Bacon Report: Healthy drivers
While the bacon category has remained relatively static in the past year, a number of factors are keeping it popular with shoppers, finds Oli Haenlein
While the bacon sector remains steady, with sales of £1.3 billion (52 weeks ending 4 January 2015, Kantar Worldpanel), it has failed to post value growth and, in fact, has seen marginal decline. This has been put down to shoppers buying less bacon per trip, which resulted in a volume decline of 0.7%.
However, the decline is minimal, with bacon’s total value dropping 0.1% year on year, and household penetration standing at 88.7%. Furthermore, bacon is outperforming total fresh meats.
Tulip’s senior category marketing manager Sonia Armanet is positive about how bacon is faring: “Bacon evokes strong emotional associations – for example, dad cooking breakfast on a Sunday, staying with friends or eating a full English in a local café; its enticing smell appeals to all.” She continues that the strong associations and usage versatility led to increased purchase frequency (+1.2%) across own-labels in the 52 weeks ending 1 February.
Kantar Worldpanel data shows that, within the bacon market, while steaks saw growth of 2.6%, rashers saw 0.3% decline and joints 0.2% decline. Joints suffered most with a 10% fall in value, although the sector only has a 0.3% share of total bacon. Bacon rashers accounted for 71.5% of the total bacon market, followed by joints (18.6%), steaks (9.5%) and finally steaks.
Waitrose, Aldi and Lidl have performed best in the category, at the expense of the big four, butchers, and Marks & Spencer, according to Kantar. The consumer insights company explained: “The discounters now make up over 10% of the bacon market driven by strong growth in the rashers category. In particular, butchers have performed poorly this year (-9.4%) driven by falling shopper numbers, with steaks declining at -12%, rashers at -10% and joints at -7%.”
Tesco, Sainsbury’s, Asda and Morrisons maintained the largest bacon market value shares, at 23%, 15%, 14% and 11% respectively. However, all saw decline, while Waitrose, Aldi and Lidl saw considerable growth, at 15%, 34% and 19% respectively.
The supermarkets are seeing increased sales of their own-brand products. Tulip’s Armanet explains: “There is a growing disparity between brand and own-label performance. Brands, accounting for 12% of all bacon sales, have seen sales declining -15.1% in value and -14.2% in volume in the last 52 weeks, as consumers switch to own-label equivalents due to increased promotional activity across the own-label offering.”
Tulip tells MTJ that own-label bacon has shown strong growth in the past 12 months, up +2% in value and +2.4% in volume terms, with the strongest area of growth coming from the healthy tier. Both premium own-label (11.4% of total OL) and standard own-label (62.4% of total OL) tiers are driving growth in the market, as consumers trade up for special occasions or switch across to standard tier, enticed by ‘two for £X’ promotions.
There is also growth in ingredients, with lardons out-performing the total category (+16.3% in value and +25.4% in volume). Bpex says bacon is finding success as an ingredient in foodservice too: “Bacon not only meets customer demand during the breakfast occasion, but adds value to a multitude of menus – from quick-service to fine dining. It is hugely versatile and delivers a real punch of flavour as well as texture to a range of dishes.”
Low-salt, low fat
The healthy tier is up +28.5% in value and +39.2% in volume as health-conscious consumers seek out reduced-fat and reduced-salt options, according to Tulip. Bacon medallions are benefiting from this trend towards healthier options (+20% in value and +29.8% in volume) as they offer up to less 50% fat than standard bacon rashers.
Bpex says research shows that, over the past 20 years, healthy eating has become an important driver for shoppers’ consumption decisions. “Consumer purchasing habits have changed quite rapidly”, it adds.
Demand for healthier options is high and the public is constantly being told to decrease its salt intake. Ian Ritchie, UK sales director for TMI Foods, the UK arm of Dawn Farm Foods, explains the dilemma, as well as his company’s approach: “Salt is a functional ingredient of bacon and is there for a purpose. While consumers are consciously watching their salt intake, they are also demanding full flavours and lower salt products that actually still deliver on taste.
“No one wants to eat a tasteless product. So we address this both proactively and reactively, according to the needs of our customers. It is important to approach salt reduction in stages. We have been working on reformulating our range of cures to reduce the number of preservatives and levels of salt in bacon, without compromising taste.
“It’s always a difficult balance to strike – we still want the end-product to be bacon and taste like bacon, and you have to retain a certain amount of fat, salt and preservatives in order to achieve that. We source the best pork bellies available from selected UK and European suppliers. By sourcing these leaner cuts of meat and investing in precision curing, we have been able to drive healthier options which still deliver distinctive tastes.”
Bpex says the sector is becoming increasingly good at creating products that can satisfy health-conscious customers who also want a product with good eating quality: “Bacon and ham curers are introducing low- or reduced-salt products without sacrificing taste and quality. Bacon, in particular, has undergone a ‘makeover’ with reduced-salt levels as the pork industry helps to meet consumer demand for healthier eating.”
However, the pig board adds that bacon products developed with health-conscious consumers in mind still remain a small share of the total rasher market at 7.6%.
Tulip has launched a new 30% reduced-salt version of its Danepak brand. Armanet says: “We use a ground-breaking curing process featuring the pioneering use of Iposol, an innovative sea salt solution developed by Iposol GMBH, which is an industry first and ensures the unique flavour and eating experience that Danepak bacon currently delivers is maintained.
“The new Danepak bacon will completely replace our standard version over the coming weeks and we are confident that, due to the growing consumer demand for healthier bacon, our reduced-salt product will help drive sales in the branded bacon category.”
Bpex tells Meat Trades Journal that the premium tier is performing strongly: “In 2014 premium sales grew by 13.8% compared to 2013 figures. This trend has been mirrored in premium bacon steaks and joints both recording year-on-year increases in value (91% and 36.2%) and volume (48.2% and 45.5%) respectively.”
The organisation explains there has been an increase in choosing products based on enjoyment, while previously, shopping habits would have been based on practicality (ease of cooking). This could be one of the reasons behind the rise in premium.
TMI’s Ritchie says: “As the market continues to develop and grow, inevitably innovation will lead to more premium offerings. This can take the form of heritage statements highlighting particular sourcing of raw material, or premium cures using more unusual flavours. We are constantly looking at opportunities for development with our cures – the strength and flavour of the smoke or cure is important, varying from subtle to really powerful, depending on the product usage or build with other components.”
Kantar Worldpanel provided MTJ with data showing how we are using bacon in the home. Bacon is in decline at lunch and evening meal occasions and, most of all, snack occasions, dropping 10% year on year at the 52 weeks ending December 2014.
However, breakfast bacon occasions are on the up, rising by 6%. More than 703 million breakfast occasions featured bacon, with 453m of those taking place on the weekend.
Bpex butchery and product development manager Keith Fisher says: “When it comes to pork-based breakfasts, while sausages are increasing in popularity – perhaps thanks to innovation in the sector – the bacon rasher remains the star, appearing in over two-thirds of occasions. Not only is it quick to prepare and can be eaten on-the-go, a satisfying and tasty bacon breakfast just hits the spot for many consumers.”
Bacon has proven to be a big seller in foodservice, and is seeing strong growth. According to market research company NPD Crest, within the total out-of-home sector, pig meat is the largest protein and accounts for 27.7% of all protein servings. Bacon accounts for 24.8% of all servings, primarily driven by the importance of bacon within the breakfast eating occasion.
Bacon delivered an extra 90m servings year on year (52 weeks ending September 2014), primarily due to growth in quick-service restaurants (QSRs), travel and leisure, and the workplace.
Tulip’s director of foodservice solutions Simon Shirley says: “Bacon continues to remain an incredibly popular choice, with consumers looking for a tasty treat to eat while out of home, with more people eating breakfast out of home as the cost of a cooked breakfast is relatively low due to the number of outlets offering special morning deals.
“However, there is also a growing trend to use bacon as an additional topping to ‘premiumise’ standard products – burgers for example – which is also helping to drive bacon sales in the foodservice sector. As the economy continues to recover, consumers are increasingly eating out of home, with affordable breakfasts adding to the eating-out options for busy people on the go.”
NPD data for the 52 weeks ending December 2014 shows that total bacon servings grew by 9.4% year on year, with bacon sandwiches becoming increasingly popular; servings were up 12%, driven in particular by weekday consumption.
Fisher says: “We know that bacon accounts for the largest share of total pig meat eaten out of the home and, while driven by breakfast, there is opportunity to further grow its use across the sector in general. What is important here is to remember that thicker, leaner and premium rashers offer better cooking and eating qualities. Choosing bacon produced to assured food standards, such as Red Tractor, will undoubtedly enhance customer confidence too.
“The Red Tractor Pork logo, for example, indicates the quality and country of origin of the pork, that it has been produced responsibly to rigorous standards, is traceable back to Red Tractor farms and independently inspected at every stage of production, providing reassurance to consumers.”
Bpex says it has been encouraging consumers to rethink gammon, to appreciate its versatility throughout the year, not just at Christmas. It has been promoting recipe ideas like ‘Jerk Gammon’, ‘Gammon Florentine’ and ‘Gammon, New Potato and Broad Bean Salad’, “to highlight the opportunity gammon presents to produce exciting and cost-effective dishes”.
The works seems to be helping gammon to succeed, as the last 12 months have seen a 1.85% uplift in total gammon expenditure to more than 567,000 tonnes, while market penetration currently stands at 54.19%.
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