aunt Bessie's brand manager for desserts Rachel Bradshaw agrees. "There is clearly still that desire for nostalgia but equally, new ideas are working well, which suggests people are looking for a balance," she says, citing a 33.6% value growth in its traditional hot crumbles [Nielsen 52w/e 30 October 2010]. "Crumbles have been performing particularly strongly showing product quality and family favourites are as important as value."
Bradshaw acknowledges increases in the price of flour, dairy products, vegetable oils and fruits such as cherries are affecting manufacturers but stresses the industry is working hard to drive efficiencies throughout the supply chain. And based on recent figures, these efforts coupled with aggressive promotions appear to have paid off for the consumer with the average price paid per pudding falling from £1.79 in 2009 to £1.71 this year [Nielsen 52w/e October 30].
While own label still has the lion's share of the market, accounting for 82.9% of value, this has fallen by 3.8% with branded desserts increasing their share 30.9% to 17.1% since last year [Kantar 52w/e 5 September]. Weight Watchers was a particular success, up 94.8% by volume and 88% by value [Symphony IRI 52w/e 2 October] but premium brands such as Farmhouse Fare and Yorkshire-based Just Puds stole the show, outgunning rivals with 1807.4% and 422% volume growth respectively.
"There has been a massive push on premium by all the retailers, particularly in the past 12 weeks," notes Farren. "In desserts, where you're indulging yourself anyway, you want it to be good."
One retailer Gü is looking to build business with next year is Morrisons, which alongside The Co-op enjoyed the strongest growth in the category this year, gaining 30.9% and 39% respectively. The Co-op says it boosted sales with the launch in September of 10 new own-label hot eating dessert lines.
With family desserts (350g+) on the decline, manufacturers are shrinking products to jump on the individual dessert wagon but also in Gü's case to counter the effect of rising commodity prices such as chocolate and cream. In April this year BBC's Watchdog highlighted the weight reduction of a number of consumer products including Gü's Cheeky Pots of Chocolate Ganache, which dropped from 50g to 45g. Gü had kept the rsp at £1.99 despite chocolate prices more than doubling since launch in 2007.
Farren says the new single products scheduled for 2011 will tap consumer trends rather than be motivated by cost reductions.
"There is the continuing issue of increasing costs but our launches don't start with that but what it will deliver for consumers. The single products are about understanding how much is too much and how much is too little."
Focus On Hot Desserts
Family might have been deemed more important than work or hobbies in a poll conducted for Radio 5 Live's Family Week this week, but that hasn't translated to the dinner table - or not to the nation's pudding-eating habits.
If 2009 was a year for sharing as recession-fearing shoppers battened down the hatches and stocked up on family desserts, this year appeared to be the year people reverted to the "It's not Terry's, it's mine" mentality of looking after number one and favouring individual desserts.
After a strong 2008/2009, sales of larger family packs such as favourite puddings and their twin counterparts, which accounted for 64% of the sector, declined 2.6% and 3.6% in value respectively this year. Treats for two also fell 8.1%, dragging the category's total value growth down from last year's 11.4% to a paltry 0.8% [Kantar Worldpanel 52w/e 5 September 2010]. Total volume sales, however, rose 9.6% compared with 7.8% last year. So why such a reversal in fortune? Well, suffice to say, the apparent change in eating habits has less to do with people falling out with their families and more to do with the heavy promotional activity in the category over the past year particularly in relation to individual and pot desserts. While overall volume growth has been very much at the expense of value growth, these two sub-categories have thrived on both counts, volume sales of individual desserts up by 96.5% and value sales up 84.1%
It's no coincidence that 49% of individual branded and own-label dessert sales were sold on promotion, up from 43% in 2009 [Nielsen 52 w/e October 30 2010], encouraging shopppers to spurn larger family packs in favour of smaller packs sizes.
With more people in the UK living alone than ever before and busy families eating separately, demand for single and smaller desserts has increased but a focus on portion control and convenience also benefited the sub-sector this year, says Jamie Fyne, category manager for Daniels Group which owns Farmhouse Fare. "If you look at the nutritionals of an individual pudding, they're the same per 100g so it's more about portion control. You know if you buy a 100g pudding, you're only going to eat 100g whereas if you buy a 400g serve to share, you could go over."
Fyne notes an upswing in families buying a variety of different individual desserts as well as more single young consumers being drawn into the category through innovative new products.
While the core shopper profile remains broadly mature and affluent (58% ABC1 and 71% aged 45 and over), as shown by the over-trading of M&S (which represents almost a third of the market), Fyne says meal deals are driving trial outside this demographic and launches such as its chocolate and caramel Lovetub sponge puddings (see right) are already attracting new blood. The cheeky ice cream style tubs, launched in September, sought to attract younger women aged 25-34 who weren't traditional pud buyers but enjoyed ice cream. Supported by a £1m first-year spend, including a six-month sponsorship of Sky Movies' Drama and Romance TV channel, the puds are already resonating with shoppers, says Fyne, who hints at further flavours and smaller formats.
Posh pud purveyor Gü is another company that has successfully engaged with younger consumers. In September, it linked up with popstar Lily Allen for the star-studded launch of her Lucy in Disguise vintage boutique in Covent Garden, serving Gü Cheeky Pots of Chocolate Raspberry Ganache as evening dessert canapés to celebrity guests. Gü's puds, which include the much-loved hot chocolate soufflés, appeal to a 25-45 year age-bracket according to Gü and Frü Puds marketing controller Meg Farren. "Our brand is contemporary and fresh and that often aligns with the younger shopper but we're not saying let's go out and target 18 year olds," she says.
The brand plans to expand its range of individual cold puds for on-the-go shoppers in early spring but not hot puds, says Farren. "It's definitely something we wouldn't rule out for winter 2011/2012 but it's not planned currently."
Smaller portions have rocketed but pies, crumbles and tarts up 6.7% by value [Kantar Worldpanel] have not done badly either. Their enduring popularity underscores how important nostalgia and being able to service a variety of different meal occasions are. Indeed, says Dan Ince, Premier Foods' head of marketing for desserts and home baking: "Nostalgic dessert brands have become even more appealing in 2010, as consumers are ever more aware of value choices but without wanting to compromise on taste."
Aunt Bessie's brand manager for desserts Rachel Bradshaw agrees. "There is clearly still that desire for nostalgia but equally, new ideas are working well, which suggests people are looking for a balance," she says, citing a 33.6% value growth in its traditional hot crumbles [Nielsen 52w/e 30 October 2010]. "Crumbles have been performing particularly strongly showing product quality and family favourites are as important as value."
Bradshaw acknowledges increases in the price of flour, dairy products, vegetable oils and fruits such as cherries are affecting manufacturers but stresses the industry is working hard to drive efficiencies throughout the supply chain. And based on recent figures, these efforts coupled with aggressive promotions appear to have paid off for the consumer with the average price paid per pudding falling from £1.79 in 2009 to £1.71 this year [Nielsen 52w/e October 30].
While own label still has the lion's share of the market, accounting for 82.9% of value, this has fallen by 3.8% with branded desserts increasing their share 30.9% to 17.1% since last year [Kantar 52w/e 5 September]. Weight Watchers was a particular success, up 94.8% by volume and 88% by value [Symphony IRI 52w/e 2 October] but premium brands such as Farmhouse Fare and Yorkshire-based Just Puds stole the show, outgunning rivals with 1807.4% and 422% volume growth respectively.
"There has been a massive push on premium by all the retailers, particularly in the past 12 weeks," notes Farren. "In desserts, where you're indulging yourself anyway, you want it to be good."
One retailer Gü is looking to build business with next year is Morrisons, which alongside The Co-op enjoyed the strongest growth in the category this year, gaining 30.9% and 39% respectively. The Co-op says it boosted sales with the launch in September of 10 new own-label hot eating dessert lines.
With family desserts (350g+) on the decline, manufacturers are shrinking products to jump on the individual dessert wagon but also in Gü's case to counter the effect of rising commodity prices such as chocolate and cream. In April this year BBC's Watchdog highlighted the weight reduction of a number of consumer products including Gü's Cheeky Pots of Chocolate Ganache, which dropped from 50g to 45g. Gü had kept the rsp at £1.99 despite chocolate prices more than doubling since launch in 2007.
Farren says the new single products scheduled for 2011 will tap consumer trends rather than be motivated by cost reductions.
"There is the continuing issue of increasing costs but our launches don't start with that but what it will deliver for consumers. The single products are about understanding how much is too much and how much is too little."
Focus On Hot Desserts
No comments yet