Towards better bacon
Differentiation is the name of the game in the UK bacon market, as suppliers seek to trade consumers up. Chloe Smith reports
Just as the sausage has been transformed over the last few years from cheap, standard meat product to gourmet foodstuff, bacon is undergoing something of a transformation too.
At the turn of the 21st century, the retail bacon market was dominated by buy-one-get-one-free offers and continual promotions in a market that was flooded with cheap, standard bacon rashers. There was little to differentiate one packet from another, apart from price. Now all that is changing, according to Chris Lamb, consumer marketing manager of BPEX: "The major bacon curers said: 'We cannot carry on competing on price, we've got to move into quality,' and, as such, they have introduced a range of premium lines, packaged differently, presented differently, all with a story of their own to tell. Whether it's under a brand or under a 'Taste the Difference' or a 'Finest' range, they get noticed and they are doing very well." >>
>> Overall consumer spend on bacon has fallen slightly, although the market for different types of bacon is shifting and people are spending more money, less frequently. Consumers now want better-quality bacon. This is supported by data from TNS Worldpanel, which shows the spend on bacon in the 52 weeks ending 28 January was £740,091,000 down slightly by 0.5% from the year before when £743,639,000 was spent
Jan Stryjak, of TNS Worldpanel, says: "Back is still the best-selling cut of
bacon but it is driving the market to a loss of 0.5% on last year. Spend per trip is on the increase, but this has been driven by a rise in the average price from £5.23 to £5.52."
As is to be expected, the multiple retailers dominate the bacon market. Tesco is in the lead, with a 26.2% share. Asda sells 14.7% of all bacon in the country and Sainsbury's 14.6%. Morrisons is next with 11.8%. Butchers have a 4.1% share.
BACK FOR MORE
According to a report by the Meat & Livestock Commission (MLC) into consumers' bacon buying habits, there are strong traditions that keep the British coming back for more. "Bacon is so universally popular, it can almost claim to be part of our heritage," states the report. It is something most of us have grown up with and is regularly bought as a stock item that can be enjoyed as part of breakfast, lunch or dinner.
"Its unique aroma, taste and texture, together with the warm, emotional values it retains, ensures its continued use. The challenge lies in promoting the positive and emotional values associated with bacon. Its contemporary use and values can then be more fully exploited to grow the category further," states the report.
According to Lamb, cheaper bacon will not disappear. Instead, retailers are increasingly competing on different varieties of bacon, rather than slashing prices. Independent retailers are well-placed to stock higher-quality products: "You can opt for rare-breed, you can choose outdoor-reared or you can go for a different type of cure. There are so many ways that anybody can go. It's a matter of looking at the market, doing your own research, tasting and evaluation and then making a decision," he says.
"You can never escape from the value end of things - that always has to be there - but in terms of what people want, they are looking for more quality options, more variety of choice and different types of bacon for different occasions. There is now a good range of quality bacons available in addition to the standard lines and the value lines."
The challenge for retailers is to get people buying more bacon without having to resort to the buy-one-get-one-free promotions. "Two-for-one isn't dying out, that would be overstating it," says Lamb. "But it isn't the dominant feature of the market any more. Where the future of the market lies is to trade people up, in the same way as has happened with sausages."
Promotions are not as dominant as they were in the past, he adds, but in terms of making money, this may not matter: "The volume may not move forward, but the value will," he says.
THE REAL STORY
The real story in the bacon sector at the moment is that people are increasingly wanting a specialist product, with either a specific cure identified or claims such as "outdoor-reared" made for the product. Sainsbury's says it has seen a huge leap in demand for premium bacon and sales of Jack Scaife bacon, produced by Cranswick Gourmet Food, which was introduced to Sainbury's in 2005, have shot up. Guy Hooper, sausage and bacon buyer at Sainsbury's says: "Cranswick and Sainsbury's have a relationship that spans more than 20 years. We worked together to change the perception of British sausages over 10 years ago and we've seen a revolution in the variation and quality of products. Now we want to do the same thing with bacon.
"Since we launched these products 18 months ago, sales have more than tripled and we've recently added outdoor-reared and organic bacon to our range, with encouraging sales. We have very high hopes for the future."
The trend for premium meat has benefited butchers in the same way as the demand for upmarket sausages and free-range meat, but the sales figures for lardons could also prove an interesting opportunity for independents. Sales of lardons shot up an impressive 45.5% year-on-year, growing from £9,113,000 in the 52 weeks ending 29 January,
2006, to £13,261,000 in the year ending 28 January, 2007 (TNS Worldpanel). While it is still a small market, it presents an opportunity.
"If butchers are doing their own curing," says Lamb, "then lardons are a by-product. Butchers may want to sell the lardons in their shop or approach their local Italian restaurant."
This represents a shift in the way people are eating bacon. "Breakfast is still dominant, but is in decline. How many people do you know who eat a cooked breakfast every day? The breakfast occasion is much more now at the weekend, when people have the time to spend on themselves," says Lamb. "You've also got the use of bacon as a snack, so on mid-week evenings, people want something quick, tasty, convenient and filling."
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