The lunchbox category used to be all about the kids. This year, adults are driving sales and their agenda includes health and premium quality as well as convenience, says Nick Hughes
It's been a long time coming, but finally suppliers are waking up to a world of opportunity in the lunchbox category.
Lunchboxes have been growing in popularity among adults for some time now, but suppliers have persisted in focusing their efforts on the sub-category traditionally accounting for the biggest share of the market children's lunchboxes.
This year, however, it's a different story. Adult lunchboxes have reclaimed the limelight from children's, accounting for 70.8% of all lunchbox occasions [Kantar 12m/e February 2011], with young adults in particular driving growth in the category. Total lunchbox occasions increased by 1.6% to £4.2bn, while value increased by 1.8% to over £5.5bn.
Consumption among adults has grown by 2.9% year-on-year, while that of children has fallen by 1.2%. Within the adult figure, consumption among 17 to 34-year-olds has leapt so significantly, by 5.6% this year, that they now account for 29% of total lunchbox occasions.
Convenience and enjoyment have overtaken health as reasons behind lunchbox consumption, prompting brands to target adult consumers with innovative new products and formats. "The majority of 17 to 34-year-olds no longer have time to take a lunch break, so the demand for packed lunches that are delicious and satisfying, yet quick and easy to prepare, has risen significantly," says Craig Sammells, brand manager at Discovery Foods. The supplier now carries a range of ideas on its website aimed specifically at increasing lunchbox occasions among the adult market.
Cash-rich, time-poor young males in particular have benefited from targeted innovation and marketing activity. Meat snacks constitute one area where the proliferation of young males entering the lunchbox category has inspired suppliers to up their game. Jack Link's, the American meat snack brand, has recently launched a new product Flamin' Buffalo Chicken Bites that it claims represents a healthier option. It plans to follow the launch with a major support programme aimed not only at building category awareness but at creating a £20m brand within five years.
"Our vision is to be the number three brand in the category by 2012," says Aaron Khattra-Hall, senior brand manager for its UK distributor, Petty Wood. "Jack Link's is a meaty, low-fat, high-protein snack. Our products are ambient, so perfect for a lunchbox."
The popularity of meat snacks among young men is due in part to a wider selection of flavours and NPD, says Chris Owen, Mattessons senior brand manager. "Our Fridge Raiders range now includes piri piri and BBQ flavours," he says.
Instant hot snacks are also ideal for consumers at lunchtimes because of their convenience, adds Neil Brownbill, marketing director for the Princes brand. "The category is experiencing year-on-year growth in both volume and value, which is likely to be down to an increase in consumers joining the lunchbox market and looking for products that offer value for money and convenience," he says.
Princes relaunched its Hot Pots range 18 months ago, pitching them as great-tastingfull meals. Following volume growth of 107% year-on-year, according to Brownbill, new flavours are now on the cards.
Adult consumers are also buying into the more traditional pre-packed sandwich meat sector, which is worth £1.5bn in value and is growing by 5.9% year-on-year [IRI 52w/e 14 May 2011].
"Corned beef is showing value decline, but turkey ham and pork have put in standout performances. Chunky formats are also performing well," says Daniel McGuigan, category management controllerat Bernard Matthews Farms.
He also points to a trend towards smaller pack sizes for cooked meats, and a rise in the popularity of price-marked packs that successfully balance the need for value and convenience. "Value for money is still front of shoppers' minds, but pack and product convenience are becoming increasingly important," he says.
Other suppliers have looked to new formats as a means of increasing usage occasions. Burts Chips, for example, has seen a huge uplift in demand for its multipack crisps, an area traditionally dominated by the mid-market giants.
"Up until recently, multipacks have been the domain of the likes of Walkers and the premium boys haven't done very much, but in recent times we've noticed a huge uplift in demand and, in fact, our most popular seller in Tesco at the moment is our lightly sea-salted multipack," says Burts Chips sales director Nick Hurst.
Premium offerings from the likes of Burts tick the enjoyment box in the lunchbox equation, says Hurst. "It's quite a nice experience to open a decent packet of crisps, have a good crunch and enjoy eating them, rather than opening your lunch, staring at it and thinking, 'I'm not looking forward to any of that'."
The demand among young adults for a fun element in their lunchboxes is also reflected in suppliers' marketing strategies. Mattessons recently held an on-pack competition for consumers to win a pair of trainers in conjunction with its latest Free Running ad. "We saw this as a really nice fit as younger male shoppers are a very active group," says Owen. "The competition generated a lot of interest and entries as our communication lay entirely within consumers' interests."
Milkshake brand Yazoo is targeting the same market, sponsoring the Loaded Laftas, a nationwide search for the new star of comedy run by lads' mag Loaded.
Bel UK is also using comedy to reach out to young adults. It has relaunched its The Laughing Cow brand via a multi-platformcampaign, kicking off the marketing initiative in May with 'Pull The Udder One' video footage of comedian Milton Jones performing stand-up to a field of cows in an attempt to prove they really can laugh. The campaign is being supported by PR, a new TV advert, in-store theatre and promotional activity and represents The Laughing Cow "engaging with consumers on a scale not previously seen by the brand", says Fiona Riches, senior brand manager at Bel UK.
The snacking cheese market, more than most other categories, requires suppliers to communicate appropriate signals. A particular challenge is the need to convey elements of both fun and permissibility, something Kerry Foods' Cheestrings brand has long strived to achieve.
Its latest campaign, Gino's Good Food Fight a consumer awareness campaign featuring celebrity chef Gino D'Acampo aims to talk openly to parents about Cheestrings through social media, in an effort to dispel any negative connotations the brand may have.
"There has been a shift in perceptions of cheese snacking over the last couple of years, but there are still some negative perceptions among parents who may not understand that cheese snacks are cheese and so tend to be very good for their children nutritionally," says Kelly Rafferty, marketing manager at Kerry Dairy.
No-one can accuse Cheestrings of not keeping the brand fresh and interesting in recent years, but its latest innovations have not always hit the mark. Cheestrings Spaghetti has had low penetration since launch (see right) and is due to deliver just over £4m in first-year sales, £3m down from the £7m predicted by the brand at launch. "It's early days. I think it's critical that awareness of the product builds and that takes time," says Rafferty.
Cheestrings has also decided to withdraw Cheestrings Shots after it failed to hit the necessary sales rates. "Shots didn't work because we didn't invest in above-the-line," admits Rafferty. "The market is very branded, and driven largely through advertising, and it is competitively aggressive."
The children's lunchbox category is becoming increasingly sensitive to promotions as families' disposable incomes dwindle. Value sales of Yoplait UK's Frubes brand have remained static after it was forced to increase promotional activity to drive volumes. However, its EDLP brand, Wildlife, has had a good year, with a new TV campaign helping drive 16% growth for the £35m brand.
"We've invested time in getting the price right," says Nicola Dean, category controllerfor Yoplait UK. "The Wildlife brand has tended to rely on being on shelf, so we wanted to make sure consumers were aware of it. The return to the EDLP price of a pound also did really well."
In the current economic climate, effectiveprice positioning is a vital component of the marketing mix, yet the main drivers of children's lunchbox purchasing habits are not going away, says Versha Patel, head of sweet for Premier Foods. "Mums want to provide a convenient, healthy lunchbox," she says. "You've got the government telling you what not to put in your lunchbox, plus you've got the schools themselves and even websites advising parents what to put in lunchboxes. Health is a big part of the equation."
Health by itself, however, is not a silver bullet for a successful kids' innovation as Burts Crisps has found out to its cost. A couple of years ago the brand launched a children's multipack in partnership with Great Ormond Street Hospital, using a recipe free from salt.
"As far as parents and retailers were concerned, it was a fantastic product," says Hurst. "The sad fact is that children thought it was a rubbish idea." The moral of the story, he says, is that if a product tastes bad to children, it won't survive.
Burts is taking a fresh look at the potential for a healthier children's crisp that doesn't compromise on taste. "Hopefully we'll come up with something that's a little healthier but ticks the box in tasting good to children," says Hurst.
Premier's Patel believes suppliers "could do better with lunchbox generally", not just in terms of children's health. Premier is increasingly looking at the format of its lunchbox-orientated products to make them fit more closely with changing consumer needs.
"The formats of some of our Cadbury and Mr Kipling cakes don't really work for lunchbox at the moment," she admits. "Consumers are looking for individually wrapped, hand-held cakes, something that is easy to open and that fits in the lunchbox and that's something we can do better."
Improving the portability of Premier's sweet products is one priority for Patel and her team. Managing portion control is another. "If you look at our slices, you've got to eat two of them and people don't want to," she says.
Confectionery and cakes in general are in decline as lunchbox options, adds Patel, with consumers favouring healthier alternatives such as yoghurts and biscuits. Furthermore, the adult market in particular is increasingly looking for more rounded meal solutions rather than the traditional collection of snacks.
Bakery suppliers, meanwhile, are deviating from traditional offerings in an attempt to maintain interest in bread-based lunches, which still command a 69% share of lunchbox occasions. Allied Bakeries has recently launched Kingsmill 50/50 Pockets, 50/50 Deli Softs, and 50/50 Wraps as "versatile lunch options for adults and children tired of repetitive lunch prospects". Warburtons, meanwhile, has been steadily increasing its portfolio of sandwich alternative products, such as Square(ish) Wraps and Sandwich Thins, in a bid to satisfy the growing need for different lunchbox experiences.
The diverse composition of the lunchbox has historically made merchandisingproducts a difficult task for retailers particularly when the constituent productsneed a presence on their own fixtures. And the conundrum of how to cross-sell products that sit naturally in competing categories has not been lost on suppliers. Two years ago, McCoy's and McVitie's owner United Biscuits launched Project Horizon, a £1m research venture to explore how retailers could further exploit six specific snacking occasions.
One potential solution proposed by United Biscuits is for retailers to show complementary or replacement meal solutions in store. Another, suggested by Premier's Patel, is to capitalise on the back-to-school period for example, by putting relevant products on gondola ends.
Prince's Brownbill recommends steering consumers towards lunchbox products by keeping the items within their traditional fixtures but clearly signposting them as lunchbox-friendly through shelf markers or on shelf-edge labelling.
However, Nick Stuart, commercial directorat UBUK, points to evidence that some retailers are now grouping 'lunchbox' products together on their fixtures. "Retailers will fully be able to exploit the lunchbox opportunity when they successfully offer a full 'meal solution' with all its parts in one place," he says.
The chilled lunchbox fixture has moved closer to the front door and invariably carries alternatives to the retailer's own sandwich offer. "You've got so many more options like sushi and non-carb variants and so many more different price points. That's making it more appealing to shoppers," says Patel.
The growing ubiquity of the 'meal deal' in impulse and at front-of-store locations shows that a bespoke 'lunchbox' fixture can work, according to Stuart.
If the concept can be replicated throughout the store, as he suggests, the long-term opportunities to drive lunchbox occasions through clever merchandising can only increase.
Focus On Lunchbox
It's been a long time coming, but finally suppliers are waking up to a world of opportunity in the lunchbox category.
Lunchboxes have been growing in popularity among adults for some time now, but suppliers have persisted in focusing their efforts on the sub-category traditionally accounting for the biggest share of the market children's lunchboxes.
This year, however, it's a different story. Adult lunchboxes have reclaimed the limelight from children's, accounting for 70.8% of all lunchbox occasions [Kantar 12m/e February 2011], with young adults in particular driving growth in the category. Total lunchbox occasions increased by 1.6% to £4.2bn, while value increased by 1.8% to over £5.5bn.
Consumption among adults has grown by 2.9% year-on-year, while that of children has fallen by 1.2%. Within the adult figure, consumption among 17 to 34-year-olds has leapt so significantly, by 5.6% this year, that they now account for 29% of total lunchbox occasions.
Convenience and enjoyment have overtaken health as reasons behind lunchbox consumption, prompting brands to target adult consumers with innovative new products and formats. "The majority of 17 to 34-year-olds no longer have time to take a lunch break, so the demand for packed lunches that are delicious and satisfying, yet quick and easy to prepare, has risen significantly," says Craig Sammells, brand manager at Discovery Foods. The supplier now carries a range of ideas on its website aimed specifically at increasing lunchbox occasions among the adult market.
Cash-rich, time-poor young males in particular have benefited from targeted innovation and marketing activity. Meat snacks constitute one area where the proliferation of young males entering the lunchbox category has inspired suppliers to up their game. Jack Link's, the American meat snack brand, has recently launched a new product Flamin' Buffalo Chicken Bites that it claims represents a healthier option. It plans to follow the launch with a major support programme aimed not only at building category awareness but at creating a £20m brand within five years.
"Our vision is to be the number three brand in the category by 2012," says Aaron Khattra-Hall, senior brand manager for its UK distributor, Petty Wood. "Jack Link's is a meaty, low-fat, high-protein snack. Our products are ambient, so perfect for a lunchbox."
The popularity of meat snacks among young men is due in part to a wider selection of flavours and NPD, says Chris Owen, Mattessons senior brand manager. "Our Fridge Raiders range now includes piri piri and BBQ flavours," he says.
Instant hot snacks are also ideal for consumers at lunchtimes because of their convenience, adds Neil Brownbill, marketing director for the Princes brand. "The category is experiencing year-on-year growth in both volume and value, which is likely to be down to an increase in consumers joining the lunchbox market and looking for products that offer value for money and convenience," he says.
Princes relaunched its Hot Pots range 18 months ago, pitching them as great-tastingfull meals. Following volume growth of 107% year-on-year, according to Brownbill, new flavours are now on the cards.
Adult consumers are also buying into the more traditional pre-packed sandwich meat sector, which is worth £1.5bn in value and is growing by 5.9% year-on-year [IRI 52w/e 14 May 2011].
"Corned beef is showing value decline, but turkey ham and pork have put in standout performances. Chunky formats are also performing well," says Daniel McGuigan, category management controllerat Bernard Matthews Farms.
He also points to a trend towards smaller pack sizes for cooked meats, and a rise in the popularity of price-marked packs that successfully balance the need for value and convenience. "Value for money is still front of shoppers' minds, but pack and product convenience are becoming increasingly important," he says.
Other suppliers have looked to new formats as a means of increasing usage occasions. Burts Chips, for example, has seen a huge uplift in demand for its multipack crisps, an area traditionally dominated by the mid-market giants.
"Up until recently, multipacks have been the domain of the likes of Walkers and the premium boys haven't done very much, but in recent times we've noticed a huge uplift in demand and, in fact, our most popular seller in Tesco at the moment is our lightly sea-salted multipack," says Burts Chips sales director Nick Hurst.
Premium offerings from the likes of Burts tick the enjoyment box in the lunchbox equation, says Hurst. "It's quite a nice experience to open a decent packet of crisps, have a good crunch and enjoy eating them, rather than opening your lunch, staring at it and thinking, 'I'm not looking forward to any of that'."
The demand among young adults for a fun element in their lunchboxes is also reflected in suppliers' marketing strategies. Mattessons recently held an on-pack competition for consumers to win a pair of trainers in conjunction with its latest Free Running ad. "We saw this as a really nice fit as younger male shoppers are a very active group," says Owen. "The competition generated a lot of interest and entries as our communication lay entirely within consumers' interests."
Milkshake brand Yazoo is targeting the same market, sponsoring the Loaded Laftas, a nationwide search for the new star of comedy run by lads' mag Loaded.
Bel UK is also using comedy to reach out to young adults. It has relaunched its The Laughing Cow brand via a multi-platformcampaign, kicking off the marketing initiative in May with 'Pull The Udder One' video footage of comedian Milton Jones performing stand-up to a field of cows in an attempt to prove they really can laugh. The campaign is being supported by PR, a new TV advert, in-store theatre and promotional activity and represents The Laughing Cow "engaging with consumers on a scale not previously seen by the brand", says Fiona Riches, senior brand manager at Bel UK.
The snacking cheese market, more than most other categories, requires suppliers to communicate appropriate signals. A particular challenge is the need to convey elements of both fun and permissibility, something Kerry Foods' Cheestrings brand has long strived to achieve.
Its latest campaign, Gino's Good Food Fight a consumer awareness campaign featuring celebrity chef Gino D'Acampo aims to talk openly to parents about Cheestrings through social media, in an effort to dispel any negative connotations the brand may have.
"There has been a shift in perceptions of cheese snacking over the last couple of years, but there are still some negative perceptions among parents who may not understand that cheese snacks are cheese and so tend to be very good for their children nutritionally," says Kelly Rafferty, marketing manager at Kerry Dairy.
No-one can accuse Cheestrings of not keeping the brand fresh and interesting in recent years, but its latest innovations have not always hit the mark. Cheestrings Spaghetti has had low penetration since launch (see right) and is due to deliver just over £4m in first-year sales, £3m down from the £7m predicted by the brand at launch. "It's early days. I think it's critical that awareness of the product builds and that takes time," says Rafferty.
Cheestrings has also decided to withdraw Cheestrings Shots after it failed to hit the necessary sales rates. "Shots didn't work because we didn't invest in above-the-line," admits Rafferty. "The market is very branded, and driven largely through advertising, and it is competitively aggressive."
The children's lunchbox category is becoming increasingly sensitive to promotions as families' disposable incomes dwindle. Value sales of Yoplait UK's Frubes brand have remained static after it was forced to increase promotional activity to drive volumes. However, its EDLP brand, Wildlife, has had a good year, with a new TV campaign helping drive 16% growth for the £35m brand.
"We've invested time in getting the price right," says Nicola Dean, category controllerfor Yoplait UK. "The Wildlife brand has tended to rely on being on shelf, so we wanted to make sure consumers were aware of it. The return to the EDLP price of a pound also did really well."
In the current economic climate, effectiveprice positioning is a vital component of the marketing mix, yet the main drivers of children's lunchbox purchasing habits are not going away, says Versha Patel, head of sweet for Premier Foods. "Mums want to provide a convenient, healthy lunchbox," she says. "You've got the government telling you what not to put in your lunchbox, plus you've got the schools themselves and even websites advising parents what to put in lunchboxes. Health is a big part of the equation."
Health by itself, however, is not a silver bullet for a successful kids' innovation as Burts Crisps has found out to its cost. A couple of years ago the brand launched a children's multipack in partnership with Great Ormond Street Hospital, using a recipe free from salt.
"As far as parents and retailers were concerned, it was a fantastic product," says Hurst. "The sad fact is that children thought it was a rubbish idea." The moral of the story, he says, is that if a product tastes bad to children, it won't survive.
Burts is taking a fresh look at the potential for a healthier children's crisp that doesn't compromise on taste. "Hopefully we'll come up with something that's a little healthier but ticks the box in tasting good to children," says Hurst.
Premier's Patel believes suppliers "could do better with lunchbox generally", not just in terms of children's health. Premier is increasingly looking at the format of its lunchbox-orientated products to make them fit more closely with changing consumer needs.
"The formats of some of our Cadbury and Mr Kipling cakes don't really work for lunchbox at the moment," she admits. "Consumers are looking for individually wrapped, hand-held cakes, something that is easy to open and that fits in the lunchbox and that's something we can do better."
Improving the portability of Premier's sweet products is one priority for Patel and her team. Managing portion control is another. "If you look at our slices, you've got to eat two of them and people don't want to," she says.
Confectionery and cakes in general are in decline as lunchbox options, adds Patel, with consumers favouring healthier alternatives such as yoghurts and biscuits. Furthermore, the adult market in particular is increasingly looking for more rounded meal solutions rather than the traditional collection of snacks.
Bakery suppliers, meanwhile, are deviating from traditional offerings in an attempt to maintain interest in bread-based lunches, which still command a 69% share of lunchbox occasions. Allied Bakeries has recently launched Kingsmill 50/50 Pockets, 50/50 Deli Softs, and 50/50 Wraps as "versatile lunch options for adults and children tired of repetitive lunch prospects". Warburtons, meanwhile, has been steadily increasing its portfolio of sandwich alternative products, such as Square(ish) Wraps and Sandwich Thins, in a bid to satisfy the growing need for different lunchbox experiences.
The diverse composition of the lunchbox has historically made merchandisingproducts a difficult task for retailers particularly when the constituent productsneed a presence on their own fixtures. And the conundrum of how to cross-sell products that sit naturally in competing categories has not been lost on suppliers. Two years ago, McCoy's and McVitie's owner United Biscuits launched Project Horizon, a £1m research venture to explore how retailers could further exploit six specific snacking occasions.
One potential solution proposed by United Biscuits is for retailers to show complementary or replacement meal solutions in store. Another, suggested by Premier's Patel, is to capitalise on the back-to-school period for example, by putting relevant products on gondola ends.
Prince's Brownbill recommends steering consumers towards lunchbox products by keeping the items within their traditional fixtures but clearly signposting them as lunchbox-friendly through shelf markers or on shelf-edge labelling.
However, Nick Stuart, commercial directorat UBUK, points to evidence that some retailers are now grouping 'lunchbox' products together on their fixtures. "Retailers will fully be able to exploit the lunchbox opportunity when they successfully offer a full 'meal solution' with all its parts in one place," he says.
The chilled lunchbox fixture has moved closer to the front door and invariably carries alternatives to the retailer's own sandwich offer. "You've got so many more options like sushi and non-carb variants and so many more different price points. That's making it more appealing to shoppers," says Patel.
The growing ubiquity of the 'meal deal' in impulse and at front-of-store locations shows that a bespoke 'lunchbox' fixture can work, according to Stuart.
If the concept can be replicated throughout the store, as he suggests, the long-term opportunities to drive lunchbox occasions through clever merchandising can only increase.
Focus On Lunchbox
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