consumer category report - ahdb pork · the expense of the main shop. according to a recent igd...

DECEMBER 2015

The Online Challenge for Red Meat

www.pork.ahdb.org.uk • www.lovepork.co.uk • www.AHDB.org

• Chilled ready meals continue to register strong growth on the back of shoppers buying more often.

• The amount of chilled main meal accompaniments also registered strong gains, again led by shoppers buying more often against a backdrop of lower average retail prices.

Top-up shopping

Wider Category Movement

CONSUMER CATEGORY REPORTOnline grocery sales will more than double in the next five years, according to recent research by the retail trade body IGD. It will see its annual share of grocery shopping rise from the current 5.0% to 8.6% by 2020 adding over £8bn worth of additional sales.

According to Kantar Worldpanel, online sales of fresh red meat were worth £215.7m and accounted for 5.8% of total market sales in the year to November 2015. Online expenditure grew by almost 9%, just behind the total grocery online growth at 11%.

Looking at online red meat performance by protein, beef is experiencing the strongest

expenditure growth of 13%, driven by volume growth of 11%. Pork also enjoyed good volume growth of 7% though, as average prices were down 5%, this meant that overall expenditure online was only up by 2%.

The profile of pork sales online by cuts, shows that mince strongly over indexes, accounting for some 10% of fresh pork expenditure compared to almost 5% at total market level. The stronger performance of mince is not surprising given that it is used for easy meal solutions.

• Deflation is impacting the red meat market as with other grocery categories as prices as a whole are down and even promotional discounts have increased.

• Retailers are reacting to the deflation by changing the promotional landscape, out go some multi-buys and, increasingly, in come price reductions and round pound deals.

• The Hard Discounters continue to increase their presence in the category, particularly as they fight for share in the fresh and chilled sectors. We are seeing the discounters bringing in more premium products at much lower prices than other retailers, attracting the savvy shopper and driving the switch in losses in most categories.

Retailer Overview

0

20

40

60

80

100

41.7

4.921.8

31.6

43.8

9.9

20.4

25.9

Total Market Total Online

RoastingOtherMinceFrying/grillingExpenditure

Share %

52 w/e 8 Nov 2015 Value (£m)

Value % (+-)

Volume % (+-)

Chilled Ready Meals 1,547 6.9 7.1

Frozen Ready Meals 426 -1.5 -3.0

Chilled Main Meal Accomps 1,235 5.9 11.0

Fresh Burgers & Grills 310 4.5 6.1

Frozen Burgers & Grills 204 4.5 1.5

Ready To Cook 387 -8.5 -10.8

Fresh Pulled Pork 30 17.9 18.0

• In line with this growth in chilled products, fresh burgers and grills have seen an increase in sales year-on-year, primarily due to shoppers switching into the category from sausages and fresh pork.

• Chilled food items tend to have a higher average price than frozen, and more affluent shoppers are the core demographic for these products. Improved household budgets may see a continued movement to chilled meal options.

According to IGD, Convenience is one of the growth channels for grocery in the next five years alongside Online and Discount. The growth in convenience is closely linked to changing shopper behaviour as top-up shopping gains importance at the expense of the main shop. According to a recent IGD report, almost as many people claimed to have conducted a top-up shop as did a main shop.

72% of respondents claimed that top-up shopping was most beneficial for the purchasing of fresh products, making it the most important reason followed by: it was less tiring, saves time and helps to reduce food waste. On average, shoppers are conducting nearly two and half top-up shops per week, or ten a month. Convenience stores remain the most used format for top-up shopping, however, supermarkets actually come out as being more popular when it comes to top-up shopping for fresh food.

83% 87% 95% 91%

Top-up shopping Main shop

Shopping missions conducted in last month across any channel

Indictaes low sample size

Source: KANTAR Worldpanel 12 w/e 8 Nov 2015

Total Pork | Spend Share %

Source: KANTAR Worldpanel 52 w/e 8th November 2015


Fresh Beef Fresh Lamb Fresh Pork Fresh Chicken

Share of Fresh Meat 12 w/e 8 Nov 2015

Grocery Share

Fresh Meat and

Poultry Share

ValueShare

Actual Value % Change

Value Share

ActualValue % Change

ValueShare


ValueShare


TOTAL MARKET 100.0 100.0 100.0 0.1 100.0 6.1 100.0 -8.9 100.0 -0.5

Top 4 Multiples 63.5 59.8 60.3 -5.9 57.3 -0.2 64.7 -11.5 57.5 -4.9

Other Multiples 17.7 15.4 14.9 -0.4 15.0 15.4 10.3 -13.0 19.0 -2.9

Total Independents & Symbols

1.1 0.7 0.5 12.1 1.6 44.6 0.4 -20.5 0.7 3.8

Total Butchers 0.6 8.0 8.5 -9.4 13.2 -3.2 8.1 -13.0 5.5 -5.0

Market Stalls 0.3 0.6 0.6 -32.8 1.2 2.3 0.6 -26.0 0.5 -13.7

Total Hard Discounters

8.8 13.3 13.0 47.7 9.2 71.1 13.4 15.0 14.9 20.6

All Other Retailers 8.0 2.2 2.3 60.4 2.4 -2.0 2.5 0.7 1.9 68.0

2 CONSUMER CATEGORY REPORT December 2015

KPI Movement• Expenditure on fresh pork

in 12 weeks to 8 November was down due to a fall in the amount of product being purchased and at lower average retail prices than a year ago. The overall trend is similar to the annual picture with volume losses being driven by a reduction in the number of households purchasing fresh pork and the frequency of purchase. Consumers switching out of fresh pork remains the major challenge as shoppers switch to categories like fresh chicken, despite a narrowing price gap.

Key Movement by Cuts • Pork chops/steaks continue to

be the cut where the biggest volume losses are occurring, followed by roasting joints. A fall in household penetration of 9% despite a 5% fall in average prices was the key driver of the volume decline.

Volumes will also have been impacted by a fall in the number of volume driving Y for £X promotions. Roasting joints also registered a drop in sales volumes with falling penetration once again the key performance driver. Mince and pork ‘Other’ mainly marinades were the only cuts to see an increase in sales as both experienced an increase in promotional activity year-on-year.

Pork: In-home Useage Viewpoint• More positive outlook for

grocery this quarter as the decline of in-home consumption has stabilised, while eating out is still showing good growth no doubt helped by increased consumer confidence levels.

• Overall, meat meal occasions are down, driven by a fall in in-home and carried out lunch occasions.

• Growth of health continues, albeit at a slower rate. Growth across all macro needs suggests increased consumer engagement.

• Roasts return to growth with beef roast occasions increasing most significantly in terms of actual occasions, pork is also up 3%. Indeed, pork roasts account for more occasions than in November 2013 for the first time.

• In-home, the decline of pork cuts and dishes continues at the rate of 8.1% year-on-year. This is driven by decreased consumption of frying/grilling chops and steaks.

Expenditure on sausages was down 5.5% to just over £164 million in the latest 12-week period. Almost all categories have seen a fall in volume sales, with premium followed by standard sausages contributing the biggest volume declines despite a drop in average prices against a year ago.

The only category growth is in low-fat, which has seen volume sales increase by 36% year-on-year driven mainly by more households purchasing the category.

The YouGov Healthy Eating survey (September) showed that 55% of all respondents ate sausages for breakfast, but 34% are looking to reduce saturated fat in their diet. It may be that shoppers are switching to this category as a result.

Shopper spend on ham was down 5% in the latest 12-weeks as a fall in average prices managed to drive only marginal volume gains.

The Hard Discounters continue to perform strongly in this category and accounted for a record volume share of 16.6% in the latest period. The increase in the number of households buying from this channel drove most of the gains, with just over 20% of GB residents having bought ham here.

The performance of ham is closely related to the continuous fall in sandwich consumption with the introduction of free school meals being a contributing factor to this trend.

Sausages

Ham

UK MARKET SNAPSHOT

Fresh Pork: 12 weeks ending 08-Nov-15 Actual Yr on Tr % Change

Spend (£000) 178,643 -8.9

Volume (000 Kgs) 38,108 -3.7

Average Price (£)/(Kgs) 4.7 -5.3

Penetration % 50.1 -5.1

Frequency 3.1 -2.3

Volume per Trip (Kgs) 0.9 2.8

Marinade sales

Total Ham Sales £256,689,000

-5.0%

Total Sausage Sales £164,234,000

-5.5%

Volume Sold (000kg) 39,796

-3.5%

Average Price per kg £4.13

-2.1%


-5.4%

Volume Sold (000kg) 30,218 0.4%

+8.3%Pork Sausages

+5.5%Bacon

+8.5%Eggs

+21.6%Ham

-0.8%Bread

+19.7%Baked Bean

BREAKFASTYOY % Change

• Compared to other proteins pork is more reliant on consumption at the evening meal/teatime. Re-engaging consumers is key.

• Adults 45+ are key drivers behind the decline and should

be the first point of focus as they account for the biggest losses.

• The decrease among small two person occasions is the strongest in terms of actual occasions.

• While declining overall, bacon, sausages and ham continue to see healthy growth at breakfast as consumers are more engaged with these products at this occasion.

Source: KANTAR Worldpanel 12 weeks ending 08-Nov-15

Source: KANTAR Usage 52 w/e 13 Sept. 2015




On 26 October 2015, a global announcement was made from the World Health Organisation’s specialist cancer research unit, IARC (International Agency for Research on Cancer) stating red meat was probably carcinogenic and processed meat was carcinogenic to humans.

The announcement dominated the British and global press generating headlines such as ‘Sausages Give you Cancer’. Some media went a step further and likened processed meats to tobacco – as they both share the same IARC classification – resulting in headlines such as ‘Eating Bacon is as Big a Cancer Risk as Smoking’.

IARC classified sausages within the processed meats category, defining ‘processed’ as “…meat that has been transformed through salting, curing, fermentation, smoking, or other processes to enhance flavour or improve preservation,” a definition more suited to sausages from the continent, such as chorizo, salami and frankfurters, than fresh British sausages.

In the UK, the majority of sausages are made using fresh meat, so should not be included in the processed meat category. However, this did not stop news outlets focusing on this inaccurate definition, resulting in sausages being used prominently within many items of coverage. AHDB Pork plans to work on British sausages being accurately classified going forward.

Given the release of the above named report there has naturally been much interest around the impact on consumer demand. The latest 4-week sales data to 8 November from Kantar Worldpanel showed that, while bacon and sausages were behind at a total market level, it was not a trend which can be applied across all ‘processed’ products and indeed retailers, and therefore one cannot accurately assess the impact, if any, on sales performance. At this stage, it is too early to assess whether there will be an effect of the IARC report on consumer buying behaviour, but it is something that AHDB will be monitoring.

IARC Report

Having been broadly stable through the spring and summer, GB pig prices have started to fall again since September. The GB APP (EU-spec) averaged just under 132p/kg in October, over 24p lower than a year before.

By early November, further falls had taken the APP below 130p/kg for the first time, meaning prices are now at their lowest level for over 7 years.

UK pig meat production remains high, with output in

DAP 2013 DAP 2014 APP 2014 APP 2015

130135140145150155160165170175

Jan

Feb

Mar

Apr

May Jun

July

Aug

Sep

Oct

Nov Dec

Pricing

UK MARKET SNAPSHOTUK MARKET SNAPSOTCONTINUED

Bacon spend in the latest 12 weeks is down 7.1% as volumes were down, despite lower average retail prices as consumers not only shopped the category less often but when they did they bought less.

Promotional levels are slightly lower than a year ago and there has generally been a move away from volume driving Y for £X activity in favour of price promotions.

All cuts bar chops saw volumes fall with joints followed by steaks, and in both cases, not only did fewer households buy them but those that did bought less than last year.

Bacon

Total Bacon Sales £211,499

-5.4%


-1.5%


-4.1%

In the latest 12-week period, gammon has seen a fall in key metrics compared to the same period a year ago.

Household expenditure fell by some 13% on the back of volume loses of just over 10%

despite average retail prices being some 2% lower this year.

The number of households buying gammon has dipped to 28%, down some 2% points compared to the corresponding period a year ago.

Gammon Total Gammon Sales £53,700

-13.0%


-11.8%


-1.3%

the first 10 months of 2015 4% higher than in the same period last year. This has been met by a relatively subdued domestic consumer market. Low EU prices have also added pressure to those in the UK. However, with feed prices also relatively low, there is so far little sign of producers scaling back production.

EU pig prices have also been relatively stable for much of the year, fluctuating around €145 per 100kg, a much lower level than was typical in recent years. However, in recent weeks, prices have dropped and further falls are anticipated in the short term. With the euro remaining weak against the pound, the EU price has been even lower in sterling terms, meaning the UK price premium has averaged around 30p/kg.

Source: AHDB




British Sausage Week 2015 – Sausages of Distinction

IF YOU WOULD LIKE TO USE OUR NEW PULLED PORK PHOTOGRAPHY PLEASE CONTACT THE TEAM VIA THE CONTACT DETAILS BELOW

Jane Chapman – Food Chain Team Manager 07810 658741Sukhvinder Gill – Consumer Insight Manager 024 7647 8672 Websites: pork.ahdb.org.uk, lovepork.co.uk

AHDB Pork, Stoneleigh Park, Kenilworth, Warwickshire CV8 2TL

Kantar Worldpanel Sales.

4 weeks ending 24th May 2015.

Additional sales of fresh

pork and added value pork

products generated directly

by marketing campaign,

excludes all price promotions.

Kantar Consumer Mix Model

July 2015

AS A DIRECT RESULT OF THE

MARKETING CAMPAIGN

£7.8MMORE FRESH

PORK SOLD

206,000MORE HOUSEHOLDS

BOUGHT FRESH

PORK SHOULDER

VERSUS LAST YEAR

YPULLED

PORKPULLED

PORKPULLED

PORKPULLED

PORK

ARE YOU READY TO

PULL NEXT FEBRUARY?ARE YOU READY TO



PULL NEXT FEBRUARY?

BACK ON TV FROM The

10th Feb to 9th March

after a successful campaign in 2015

IN BRIEF

From the supermarket, local butcher or eaten in the pub, the nation’s best bangers were applauded and awarded during the 18th annual British Sausage Week.

Taking place 2-8 November, the competition sought to find sausages of distinction which could grace any plate on any occasion. 750 entries were received from across the industry; from independent butchers to processors and the major supermarkets.

Michel Roux Jr, one of the world’s most endearing and well-respected chefs, acted as ambassador for this year’s competition. With a name synonymous with quality, a passion for food which can be enjoyed by all and, most importantly, a true sausage aficionado, Michel certainly put some sizzle into British Sausage Week.

More Buck for your Banger! In celebration of British Sausage

Week 2015, butcher Kevin Turner, from Aldershot, created the world’s most expensive sausage. Made from the rare Mangalitsa pig, considered ‘the Kobe beef of pork’, the superior sausage was dubbed the ‘Magnificent Mangalitsa’ and, at a whopping £37.00 each, was one hundred times the cost of the average sausage (0.35p).

This posh banger was made using only the finest ingredients from all over the world, including black truffle shavings, powdered Cep mushrooms and Valdeon Picos Blue cheese which had been matured in Spanish caves. The meat of the Mangalitsa pig, which was marinated in Cockburn’s 1947 Vintage Port, is revered by Michelin chefs around the country because of its dark colour, intense flavour and health benefits due to the high unsaturated fats.

consumer category report - ahdb pork · the expense of the main shop. according to a recent igd...

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