An enduring love affair
British consumers love their bacon and producers are making sure they nurture that love by tapping into consumer lifestyle trends - and adapting the product accordingly. Chloe Smith reports
It was at IFE last month that Dame Deirdre Hutton, the Food Standard Agency's (FSA) chairman, addressed VIP guests about the agency's latest campaign against salt. Partnerships with the food industry were key, she said, and regulation was the wrong way to go about it and she praised the way manufacturers had risen to the challenge. She was speaking just days before the latest FSA advertising campaign was launched, in which consumers are asked, "Is your food full of it?"
For the bacon sector, this has been a real challenge, but in the face of heightened consumer awareness, they have reacted. Bacon is a very popular product, almost ingrained in the nation's eating habits and manufacturers have taken action to make sure it stays that way. This can be seen in the increasing variety of premium bacon products, better quality, with better packaging and labelling.
The value of the market has held up reasonably well. According to data from TNS Worldpanel, the total spend on bacon in the 52 weeks ending 28 January was £740,091,000. This is down 0.5% year-on-year, when the value of the market was £743,639,000. Richard Hawkins, sales director of Direct Table Foods, says the bacon sector should be pleased with the figures: "That is a great feat in a marketplace where we could have been hit quite hard by the publicity over salt content. In the face of that, we've managed to maintain the sales value of the bacon market."
The industry has reduced salt, says Hawkins, but there is only so much that can be done: "Most people appreciate that bacon is produced using salt and that is an inevitability. We produce a low-salt bacon but we cannot escape the inevitable. We'll restrict bacon as much as we can in terms of its salt content, but ultimately, your product is compromised, both in terms of eating quality and, as importantly, in shelf life. We are offering healthy eating options in terms of reduced-fat and reduced-salt, but salt is a part of the process."
Robert Smith, head of marketing and communications at Vion, agrees: "On one level you've got a simple choice. You either respond to demands or you don't play the market. Over the years, the levels of salt in bacon have come down significantly. But it's an ongoing process and it's one where the industry - which, a few years ago, was very much production-driven in a 'we produce this, now where can we sell it' kind of way - has had to move to be a much more market-led business.
"Consumers are demanding lower salt, the FSA is playing along, and retailers respond to that. So we
respond to those demands and we have adapted and continue to work on that area," he says.
As well as reducing salt, the other major trend in the bacon market is the increasing variety of bacon.
The days of smoked or unsmoked as the only choices are long gone. Direct Table Foods supplies Sainsbury's with own-label bacon, but is producing products that, not too long ago, would have been strictly for the niche, premium end of the market. "The consumer now recognises that there are bacons you can buy that will give a better eating experience. That's about adding less water, adding more natural ingredients such as sugars, honey, natural maple syrup, and improving the eating experience," says Hawkins. "What's driving it is the consumer being given a wider variety of products and that's witnessed at Tesco. If you look at Tesco's range they've got more space, more lines and a significant number of premium products in that range. It's all about trying to add value through natural ingredients and natural methods of curing. There is the opportunity in bacon to replicate what has happened to the sausage, where regionality and heritage are key factors in consumer decision-making. We obviously try to differentiate our product in that way," he adds.
Pre-packed rashers are by far the biggest part of the market, representing 87% of the total, according to data from the British Pig Executive (BPEX). But although specific premium lines are a minority of bacon sold, the standard and quality of bacon across the board is rising as consumers expect more and more.
Smith says: "In every part of the market there is a trend towards quality, because even in economy lines, there are increasing demands in terms of food safety and standards of production. A standard product now, compared to a few years ago, is a leaner, more highly trimmed product. It's a very simple case of keeping the customer satisfied and producing
what the market requires and it continues to demand higher standards. Those who want to play in the market have to satisfy those demands. So for Vion, the continuing goal and the day-to-day target is to deliver and drive
Vion is a Dutch bacon company, and supplies mainly into the standard bacon market. Smith says that although premium is growing, retailers favour smaller, British producers over imports for its premium ranges.
"A number of retailers have determined that the premium sector is for British products and so it's either exclusively British or dominated by British products. For Vion, the part of the market where we have the
biggest share is in the standard back rasher market."
Out of the multiples, Tesco leads bacon rasher sales, with a 26.2% share of the market, according to data from TNS Worldpanel. Asda is second, with a 14.7% share, closely followed by Sainsbury's, which has a 14.6% share. Morrisons accounts for 11.8% of the market.
Joints and steaks are still a small part of the bacon market compared to rashers, which, according to data from BPEX, represent around 70% of bacon sales. Joints hover at around 20% and steaks around 10%. This is a missed opportunity, according to Hawkins, and lessons can be learnt from how bacon rashers and sausages have improved in recent years: "We need to get people buying into gammon joints and gammon steaks," he says.
"A lot of people will have recollections of their mother soaking a gammon joint overnight to try and reduce the salt content, but the reality of it is that the product is very user-friendly. It doesn't need soaking any more, it's not as salty as it used to be and it's a good meal option. It just needs roasting or boiling and it's a great value meal. We need to convey those values more clearly.
"We've also got a proliferation of added-value gammon joints. We seem to gear up to gammon joints at seasonal peaks and we don't really make that effort outside those peaks. So the challenge for us is to get more people to purchase gammon joints
and steaks outside seasonal peaks.
That's one of the areas we are looking to develop."
Packaging and labelling are an important tool to promote gammon joints, he argues, just as they have been to promote rashers, and other lessons can be learnt from rashers as well. "It's no longer enough to offer up smoked and unsmoked. We need to be looking at speciality cures for gammon joints, which are a minor part of the overall bacon market. We can grow the
market by being more innovative with those products.
"The bacon rasher can only be improved so much; we have to look at gammon joints and steaks and I hope we can innovate in a way that will bring consumers back into that area. I think it has been neglected," he says.
In 2004, Direct Table Foods suffered a devastating fire that wiped out its factory in Bury St Edmunds. Hawkins is happy to report that the company's new, replacement facility is doing >>
>> well. "We've quickly managed to
re-establish ourselves," he says. "We are probably producing about 700t of bacon products a week. We've done well with the new plant and picked
up a substantial amount of business relatively quickly from retailers and elsewhere. So the new plant is running better than we ever expected."
But back to rashers - and, more specifically, branded bacon rashers. Danepak has recently undergone a revamp with a press and poster advertising campaign, featuring Danish pig farmers, which emphasises the family businesses that make up the majority of Denmark's pig industry. Data from TNS Worldpanel suggest it has been a success, with a growth in sales of 46% over the last year.
"All the people that feature on our packaging and in the advertising campaign are real," says Fiona Clayton, brand development manager of Tulip, the parent company of Danepak. They are all genuine pig farmers and it is typical of a farming co-operative."
The Danepak offer has changed
from what was on the shelf 12 months ago, says Clayton. "There are two products that we have launched," she says. "One is Danepak Traditionally Matured, which is a dry-cured bacon, hung for 10 days, so you're getting development of much fuller flavours and a more meaty eat in a rasher. The other is Tulip's Deliciously Danish, which is still produced with conventional manufacturing methods, but produced so it is addressing the issues of cook-out and shrinking rashers. Part of that is there's less water in the finished product."
These two products target two buyers, she says. "One group of people buys into bacon for practicality, and those consumers might be attracted by a lot of the price deals that have been typical of the category in the last few years, so their agenda has been quite well-satisfied. The standard offers
on the shelf will continue to satisfy those consumers. The other half is buying product more for enjoyment and that's their drive - looking for a bacon product that will deliver and satisfy, whether that is your ultimate bacon buttie or traditional breakfast. Those are the more discerning customers who want to find a bacon that will deliver.
"The Danepak product is very much about pitching at those consumers who are buying for enjoyment and the Tulip product are for those buying for practicality," she explains, attributing the relaunch to Danepak's falling sales. "We were starting to lose consumers," she says, explaining that buy-one-get-one-free offers were dominating the market. >>
Yet despite the positive stance, Tulip has recently taken the decision to close one of its factories in Thetford, Norfolk, with the loss of up to 350 jobs. Union representatives are now in negotiation with management to see if anything can be done to minimise the job losses. Peter Judge, managing director of Tulip's north-east division, said at the time: "While we have tried very hard to return the site to profitability over recent years, it is over 40 years old and has inherent infrastructure and environmental issues that make it uncompetitive in today's marketplace.
"Consolidation is critical if we are to establish Tulip as the lowest-cost producer in the UK. We have invested significantly in first-class production facilities around the country and, as a result of the proposed consolidation, we will be able to offer our customers excellent facilities built around customer and consumer needs."
The 90-day consultation period with Union representatives will end in June and it is hoped some workers will be given jobs at other sites in
It just goes to show that, while the Danepak brand relaunch is proving successful, all is not plain sailing for the major bacon producers, and the promotions and offers that drove the market are still playing a reduced, but significant role. Several years ago, promotions were very much the defining feature of the bacon market. With increasing differentiation, that has fallen, but it still plays a large part in selling standard lines.
According to data from TNS Worldpanel, consumers are spending more money on bacon, with average spend up from £5.23 to £5.52 per trip year-on-year.
Smith thinks that although the number of price promotions has fallen, they are still a vital part of standard bacon retailing. "Promotions are still a major part of the business," he says. "Pre-packed back finished the year with just under 40% on promotion, but earlier in the year, it was more than 50%, so although the numbers of promotions have dropped, they've fallen from a very high level, so they are still hugely important."
Retailers recognise that, says Smith, and have "started to vary the mechanics they use for promotion, whether that be buy-one-get-one
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