Firm favourite

As red meat takes another round of battering in the press, and sales across the fresh-meat sector fluctuate, the nation’s love affair with the great British sausage seems set to continue, despite gloomy summer weather during key barbecue months, the continued squeeze on household budgets, and rising pork prices.


The overall sausage market has shown great resilience over the last 12 months, growing in volume by 2.5% and up in value by around 3%. In the 52 weeks to 
7 August, nearly 135m kg of sausages were sold in the UK, worth around 
£517m — an increase of 4.4% from the same time last year (according to 
Kantar Worldpanel). 


Although the standard end of the market has grown slightly, as customers seek to make economies, the increase 
in sales has been primarily driven by the premium sector. Having grown steadily 
in recent years, this now commands 
just under half the share of the market, having increased by nearly 5% over the last year alone.


Cranswick sales and marketing director Jim Brisby puts the growth 
of the sector — and premium sausages in particular — down to the good value that sausages offer as a choice of protein. “Fundamentally, even premium sausages represent very good value for the family,” he says. “The higher you go up the quality spectrum, the faster the market is growing, which is pretty encouraging considering we are in a recession.”


In comparison to other proteins, sausages still provide a very competitive price for a family, a fact that has been of particular importance as households feel the squeeze as the cost of living rises. However, the relatively low prices offered by sausages mean that many customers choose to trade up to a better-quality, higher profile flavour sausage, without increasing their spend prohibitively. 


Simon Twigger, Sainsbury’s director 
of fresh meat and frozen foods, says sausages have been driven by slight increases in frequency and the amount of product that people are buying. “We’re seeing good growth in the premium end of the market as customers get more involved with the flavours and quality sausages can give them,” he says. “We have a very strong own-label business led by Taste the Difference, which accounts for over 40% of our sales and therefore drives our particular business, but we have also seen growth in the Basics range and in frozen sausages. We launched Butcher’s Choice into frozen and have seen good performance in that area.”


In addition to frozen sausages, convenient microwave sausages across the sector also grew by around 13.6% year-on-year, although they still represent only a tiny fraction of the total market. 
It is the supermarkets — in particular the Big Four — that continue to dominate the sector, commanding a collective market share of around 76%. Perhaps 
as a result of this, there has been considerable promotional activity within the category with regular 2 for X activity. As Matthew Southam, senior retail & consumer insight analyst at AHDB, notes, this does have an effect on people’s buying habits.


“Around this time last year,” he says, “Tesco changed its sausage promotion from 2 for £4 to 2 for £5 and we saw a little blip in those sales when they did so, as people did notice that. At the moment consumers are very conscious of price and looking for promotions, so it does represent a good-value pricing for that evening meal.”


However, Brisby points out that, even without promotion, sausages offer a 
good-value choice. “The headline price 
at sub-£3 is still pretty enticing and offers good value for a meal centre,” he 
says. “It’s also a safe bet with the family. Everyone likes sausages and everyone is cooking from scratch more so they make a very good option.”


With this in mind, it is perhaps unsurprising that market penetration has increased, with at least 68% of all households buying sausages in the last 
12 weeks to 4 August (Kantar Worldpanel). Spend has also risen, with consumers prepared to spend more per pack than they were a year ago — on average, an extra 26p compared to the same 12-week period last year. The average price now paid has risen to £3.53, up 4.4% since last year. 


Southam says there has been a significant move towards new flavour combinations across the board. “If you looked at the sausage category only a few years ago, you wouldn’t see anything like the range of flavours you see now,” he says. “It’s a way of differentiation and encourages people to try sausages more at the evening meal if there’s a flavour combination that sounds appealing, rather than just having a standard sausage.”


Bpex data puts the meal occasions featuring sausages at 854m meals every year, placing sausages ahead of both chicken and minced beef. It is the evening meal that is driving this change, with more than 48% of sausages now eaten at this time while the remaining occasions are spread fairly evenly between teatime (18%), breakfast (16%) and lunch (16%), with snacks accounting for only 2%. 


“It’s really all about getting wholesome food back on the table and going back to scratch cooking.” says Brisby. “People are more educated in terms of what they expect from a sausage and are far more adventurous with flavours — particularly around barbecue seasons, which is a key period for expanding the types of products they’re willing to buy.”


Barbecues


Sausages have long formed the backbone of summer barbecues, featuring in 52% 
of all barbecue occasions. However, after the coldest summer since 1993, this took a hit in the peak months, with sales dipping slightly in the 12 weeks to 
7 August. However, this was balanced by 
a 10% upsurge in sausages volume sales during March, April and May, which provided a bumper weekend for barbecues, due to the combination of good weather, a late Easter and the Royal Wedding bank holidays. 


Unfortunately, the Rugby World Cup 
in New Zealand was unable to repeat the cheering effect of last year’s World Cup, due in part to the early kick-off. As Southam points out, “We do see a strong correlation between the World Cup and barbecue occasions. For the last two World Cups we’ve seen a higher spike in summer due to increased barbecue occasions when it has been on.”


Although barbecues undoubtedly 
give sausages a boost, business is not reliant on good weather. As Brisby 
points out: “People buy sausages week in, week out. They are kept in the fridge 
and they are generally always there, 
so we don’t see a massive departure when the weather is not great, even though inevitably you will sell more when the sun is cracking.”


He points to the enduring popularity and versatility of sausages, which ensure their year-round appeal. Halloween and Bonfire Night are bumper sausage events, while Christmas and Easter see chipolatas, cocktail sausages and bacon and sausage rolls sale grow. TMI Foods reported a 5-7% increase in sales of their pigs in blankets products, although the market tends to be highly seasonal. 


On average, shoppers spend only 
24 seconds at the fixture, with one-in-four taking a mere 10 seconds to add a pack 
of sausages to their basket. With such a simple decision tree, Charles Baughan, MD of Westaway Sausages, points out 
that the appearance and labelling are key. “People will see what sausages look like,” he says, “particularly in terms of a premium sausage, so they need to look premium — they need to have visual lean showing in the product. If it has herbs in it, they need to see them, but in addition to that, people like to know where their food comes from.”


Chris Lamb, Bpex’s head of marketing agrees: “Clearly, repeat purchase is a factor, but with people spending little time at the fixture, in-store promotions and on-pack messaging need to be clear 
if the sausages are to perform well. Making consumers aware of the quality of ingredients through the use of assurance marks, including the Red Tractor logo, is a valuable way of doing so.”


Pig Prices


While the rising production costs of pigmeat has had some effect on the price of sausages, the major knock-on effect affects fresh pork sales to a greater degree. Over the recession, pig meat has become more popular, as the price of other protein has increased more sharply. There have been renewed calls for retailers to pay pig producers higher prices as many are still operating on a negative margin, but the squeeze on the consumer RPI has made many companies reluctant to pass prices on.  


According to Baughan, producers have had to increase efficiencies across their production in order to continue to compete while prices fluctuate. “Since pork really started to increase in price in 2008, we’ve had to work incredibly hard as a company and probably as a sector, looking at every angle and aspect of business in terms of the costs that 
we have — are they adding value to 
the product?”


He concludes that companies which are first to market with new and innovative concepts, which listen to the their customers and come out with compelling offers obviously retain a competitive edge.


Future growth


With regard to the future, Tim McCaughey, Asda’s bacon and gammon buyer, says that the sausage sector should continue to see strong growth: “I expect the competitively priced sausage market to perform well over the next 12 months,” he adds, agreeing that premium will continue 
to lead the way, with opportunities for low-fat/low-salt sausages. 


Baughan agrees, identifying an opportunity for established regional suppliers to co-brand with supermarkets to provide a superior degree of provenance and regionality into the mainstream offering. 


“The trends are about heritage, provenance and charisma,” he says, 
with brands increasingly offering those types of traditional values. “I think 
people are looking for a way to have an emotional tie-in to the brands, where you know where the pork has come from and are given some assurance in terms of welfare, as well as a degree of charisma 
— and that can be from a supporting a charity that they know, or local food 
for local people.”

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Fresh sausage analysis by Kantar Worldpanel

The sausage market in Britain was worth £517m in the 52 weeks to 
4 September 2011. Annual growth is of 4.4% in value and 2.3% in volume, driven largely via shoppers buying more frequently, more regularly 
and at higher prices.

British households are being encouraged to buy 
in greater volumes through Y for £X deals, which have become more prevalent in the last 52 weeks. The largest increase in promotional activity comes in premium sausages, as retailers are encouraging shoppers to trade up.


Premium is the largest sector, accounting for about 48% of sausage sales, and is in growth, with value up 4.4% and volume up 4.9%. Standard is the second-biggest sector and accounts for 46% of all sausage sales. Standard also sees the strongest performance, after microwave sausages, with a value growth of 5% and volume growth 
of 1.6% as shoppers are paying more.


In terms of retailers, Tesco continues to hold the largest market share, accounting for 32.6% of sales. Of the big four supermarkets, only Morrisons and Tesco extend their market share by performing ahead of the market, while Sainsbury’s and Asda are underperforming.

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The case for casings

Although research has shown that the majority of consumers spare little thought to the casings that sausages come in, 
the sausage market is inextricably liked 
to the fortunes of casings, both natural and synthetic.


Demand has been very high, but natural casing companies have found times difficult over the last few years, primarily because of  a lack of raw materials. The industry is governed by availability, and with global sheep slaughtering down across the board, this has been decreasing year-on-year, pushing prices ever upwards. 


At present, the premium gourmet market is dominated by natural casings, primarily sheep-derived. However, collagen use is increasing and is now widely used 
for the second tier of premium sausages, often known as ‘butcher’s choice’ sausages, as well as throughout the standard end of the market.


The synthetic market has been more buoyant and seems to be confident of anticipated growth. Devro, the leading synthetic casings manufacturer, reported strong interim results in August, with a turnover of £107.1m in the half year — up 2.4% on the previous year. A few months earlier it had brought out a 
new collagen product, Select, which was designed to overcome some of 
the appearance and bite problems often associated with collagen 
casings and persuade more manufacturers to move toward using synthetic casings.

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British 
Sausage Week

British Sausage Week provides a great opportunity for retailers to push sales of sausages, when the industry-wide marketing campaign kicks off on 31 October. Now in its 14th year, the annual event is organised by Bpex to highlight the quality of great British sausages and celebrate the nation’s fondness for them. 


Last year, the week generated media coverage worth more than £14m, and was estimated to have reached every person in the UK seven times over. This year, the Bpex team is hoping to top that, having timed the week to coincide with Halloween and Bonfire Night and capitalise on the autumnal feeling as the clocks go back and people start to crave comfort food.


Bpex head of marketing Chris Lamb says: “British Sausage Week is one of the biggest awareness weeks of its kind in the retail calendar. Of course, pan-industry involvement help makes British Sausage Week a success, and this year we are hoping to encourage even more support. Many butchers and retailers make use of point-of-sale and artwork materials, as well as introducing their own activities and promotions. This year, our Legendary Banger competition has received record entries. The winners will be announced from 31 October with the help of our British Sausage Week celebrity ambassador, Noddy Holder.” 


In addition to the retail competition for butchers, farm shops, sausage brands and multiple retailers, the catering trade has its own dedicated ‘Bpex Foodservice Pork Sausage of the Year Competition’, with five different categories to reward the wide range of sausage varieties being served up in restaurants, pubs, schools and hospitals. 


Rock legend and Slade frontman Noddy Holder explains why he wanted to get involved. “I really like sausages,” he says. “My mum was a great cook and we were brought up on that kind of simple fare, but sausages have become a lot more sophisticated now, with different flavours and lots of things you can add to them. It’s part of promoting local produce — and British produce — as much as anything else.


“It’s time for the British to wake up a bit. We’re getting better all the time at developing our cooking skills so I think it’s time we stood up for British produce as much as possible and try and encourage people to buy British. A lot people have the wrong idea that sausages contain a lot of rubbish, but if they’re made properly and if people look for the Red Tractor label, they’re guaranteed to get a very good product with lots of vitamins and lots of fibre.


“We also have a recipe book out for Sausage Week that has various twists on everyday recipes, such as toad-in-the-hole, which has been crossed with a savoury bread-and-butter-pudding that is absolutely great. I’m a pretty handy chef and I do look for unusual stuff like that. I like cooking simple things but cooking them well, with good ingredients. It’ll be a great experience trying all the different flavours and new flavours,” he adds. “I think that’s what I’m looking forward to more than anything else. We’re going all around the country, hitting about three different cities a day, so it’s quite a comprehensive cover. We’re covering a lot of ground and giving people a chance to submit their recipes, so I think it’ll be really enjoyable.”

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