What s driving the breakfast bonanza?

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2 What s driving the breakfast bonanza? So far 2013 has been dominated by food safety and horse puns, but beyond the continuing scandal and DNA testing, the breakfast market has been bristling with activity. Brits are traditionally thrifty in the mornings, with the average consumer spending just 43p per breakfast in However, health, convenience and indulgence are becoming increasingly prominent drivers as manufacturers diversify into new formats to target specific breakfast opportunities. It is commonly suggested that breakfast is the most important meal of the day and yet it s the one we re most likely to skip; Kellogg s estimates that we miss 2.6 billion breakfasts every year. Those of us that do manage to eat in the mornings do so at speed; in % of consumers wolfed down breakfast in under 10 minutes. Manufacturers have responded to our increasingly busy schedules by investing in on-the-go formats such as porridge pots and breakfast biscuits. Indeed, the breakfast biscuit market has skyrocketed, growing 148% in value this year as companies look to capitalise on convenience. However, the traditional sit-down breakfast is by no means a thing of the past and Kingsmill has developed its Fruit & Fibre range to deliver an innovative and healthy twist to bread-based breakfasts. Many manufacturers are bolstering their health credentials following governmental pressure and consumer demand. Kellogg s has introduced 3 new lower sugar children s cereals following a drop in sales of the mainstream brands. The 2013 / Q1 2

3 advertising ban on sugary products during children s TV and increasingly health-conscious parents prompted the company to move in a healthier direction. Jordan s is launching a 2.5m advertising campaign to champion its health message and will start prominently displaying health claims, such as lowers cholesterol, on its packaging. Furthermore, the gluten-free market is on the up. Only 2-3% of the population avoid gluten for medical reasons, but after celebrity endorsements, enhanced exposure and word of mouth, more and more consumers are looking to cut it from their diets. Warburtons has just launched the Newburn Bakehouse gluten-free sub-brand following the category s 34.9% increase in value y-o-y, to capitalise on this trend. Other companies are catering to our indulgent desires with a wide variety of baked breakfast goods. Bagels are becoming increasingly popular and Kingsmill has added a bagel to its Fruit & Fibre range. The New York Bakery Co has launched 3 premium lines in, Fruit & Oat, Red Onion & Chive and Blueberry flavours. Patisserie products have also performed well with a 23% rise in value sales of Brioche in the last year, for example. Other companies are catering to our indulgent desires with a wide variety of baked breakfast goods. Bagels are becoming increasingly popular and Kingsmill has added a bagel to its Fruit & Fibre range. As we have seen previously in other markets, manufacturers are moving to produce products that deliver against specific needs rather than customer archetypes. Health, convenience and indulgence are being used to carve out new opportunities. Some are looking to convert busy breakfast abstainers with on-the-go formats whilst others are enticing us to the breakfast table with a combination of healthy offerings and indulgent treats. Whilst traditional formats still dominate the morning market, early signs suggest consumers are buyinginto the breakfast bonanza. Take a look at some of the headlines we ve noticed in the trade press over the last quarter. They provide a simple snapshot of industry developments showing who thinks what and why / Q1 3

4 Fresh Produce Ocado has pledged to cut down food waste and is introducing a new scheme to sell more misshapen fruit and veg by broadening its quality controls. Florette is launching a new bagged range of water cress salads to offer consumers a sharper more peppery taste. Bakery Princes is targeting the home-baking category with the launch of a new seven-strong fruit fillings range. McVitie s is launching a new range of biscuits called Tasties. The range will feature Custard Creams and Bourbon Creams, priced at 1 per pack. Allied Bakeries is promoting its Allinson Bread with a new advertising campaign in order to reverse a 26.1% fall in value sales over the last year. Tate & Lyle is launching a new range of brown sugars in order to tap into the booming home-baking market / Q1 4

5 Breakfast Weetabix is renaming its Weetabix Chocolate cereal to Weetabix with Chocolate, in order to boost the brand s health credentials. PepsiCo is launching a breakfast biscuit under its Oats So Simple brand to capitalise on the category s 148% value growth this year. Kellogg s is revamping its Special K range. The new cereals will be made using barley, rice and wheat and will boast a higher wholegrain content. Warburtons has announced it is to launch its biggest marketing campaign ever this year. The company said the new 16 million campaign will focus on individual product lines rather than building the brand image. Weetabix has joined the increasingly crowded breakfast biscuit market, launching three different flavours; Milk & Cereal, Apple & Cinnamon and Fruit & Fibre. Kellogg s has launched 3 new healthier kids cereal lines containing less sugar but is avoiding reformulating its existing ranges. New York Bakery Co is launching 3 new premium lines in its bagel range. The Fruit & Oat, Red Onion & Chive and Blueberry bagels will be available in February. Kellogg s is looking to rejuvenate its Frosties brand after value sales fell 6.6% last year. The company believes that the high sugar content has damaged sales and hindered advertising and is considering reformulating. Research undertaken by Kingsmill has revealed that consumers are increasingly busy and don t have as much time to eat breakfast. Consumers are increasingly interested in healthier breakfast products with Kingsmill s 50/50 bread the fastest growing white bread / Q1 5

6 Confectionery & Snacks Nestlé is repeating its Choose a Chunky Champion campaign. The most popular of 4 more limited edition flavours as voted on Facebook will become a permanent addition to the range. Golden Wonder has seen a sharp rise in the sales of its Smoky Bacon, Meat Free crisps following Walkers decision to add meat to its crisp range, making them unsuitable for vegetarians. Popcorn brand Metcalfe Skinny Topcorn is launching two new Wasabi and Cinnamon flavours. Wrigley is launching a new bottle format for its chewing gum brands hoping to encourage more consumers to embrace gum. Malteasers is launching a new chocolate bar called Teasers. Mars said it wanted to offer more chocolate whilst keeping the signature Malteaser crunch. Kettle Chips has incorporated brighter colours on its packaging to further emphasise different flavours. Wrigley is set to launch its new Starburst Flavour Morphs range which change flavour as they are eaten. Walkers has started using British ingredients such as Cheddar cheese and Somerset tomatoes to flavour its crisps. Burts Chips is adding three new flavours to its sharing package format; Wasabi Steak, Lincolnshire Sausage & Mustard, and Jalapeno & Red Pepper. Leaf UK is looking to expand its Chewits confectionery brand into new categories such as; ice cream, cakes, cookies, yogurt and jelly. KP Snacks has plans to introduce a new variation to its Hula Hoops brand after registering a trademark for Hula Hoops Twisters. Chewits have launched a new range of bubblegum to tap into the 4.5% growth in the bubblegum market. Walkers is extending its healthy bagged snack range with the launch of its Baked Hoops & Crosses format. The bags contain wholegrain and 30% less fat than typical potato crisp products. Serious Pig is launching a new pork crackling product called Snackling following a 250% growth in sales of its existing lines over the past year. The Jerky Group is switching from South American to British meat for its beef jerky products following increasing demand for jerky products in the UK. 9bar has launched a new range of savoury snack bars to offer consumers an alternative to the usual sweet-flavoured offerings / Q1 6

7 Dairy First Milk has been forced to issue a product recall after the FSA issued a warning to consumers that some of its own-label cheeses supplied to Morrisons, Asda and The Co-Operative might contain pieces of metal. The recall is estimated to cost up to 250,000. Clover is targeting healthy, motivated consumers following the launch of Clover Seedburst. The spread contains 70% less saturated fat than butter as well as a blend of seeds. Müller has launched new Fruit Corner flavours targeting the children s market. Mondelez International is extending its Chocolate Philadelphia brand into snack packs. The packs will contain 50g of Choccy Philly and mini biscuits. Tesco is trialling branded Cathedral City bays in order to better signpost Cheddar. Pilgrims Choice is emphasising where each of its cheeses is manufactured on its labelling in order to assist more discerning cheese consumers. Danone has been ordered to withdraw its Danio Greek Yogurt from the multiples, just days after launch. Fage, who are still locked in a legal dispute with Chobani over the labelling of Greek Yogurt, was granted an injunction; preventing the sale of Danone s yogurt. Utterly Butterly is launching a low-fat spread called Utterly Butterly Lightly as manufacturer Dairy Crest looks to target health conscious consumers. Wyke Farms has joined up with the Help For Heroes charity, launching a range of branded mature Cheddar with 3 pence per pack being donated to the charity / Q1 7

8 Frozen, Processed & Ready Meals Sainsbury s is launching two new healthy ready meal ranges called My Goodness and Deliciously Balanced. The former offers low salt, fat and calorie content whilst the latter is designed to deliver a balance of protein, carbohydrate and vegetables. Yoomoo is looking to grow the British frozen yogurt market. R&R senior marketing manager Charlotte Hambling explained that frozen yogurt only accounts for 1.2% of ice cream sales in the UK, whereas it accounts for 9% in the U.S. Birds Eye is echoing the McDonald s Filet-o-Fish with the launch of new frozen Fish Fillet Burgers. The company is focusing on the launch following the downturn in frozen burger sales due to the horsemeat scandal. The horsemeat scandal has generated a boom in the meat-alternative market, with sales of Quorn products rocketing 23% year-on-year. Birds Eye is revamping its Fish Fingers to promote their healthy credentials and help them stand out on the shelves. R&R is looking to capitalise on the Easter opportunity with the launch of a range of Nestlé inspired, egg-shaped, ice creams. Willie Cacoa is looking to contend with companies such as Gü as it moves into the premium chilled dessert market. Innocent is launching a range of oriental-inspired noodle pots with each serving containing less than 300 calories. The pots will come in Japanese Ramen Noodle and Vietnamese Curry flavours / Q1 8

9 Functional Foods A new breakfast porridge pot called Oomf! is targeting gym enthusiasts. The porridge is infused with whey protein which helps athletes build muscles. Warburtons is moving into the free-from market with the launch of its Newburn Bakehouse sub-brand. The company has plans to expand its gluten-free range to incorporate 12 different lines by the end of the year. Grupo Leche Pascual is launching 6 soya milks into Tesco, targeting consumers looking for a lighter, more natural milk alternative. Alpro is championing the success of its nut milks after the brand accounted for 75% of the category s value sales. Blue Diamond is looking to challenge rival milk producers with a new advertising campaign championing the lower calorie credentials of its almond milk. Volac is looking to increase the appeal of its whey drink brand Upbeat and is looking to target wider consumers rather than just athletes. Free-from bread brand BFree has secured a listing with Asda. The range offers fresh and frozen breads that are free from dairy, wheat and gluten. Sales of gluten-free breads have risen 34.9% in value year-on-year. Truvia a stevia-based sweetener is targeting the home-baking category with the launch of Truvia Baking Blend. GlaxoSmithKline is looking to revitalise sales of Lucozade Sport with a new health claim; Lucozade Sport hydrates and fuels you better than water / Q1 9

10 Meat, Fish & Poultry The National Pig Association is asking manufacturers to pledge not to use pork from illegal sources or face being named and shamed. Tesco, Aldi, Lidl & Iceland have had to remove all of their value range burgers after horse DNA was discovered in the meat. Truly Irish is developing a new type of pork that could bolster immune systems. The pork is fed on laminaria seaweed extract, which is believed to boost anti-oxidant levels. Latest industry reports have confirmed that several member states have still not complied with the EU-wide ban on battery-egg farming despite its prohibition over a year ago. Vion s UK pork business is to be renamed Karro Food Group following a buyout by its management in December. The National Farmers Union is asking the multiples to pay higher prices to British lamb producers. Waitrose has launched a premium range of New Zealand lamb products. The Longdown range boasts a strong provenance message and is sourced from lambs that have been pasture-fed, promising higher quality. Sainsbury s has announced it will not be adding the Red Tractor British quality assurance label back onto its packaging despite outcry over the horsemeat scandal. Iceland is planning to source 100% of its beef from the UK following the fallout from the horsemeat scandal. Kerry is launching a range of pre-cooked Mini Meatballs targeted at kids, under its Richmond brand. Tesco has pulled a meatloaf product from its stores after it tested positive for horsemeat. It s the fourth Tesco product to test positive / Q1 10

11 Soft Drinks Tropicana is launching a new fruit juice with half the calories and sugar of conventional juices. Trop50 is made using not-from-concentrate juice, water and natural sweetener stevia. Innocent is doubling its marketing spend this year and is kicking off the year with a tv campaign encouraging consumers to drink smoothies as part of their January health kick. Purity Soft Drinks is extending its Juice Burst brand to 14 lines in a bid to win new supermarket listings. Twinings is updating its Everyday Tea range with new packaging and a fresh tea blend as it looks to build its marketing share of the tea category. Britvic is extending its J20 drinks range into cans in order to increase its share of the take home market. Coca-Cola is launching its Relentless energy drink in a smaller 250ml format in order to compete with the cheaper energy drink brands. The soft drinks industry is being prompted to act on sugar reduction after the government launched a damaging add in the new year, highlighting that each bottle of cola contains 17 cubes of sugar. Health Minister Anna Soubry has warned the government will introduce new taxes to tackle the issue if the industry does not take appropriate action. Tesco has become the first company to sell own-label Rainforest Alliance-certified tea. The company said the move was part of its ongoing commitment to delivering quality, environmentally friendly products. CocoMojo is launching a coconut based energy drink to offer consumers a healthier and more natural alternative to conventional sugary drinks. GlaxoSmithKline is planning to sell off its Lucozade and Ribena drinks brands to focus on its core business in the pharmaceutical industry. Lucozade is the second biggest brand in the UK and Coca-Cola Enterprises & Britvic/Barr are set to compete for the rights. Caffè Latte is adding a strength description to its chilled coffee drinks to help consumers better gauge their caffeine intake / Q1 11

12 Alcohol The discounters have performed well this Christmas as consumers looked for premium products at bargain prices. Champagne was the second biggest seller at Lidl over the holidays. Westons Cider has secured listings with The Co-Operative and Tesco following strong performance in the on-trade. Molson Coors is looking to emulate the success of Stella Artois and is launching a new cider under its Carling brand. SHS Drinks is introducing a new range of rum and bourbon flavoured beers to capitalise on the growing demand for spirit flavoured beers. Heineken is launching a 2% abv, lemon flavoured lager called Fosters Radler to capitalise on the growing demand for low abv drinks. Whisky has become increasingly popular with sales rising 13% over the last year. The Ice Company is launching a new Ice & Slice kit to facilitate easy drink preparation. The kit contains a bag of ice cubes and pre-sliced segments of lemon. Beer sales have plummeted to their lowest levels in 14 years following a fall in the number of promotions and rising consumer demand for alternative drinks. Bulmers is looking to extend its flavoured cider lines in order to build on the category s success. The Bold Black Cherry & Pressed Red Grape flavours will go on sale from March. Gordon s is launching a range of flavoured premixed drinks in 250ml cans to solidify its position in the premix category. The Gordon s Tonic with a Dash of Elderflower & Gordon s Tonic with a Hint of Cucumber will roll out in March / Q1 12

13 Miscellaneous Retailers and suppliers have agreed a new front-of-pack nutrition labeling system. The new designs are a hybrid of the GDA and traffic light systems. Tesco is planning to increase its Clubcard promotions this year and is asking its suppliers to help fund the activity. CEO Philip Clarke explained the strategy was designed to open a new avenue for promotions which have reached breaking point. The Grocer believes that the alliance between the food industry and the government could fracture if the Department of Health continues to pursue salt reduction targets. A spokesman for the Food And Drink Federation explained that the easy advances in salt reduction have been exhausted. He went on to say that further reductions would be possible but would have to be undertaken on a much smaller scale. The FSA has warned the multiples that it will force them to remove chicken products from their shelves if more is not done to tackling the spread of campylobacter food poisoning after 460,000 cases were reported last year. Morrisons is displaying advertising posters for its NuMe range in high street clothing store changing rooms to tap into the New Year health trend. Christine Tacon has been appointed as the first Groceries Code Adjudicator and will now be interpreting and enforcing the GSCOP. Schwartz flavour specialists have identified Japanese katsu and Mexican caramel sauce, cajeta as the two next big things in ethnic food sales. Morrisons has signed-up Ant & Dec to star in its latest set of commercials as it looks to turn around its poor Christmas performance. The government has announced that companies will be able to opt-out of the new universal front-of-pack labelling scheme if they wish. Asda are rumoured to be considering buying HMV to explore it as a brand / Q1 13

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