Sector Insight: Sweet and savoury spreads

LONDON - To increase sales further, sweet and savoury spreads brands need to come up with extra eating occasions for their products.

Sector Insight: Sweet and savoury spreads

Bees are big news. Last year British beekeepers lobbied parliament for funding to research the phenomenon of colony collapse disorder, which has resulted in the disappearance of large numbers of honeybees from their hives.

If this continues it could have an impact on agriculture in gen­eral - not just honey production - as bees are needed to pollinate many crops.

Nonetheless, sales of honey have been extremely buoyant, rising 13% in the past two years to be worth £76m in 2008. UK shoppers have also acquir­ed a taste for chocolate/nut spreads, trad­itionally a favourite on the Continent. The categ­ory grew 70% between 2006 and 2008, helped by strong advertising from leading brand Nutella.

British consumers clearly enjoy a wide variety of top­pings and fillings; overall the spreads market is relatively evenly spilt between sweet (47%) and savoury (53%) categories. In 2008, the com­bin­ed market was worth £590m, according to Mintel.

Jam is the biggest category in sweet spreads, accounting for a third of sales. However, marmalade has taken a hit, as its customer base is mainly limited to older and more affluent adults, and there has been negligible investment in advertising in recent years.

Conversely, Marmite has produced bold and distinctive advertising with its ‘love it or hate it' campaign, and there is certainly a significant base of shoppers who fall into the ‘love it' camp. More than a third of adults eat yeast-extract products and Marmite engenders strong brand loyalty.

Sandwich filling is a key use of savoury spreads but there could be more opportunities for manufacturers to tap into the snacking segment. Consumption of all spreads is closely linked to bread sales, and fewer adults are eating bread once a day than in previous years, although penetration remains almost total, at 98%.

The value of chilled spreadables, which include pâtés, pastes and sand­wich fillers, has grown by almost 16% over the past two years to £191m.

When it comes to NPD, the wider trends affecting other grocery sectors have also been big drivers in this market. These include sourcing, provenance and fairtrade.

However, spreads also suffer from a perception of unhealthiness: sweet var­iants are seen as being full of sugar, and savoury as having a high salt content. This can work against the sector at a time when people are more aware of the nutritional content of their food.

Nonetheless, spreads have been less badly affected than some categories, as people opt for them on the grounds of taste and quality, rather than their health properties.

Premier Foods' brand Hartley's is the market leader in jam and marma­lade, followed by Andros' Bonne Maman. Hartley's has targeted smaller house­holds and occasional users with the introduction of 250g packs this year. Premier is stopping production of jam under the Robertson's brand to focus on Hartley's.

Honey is increasingly being posit­ioned as a superfood. Products such as Rowse's Active 10+ Manuka honey are claimed to have antibacterial prop­erties and offer diges­tive health bene­fits. Although Rowse is the leading brand, 60% of honey sales are acc­ounted for by own-label products.

Manufacturers have been hit by the restrictions on advertising foods that are high in salt, sugar and fat to child­ren, as well as guidelines on the types of foods that can be served in school canteens and in packed lunches. As a result they have been targeting parents.

However, there is room to expand this category further, with more imaginative suggestions for eating occasions beyond simply being spread on toast at breakfast.

Children under 10 and ABs are among the dem­o­graphics that are set to grow in the next five years, which bodes well for products that are pop­ular with families, such as peanut butter and chocolate/nut spreads. ABs tend to look for quality and naturally sourced ingredients in their products.

By 2014 the total market is expected to be worth £725m, a growth of 7% in real terms over the next five years, according to Mintel.

Sweet spread categories   by value and share

2008 2008 2007 2007 2006

£m  £m  £m  change
1 Jam 96 34 90 35 89 35 7.9
2 Honey 76 27 69 26 67 26 13.4
3 Marmalade 50 18 51 20 52 21 -3.8
4 Peanut butter 28 10 26 10 25 10 12
5 Chocolate/nut spreads 22 8 17 7 13 5 69.2
6 Fruit/cheese curds 4 1 4 2 4 2 -
7 Syrup/treacle 2 1 2 1 3 1 -33.3

Total  278 100 259 100 253 100 9.9


Savoury spread categories   by value and share

2008 2008 2007 2007 2006 2006 %

£m  £m  £m  change
1 Chilled spreadables  191 61 193 63 165 60 15.8
2 Cheese spreads 77 25 69 23 70 25 10
3 Meat, yeast and 44 14 43 14 40 15 10

vegetable spreads

Total  312 100 305 100 275 100 13.5
Source: Mintel


Spread manufacturers   by value and share

2008 2008 2007 2007 2006 2006 %

£m  £m  £m  change 
1 Premier Foods 43 29 35 25 34 24 26.5
2 Andros 19 13 17 12 16 11 18.8
3 Wilkin & Sons 11 8 10 7 9 6 22.2
4 Streamline Foods 9 6 10 7 10 7 -10

Other 6 4 11 8 13 9 -55.1

Own-label 58 40 58 41 59 42 -1.7

Total  146 100 141 100 141 100 3.5

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