Retailers agree that the value of the market could be raised by an emphasis on premium lines
Many believe one way to haul bacon out of the doldrums would be to put more emphasis on premium lines. Get shoppers to trade up and pay more for higher quality, and margins for everyone are improved, or so the theory goes.
This is working well in other categories. In sausages, for example, TNS data shows that 30% of all value sales are accounted for by premium products [52 w/e July 17, 2005]. In own label prepacked bacon, however, the corresponding figure is just 5% [52 w/e September 11, 2005].
Richard Lowe, marketing director at the MLC, believes the way retailers physically merchandise premium bacon is part of the problem. “If you look at a typical bacon fixture, you get value or economy on the bottom shelf, then standard on
the main shelf above this, and then the premium on top.
“But, I have to say, I’ve been in some stores where you need to be six foot three even to see the premium bacon.”
Asda’s bacon buyer Paul Armstrong admits retailers bear some responsibility here. “We are guilty, but it’s a difficult trade-off. When you are selling massive volumes of your core product, you have to give that the bulk of shelf space. You’ll have your core ranges in the
middle.”
There are also concerns that even premium bacon is under pressure from the low price agenda. TNS data shows that 35% of premium own label pre-pack back rashers were sold on promotion last year, compared with 11% the year before.
Robert Smith, MD at the Dutch Meat Board, says this approach by retailers won’t encourage people to trade up; it simply trains them to flit around the fixture looking for the deal of the moment.
Some believe the only sure-fire way to generate loyalty to premium bacon is to make sure it really is better than the standard product.
Direct Table Foods’ Richard Hawkins says: “We must produce a premium product that is tangibly different.”
Sainsbury’s Guy Hooper agrees: “If we want to raise the total value of the market we will need to present customers with a better product that they are willing to pay more for.”
It’s not just about taste - packaging is also important. Grampian’s marketing controller for bacon Nigel Glendinning says: “The consumer not only wants to taste the difference, but also wants to be able to see the difference.”
Helen Browning, who sells organic bacon under her own name in Sainsbury and Waitrose, says: “Bacon is a product everyone wants to eat and you don’t need to sell it at such a low price. You can sell on quality. We know this because, in general, once people have had our bacon they don’t want any other bacon.”
But premium brands remain niche. For the category as a whole to recover its zest it needs to generate excitement about premium own label.
And some believe this can be done. John Howard, marketing director at the Danish Bacon and Meat Council, says while 40% of bacon rashers are sold for under £5/kg, the remaining 60% sell for between £5/kg and £12/kg. “This provides a solid platform on which to encourage more consumers to trade up to higher quality products.”
Many believe one way to haul bacon out of the doldrums would be to put more emphasis on premium lines. Get shoppers to trade up and pay more for higher quality, and margins for everyone are improved, or so the theory goes.
This is working well in other categories. In sausages, for example, TNS data shows that 30% of all value sales are accounted for by premium products [52 w/e July 17, 2005]. In own label prepacked bacon, however, the corresponding figure is just 5% [52 w/e September 11, 2005].
Richard Lowe, marketing director at the MLC, believes the way retailers physically merchandise premium bacon is part of the problem. “If you look at a typical bacon fixture, you get value or economy on the bottom shelf, then standard on
the main shelf above this, and then the premium on top.
“But, I have to say, I’ve been in some stores where you need to be six foot three even to see the premium bacon.”
Asda’s bacon buyer Paul Armstrong admits retailers bear some responsibility here. “We are guilty, but it’s a difficult trade-off. When you are selling massive volumes of your core product, you have to give that the bulk of shelf space. You’ll have your core ranges in the
middle.”
There are also concerns that even premium bacon is under pressure from the low price agenda. TNS data shows that 35% of premium own label pre-pack back rashers were sold on promotion last year, compared with 11% the year before.
Robert Smith, MD at the Dutch Meat Board, says this approach by retailers won’t encourage people to trade up; it simply trains them to flit around the fixture looking for the deal of the moment.
Some believe the only sure-fire way to generate loyalty to premium bacon is to make sure it really is better than the standard product.
Direct Table Foods’ Richard Hawkins says: “We must produce a premium product that is tangibly different.”
Sainsbury’s Guy Hooper agrees: “If we want to raise the total value of the market we will need to present customers with a better product that they are willing to pay more for.”
It’s not just about taste - packaging is also important. Grampian’s marketing controller for bacon Nigel Glendinning says: “The consumer not only wants to taste the difference, but also wants to be able to see the difference.”
Helen Browning, who sells organic bacon under her own name in Sainsbury and Waitrose, says: “Bacon is a product everyone wants to eat and you don’t need to sell it at such a low price. You can sell on quality. We know this because, in general, once people have had our bacon they don’t want any other bacon.”
But premium brands remain niche. For the category as a whole to recover its zest it needs to generate excitement about premium own label.
And some believe this can be done. John Howard, marketing director at the Danish Bacon and Meat Council, says while 40% of bacon rashers are sold for under £5/kg, the remaining 60% sell for between £5/kg and £12/kg. “This provides a solid platform on which to encourage more consumers to trade up to higher quality products.”
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