Out to lunch
The revival of packed lunches has had a big impact on the cooked meats market, boosting value sales while putting pressure on premium products. Carina Perkins reports
As the world wakes up from the slumber of carefree consumerism to the cold, stark reality of recession, consumers are reluctantly returning to the money-saving habits of old.
One noticeable example of this is the recent revival of the humble packed lunch. With the luxurious lunchtime offerings of trendy high street eateries now a distant dream for many of the nation's workers, homemade fare is back in vogue and, in the word of one commentator, "Sandwiches are the new sushi".
Since 63% of cooked meats are used in sandwiches, this sandwich-making resurgence has had a profound effect on sales of cooked meats, boosting the value sector but causing premium sales to plummet.
Market over £2bn
According to data from TNS Worldpanel, the cooked meats market is now worth around £2.2bn. Volume sales dropped by 2% in the 52 weeks leading up to 22 March 2009, but retail prices remained 8% higher than the previous year, pushing the value of the market up by 6%. Sales have remained strong in the recession, with 94% of UK households still buying cooked meats, but the sector has not escaped unscathed from the economic climate.
"From our own research on usage and attitude, we know that 85% of cooked meat shoppers are concerned about the effects of the recession," explains Chris Tune of Vion. "The majority of customers claimed they had not yet altered their buying of cooked meats, but in reality, we are already seeing major changes in the way they shop." TNS data shows that sales of premium products have dropped by 6% over the past year, while value sales have rocketed by 34%, suggesting that consumers are not only buying more on promotions, but trading down to lower tiers. Richard Cullen, AHDB Meat Services category manager, says the willingness to trade down can be explained by a change in the way people are eating their cooked meats. "People have started making their own packed lunches again and they are more likely to use a value ham in a sandwich," he says. "If they have ham in their sandwiches, then they are less likely to want to have ham in a salad or meal for dinner, so premium sales are down."
Consumer willingness to trade down demonstrates the difference between cooked and fresh meats in shoppers' minds. "Recent media campaigns have not affected consumer preferences in cooked meats to the same extent as that of fresh meats," explains Tune. "Less than 1% of current cooked meats are attributable to free-range, organic or outdoor-reared and bred meats."
This does not mean that consumers do not care about issues, such as welfare and provenance, when it comes to cooked meats. A recent BPEX report showed that 54.4% of consumers prefer to buy British when they can, with country-of-origin ranking only behind taste and appearance for standard and premium buys. When it comes to value ham for sandwiches, however, price wins out above all. "Our research shows that consumers still want to buy British and concerns about provenance and welfare are growing, but shoppers are being forced to trade down, and they accept that value lines will be produced from imported meat." says Cullen.
Provenance is still important in some areas of the market. By switching its entire turkey range to 100% British turkey, leading brand Bernard Matthews Farms has managed to regain some of the consumer confidence that was lost following the 2007 outbreak of bird flu at its Suffolk farm. "Provenance is incredibly important to consumers," explains marketing director Matt Pullen. "All Bernard Matthews Farms products, including our cooked meats, have clear country-of-origin statements printed on the reverse label, helping the consumer to make an informed choice and have confidence in Bernard Matthews Farms." Pullen agrees that price is still winning over welfare, however. "Our 'best' tier represented our free-range products, which have struggled in the current climate. So we have focused our attention on our 'good' and 'better' tiers," he says.
The resurgence of sandwich-making means that even premium processors are having to develop cheaper lines. Steve Pearce, managing director of Southover Cooked Meats, says the packed lunch revival has had a big impact on independent foodservice outlets. "The constant flow of bad news means that people are being much more cautious on their spending and a lot of the coffee shops and garden centres we supply are suffering a bit," he says.
In a bid to ease costs for its customers, Southover has developed a cheaper Grange Gammon range, which is made using the same cure as the company's other hams, but is slightly reformed. The ham is pressed into a consistent shape before cooking and curing to guarantee consistency and help businesses maintain strict portion control, thus improving margins. "A lot of our customers are choosing this product because it promises quality, but is more affordable than some of our other lines," says Pearce.
Change of emphasis
The impact of the recession can be seen in the type of meat bought, as well as the tier. Spend on corned beef, for example, rose by 21.8% in the 52 weeks leading up to 22 February 2009, as a result of promotions, while duck sales plummeted by 87.6%. Ham is still the favourite sandwich filler, with spend up by 6.9% year-on-year, with chicken and turkey the next biggest sellers. Tune says that Vion's biggest sellers are Crumbed Hams and Honey Roast Hams, while Pullen says some of Bernard Matthews' simple flavour extensions, such as Wafer Thin Turkey Ham, are doing extremely well. "Simple flavour extensions account for 37% of the prepared cooked meats market (52 weeks to 21 March 09), so this is clearly an area of opportunity," he says. Pearce agrees that ham is the always the favourite sandwich filling, with chicken and turkey next and beef in last because "it is just not that popular among women, who tend to assume it is higher in fat."
The fastest-growing sector within the pre-packed cooked meats category is Continental meats, which experienced a 6.3% growth in volume and an 8.8% increase in spend - from £137m to £149m in the 52 weeks to February 2009. "Continental meats are faring reasonably well in the recession, largely because they are primarily premium products purchased by consumers who have a greater spending capacity, and so are less affected by the economic climate," says Cullen. "They are more price-sensitive, but unless directly affected, they do not make big changes to their spending habits," he explains.
Continental meats also tend to be bought for a special occasion, a salad or a tapas snack and so are less affected by the movement back to lunchtime sandwiches. "Continental meats are eaten with bread, not in bread," comments Cullen. This is particularly true for Spanish meats, which are starting to steal shelf space from the better-established German and Italian varieties. Having grown in popularity after cheap flights to Europe saw increasing numbers of Brits feasting on tapas in the Spanish sunshine, Spanish meats are now attracting recession-hit "foodie" consumers, who are abandoning restaurants and looking for something extra special to serve at home. With considerable publicity from celebrity chefs, Spanish meats such as Iberico Bellota ham - made form acorn-fed 'pata negra' pigs that forage the ancient dehesa - are considered more exotic and premium than their tried-and-tested Italian counterparts.
"In the current economic climate we have seen consumers are becoming increasingly likely to entertain at home, rather than going out," says Jane Bentley, marketing controller of Smithfield Foods. "This will often result in customers trading up, buying a nice bottle of wine and some premium supermarket products to have at home. Spanish meats, such as chorizo and premium Spanish hams, fit exactly into the type of food consumers would move to in this thought process." Spanish meats are still relatively niche, with a 10% share of the deli meat market, but the sector is growing rapidly. In the 52 weeks to October 2008, sales of Spanish meats grew 20% year-on-year to £21m.
Another growth area is Polish meats, driven by the recent increase of East European migrants in the UK. In response to increasing demand for Polish produce, Smithfield Foods launched a range of traditional Polish cooked meats last year, including traditional Berlinki, Slaska, Pyszne, Wyborczka and Grenada sausages, as well as Polish Boczek. Smithfield hopes the products will appeal to non-Polish consumers too, explains Bentley. "With a growing interest in Continental meats, more and more consumers are willing to try different products and we feel sure that they will be very popular with UK shoppers," she says.
Robert McAfee, who set up Kabanos - a company which manufactures Polish cooked meats for supermarkets and independent grocers in Ireland, Scotland and Wales with Polish cooked meats - says that he has been "immensly encouraged by the interest shown in the sausages and meats".
Polish meats are much cheaper than Italian and Spanish sausages and hams, which could boost their future appeal to consumers. As Cullen points out, people are still buying Continental meats, but will become increasingly price-sensitive as the recession hits home. "If Continental meats are too expensive, even the wealthier consumers might start leaving them on the shelves," he warns.
The latest development in cooking technology is direct contact cooking, such as that offered by the Formcook Contact Cooker from Interfood Technology. The cooker has two teflon belts, which run between heating plates, transferring heat directly to the product. It allows the processor to tailor the product to specific requirements. Different volume requirements can be accommodated through belt widths, ranging from 440mm to 1,500mm, with the adjustable heating plate height allowing product up to 200mm high to be cooked.
Cooking times can be adjusted from 20 seconds to 10 minutes, with a temperature range of up to 260?C - via independent control of each heating plate - supplied by an electric or thermal fluid oil heat source. "The cooker heats the product very quickly and a major advantage is that you can feed product directly from the forming machines, which you cannot do in batch cooking," explains Ken Mossford, Interfood's cooking and cooling specialist. Scrapers and high-pressure water ensures continuous cleaning of the belts, which are automatically controlled for tension and tracking.
The contact cooker is designed for products such as bacon, chicken and burgers rather than sliced cooked meats such as ham. Processes for cooking sliced cooked meats are fairly well established and have not changed much over time. Mossford says that there are three main processes used in the sector. The first is batch-cooking in ovens, which is the method most widely used in the UK. "Most of our sliced, cooked meat customers use batch cookers that are trolley-loaded with front and rear doors that lock separately to enable cooked and uncooked areas to remain separate," he explains. Meats are loaded into the cookers in batches, where they are heated to the core temperature of 72?C and removed and cooled. "The major advantage of batch cooking is that it gives a good deal of flexibility for processors who have a range of products with different shapes and cooking times," says Mossford.
A second option is the sous-vide cooking process, offered by Armor Inox's Thermix system. The Thermix system is a completely automated cooking, cooling and chilling process, which requires no operator intervention. Hams are simply loaded into moulds and lowered into vessels, which are then flooded with hot water. Once the optimum temperature is reached, the water is drained and replaced with cold water and then brine. The Armor Inox system is extremely efficient, producing large volumes with very little manpower. "If you have one size of product, then you can cook large volumes of meat efficiently," says Mossford. "The disadvantage is that it does not lend itself to being able to cook a large range of products at the same time."
The third option is continuous cooking, which is more widely used on the Continent than in the UK. For this process, product is continuously fed into a cooker on belts. "Again, this process lends itself to big volumes of continuous size and shape. It does not offer much flexibility and the sheer size of the machinery means space is often a problem," Mossford explains.
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