The total bacon market in Britain is now worth more than £1.2bn (Kantar Worldpanel, 52 weeks to 20 February 2011). Volume is up by 3.4% over the last year and it has grown by about 2% in value terms, slightly less than the total fresh and chilled market (Kantar Worldpanel, 52 weeks to March 2011).
The main driver for this growth appears to be heavy promotion by the major retailers, with shoppers taking advantage of multi-buy offers and price promotions. There has also been a general trend of increased pack sizes across the sector, which targets the cost-conscious customer.
However, Richard Cullen, consumer insight manager at the Agriculture & Horticulture Development Board (AHDB) thinks the market has held up very well: “It is actually performing better than you would have expected,” he says. “As a processed pork product, it has added-value and is therefore slightly more expensive than pork would be. But it has done very well in the market and continued to do well throughout the recession, managing to maintain growth for the last two or three years when you would expect added-value products start to see a decline.“
Rashers and joints
The majority of the bacon industry is dominated by the rasher, which makes up 72% of the sector by value or 67.9% by volume. Bacon rashers continue to be shopping basket staples, up 4.4% by volume over the last 52 weeks with a rise of 1.9% in value over the same period (Kantar Worldpanel, 52 weeks ending 20 March). This has flattened slightly over the last 12 weeks, but volumes remained buoyant, up by 1.7%.
Although rashers make up the bulk of the market, the big stars of the sector are bacon and gammon joints, which make up 22% of the market by volume. With growth of 9.9% by value in the 52 weeks to 20 March (5.5% in volume) rising to 13.8% (9.6% in volume) in the last 12 week, bacon joints are bucking the trend for joints across the meat sector.
“Joints generally haven’t been exceptional over the winter, but bacon joints have been consistently good,” says Cullen. “A bacon joint is fairly competitive against most other joints; it’s much cheaper than beef, slightly cheaper than a pork leg joint and there’s not much of a differential between that and a whole bird. The average price is probably £4.87/kg, so with an average joint of between 500g and 750g – unless you’re buying a really big piece of meat – you’re getting a good size piece of meat for a pretty reasonable price.”
Tina Mulholland, product manager at Bpex marketing, agrees, noting that people are utilising joints in much the same way as a Sunday or as a midweek roast. However, Rob Smith, group communications controller at Vion Food Group reports that lack of knowledge on how to cook gammon remains an issue, particularly among younger customers. As a result, these consumers are actively seeking added-value products to compensate for a lack of recipe ideas.
The strength of gammon has been largely due to renewed focus from the retailers. This has succeeded in attracting new shoppers to the market, who are buying more frequently. However, there has been a knock-on effect on gammon steaks – which were down in value terms by 1.5% and grew in volume by just 1% – as well as chops, according to Kantar Worldpanel.
Cullen worries about the level of promotion that has already contributed to price inflation. “There are figures flying about that say it’s about 40% of all sales are now on promotion,” he says. With the market dominated by the four big retailers, whose collective market share makes up around 65% of total UK bacon sales, this has a huge impact across the industry.
“Bacon did manage to reduce [its bill] slightly over the last year, but it has gone and increased it again this year. Unless they do something about the off-promotion retail price, this will be unsustainable in the long-term. The markets won’t be able to cope,” he says.
Bacon rashers will always be a perennial favourite at breakfast, but it is increasingly viewed as a treat and tends to be restricted to weekends. According to Kantar Worldpanel’s Pork review September 2010, bacon consumption at the weekends is double the daily weekday figures.
Bacon sandwiches make up a large percentage of rasher volume during the week and, although sandwich consumption in general has been waning in the last year, bacon sandwiches are increasing. However, it is the evening meal that has seen the greatest growth as shoppers wake up to its potential at different meal opportunities.
“Over a third of all bacon occasions are now accounted for by the evening meal,” says Mulholland. “One of the things we wanted to communicate [with Bacon Connoisseurs’ week was that] it could form the centre piece of a good value family meal, as it works so well with pasta and rice or risotto.”
Cullen agrees: “It’s a protein that people can add to a meal occasion, so they are getting something other than carbohydrates and the cost is kept down.”
Perhaps as a result of the change in consumers’ approach to bacon, there has been a polarisation within the market, with standard and premium ranges growing at the expense of the value products. Consumers seem to be trading up the tiers, attracted in part by bacon’s in-built feel-good factor and a desire to return to a simple, comforting food.
“We frequently hear that people want bacon like it used to taste, which means traditional cuts and thicker-cut bacon.” says Mulholland. “It was a middle cut of bacon that took the title of winner of the overall Bacon Connoisseurs’ competition, so obviously there’s some appetite for more traditional cuts.
“We are seeing people become a little bit more discerning in their choice,” she adds. “Obviously, value comes into it, but I think people are starting to understand that value for money is more than just the amount they actually pay, it’s the product they get,” she says. “We’re emerging from those wilderness years of pack upon pack of bog-standard bacon.”
The small independent sector has also seen steady progress. Fergus Howie, managing director of independent bacon producer Wicks Manor, agrees: “That market hasn’t changed much over the year – the recession hasn’t really hit it. We did see a bit of a dip last November, when there was a bit of a scare on bacon and ham, but it has been growing steadily over the last two years. There seems to be more opportunity about at the moment than there has been in other years.”
Cuts and cures
Dry cure has also made a resurgence in recent years, along with a proliferation of different flavoured cures and types of specialist smoking. This development seems to have originated in the foodservice and premium sector and filtered outwards. Tony Goodger, Bpex Foodservice trade manager, notes that caterers are more willing to name the type of cure they are putting on the menus than they were a few years ago.
“What we’re starting to see – and it has probably been driven to a certain extent by the popularity of farmers’ markets and farm shops – are more artisan bacon producers. Their skills are appealing particularly to the independent pub/restaurant sector, who are prepared to source the different bacons and put them on their menus. Bigger businesses tend to take their lead from what the independent caterers are doing and are now following suit.”
“The most frequent one we see coming through now is sweet-cure. In the past, it would have just been on the menu as ‘bacon’,” he says.
The recent Bacon Connoisseurs’ Week, organised by Bpex, highlighted the variety and innovation in the cures that bacon producers across retail and foodservice are using to add an extra dimension to their bacon. More than 230 entries across the sector showed the wide variety of innovative cures, from whisky barrel-smoked bacon, bacons marinated in old ruby ale, black-treacle and maple cures, to dry-cure chestnut streaky bacon as well as classics such as traditional Wiltshire cures.
“A key premise of Bacon Connoisseurs’ Week was to communicate the message that not all bacon is the same,” explains Mulholland. “We hope that by promoting the quality end of the market, we can produce a halo effect on the overall category, and encourage consumers to be a little bit more discerning in their purchase.”
Back bacon remains the rasher choice in the UK, but streaky is also doing extremely well. Goodger maintains that this is good news from a sustainability point of view. “We have a surplus of streaky in this country, but we don’t have a surplus of back,” he says.
“In the past, chefs have bought back bacon and then ended up cutting it up into small pieces and using it as an ingredient when they’re not using it as a centre-plate protein. I think they’ve realised that it was a bit of a false economy, so they are now looking to use more streaky bacon.”
Howie agrees: “Streaky is used by a lot of chefs as a pancetta and seems to be getting a bit more trendy. Also, if people are on a bit of a budget, they buy streaky rather than back.”
One of the other innovations noted by Mulholland is the development of some interesting British pancettas on the market and a growing momentum for local, quality produce: “The British pig movement has made a huge impact on people being more aware of where they’re buying their meat from,” says Howie. “It is making [retail and foodservice] much more conscious of what they’re buying, what they’re selling, and where they’re sourcing from.
“More people are becoming more aware of quality products and I’ve been surprised at how strong the local sales are – and also that large companies are coming into the market and trying to source products with local provenance.”
Mulholland agrees: “Animal welfare and provenance are increasingly important considerations for consumers and the premium bacon market is perfectly situated to take advantage of this. It’s 98% British, usually evidenced by the Red Tractor, so people can have both assurances on the product at point of purchase.”
Although healthy concerns – particularly over the salt content of food – has been moving up the agenda since 2006, this has had a relatively low impact on the bacon industry over the last year. As Mulholland points out: “You can’t have bacon without salt and I think that most consumers just get that. It’s not a product they eat every day, it’s not a product we encourage people to eat every day. So like everything, it’s a product you eat in moderation. Those products exist and for those people who need to buy them for health reasons, they will continue to exist, but they are a very tiny part of the market. “
With a fairly solid year behind it, the prognosis for bacon looks relatively healthy. Cullen is optimistic: “People are interested in the different cures and they are buying them and trying them, but they tend to be slightly more expensive and that tends to be for a special occasion. But that seems to be the way the market will continue to show growth – by developing those areas and giving people alternatives.”
It is widely expected that the premium category will lead the way for the bacon market to emulate the success of sausages. As Cullen points out: “Probably a third of all sausages are now premium sausages, which is over half the market in volume terms. Bacon is well behind that, but there is an opportunity to build on that area and drive it.”
It seems that Britain may bring bringing home the bacon after all
Imports and exports
Pigmeat production in the UK increased by 8% year-on-year, with 7% more pigs slaughtered in January 2011 than in the same period last year. With the national herd at 9m pigs and bacon consumption in the UK at the equivalent of 24m pigs, the UK remains a strong net importer of pigmeat. Bpex market intelligence identifies this as a long- term trend, which has seen domestic breeding herds decline steadily over the past 15 years.
The UK bacon deficit currently runs at 288,000t. Imports were down 3% during 2010, with more than 81% of imported bacon coming from Denmark and the Netherlands (Bpex Market intelligence, March 2011).
Imported bacon accounts for nearly three-quarters of the standard and value market, while around 98% of the premium market is made up of British bacon.
Supermarket domination: Tesco is the biggest bacon retailer, accounting for 24% of the entire UK bacon market, up 3.1% year on year. Both Marks & Spencer and Sainsbury’s strengthened bacon sales over the year, with growth of 16.1% and 9.5% respectively (Kantar Worldpanel, 52 weeks to February 2011)