Sugar and Artificial Sweeteners - UK - January 2005

INTRODUCTION AND ABBREVIATIONS
Introduction
Hypothesis/story
- Dieting – UK, Market Intelligence, February 2004
- Coffee – UK Market Intelligence, January 2004
Definition
Consumer research
 ABBREVIATIONS
PREMIER INSIGHT
Emerging health/eating trends need to be addressed
Trading up in the sugar market opening up opportunities
Premium artificial sweeteners
Repertoire purchasing needs to be encouraged
More sugar flavours need to be explored
EXECUTIVE SUMMARY
Value growth amid volume decline
One lump or two?
Opportunity for sweeteners
Hey Big Splenda!
Organic slowdown
Acquisitions and NPD
MARKET DRIVERS
Levels of being overweight and obese
Figure 1: Incidence of being overweight or obese among men and women, by age group, 1997 and 2001
Figure 2: Obesity among adults, by gender and occupation, 2001
Insulin and diabetes
Figure 3: Prevalence of diagnosed diabetes in the UK, 2004
Atkins, low-carb, diabetes and the glycaemic index
GI Diet – the diet for 2005
The slimming issue
Figure 4: Adults who are trying to slim, 1980-2003
Methods used to lose weight
Figure 5: Ways in which consumers would try to lose weight, 2000-04
Cutting down on sugar is the third most popular way of losing weight
Dental hygiene
Low-carb diets are growing in popularity
From the spoon vs hidden sugar consumption
Figure 6: Weekly expenditure on sugar and sugar products, 2001/02 and 2002/03
Sweet spreads and confectionery
Figure 7: Weekly expenditure on ready-prepared foods containing sugar, 2001/02 and 2002/03
Hot drinks
Figure 8: Weekly expenditure on non-alcoholic drinks, 2001/02 and 2002/03
Demographic shifts
Figure 9: Trends and projections in total UK population, by age group, 1999-2009
PDI and consumer expenditure
Figure 10: PDI and consumer expenditure, at current and constant 1999 prices, 1999-2008
Demographics favour artificial sweeteners
Figure 11: Breakdown of the UK population, by socio-economic group, 1999 and 2004
Regulatory issues
MARKET SIZE AND TRENDS
Volume and value sales heading in opposite directions
Figure 12: UK retail volume and value sales of sugar and artificial sweeteners, 1999-2004
Figure 13: Index of volume and value sales for sugar and artifical sweeteners, 1999-2004
Value sales are rising
Figure 14: UK retail value sales of sugar and artificial sweeteners, by sector, 2000-04
Sugar dominates the market
Declining sugar volume sales but rising sweetener sales
Figure 15: UK retail volume sales of sugar and artificial sweeteners, by sector, 2000-04
Unit price rising
Figure 16: Price per tonne, sugar and artifical sweeteners, 1999-2004
MARKET SEGMENTATION
 SUGAR
Figure 17: UK retail volume and value sales of sugar, 1999-2004
White granulated dominates
Figure 18: UK retail value sales of sugar, by type, 2000-04
Consumers buying for their needs
British Sugar withdraws organic sugar beet
Fairtrade sugar largely retailer-driven
 ARTIFICIAL SWEETENERS
Figure 19: UK retail sales of artificial sweeteners, 1999-2004
Artificial sweetening agents
Figure 20: Leading sweetener brands, with main sweetening agents, 2004
New generation sweeteners driving growth
Figure 21: UK retail sales of artificial sweeteners, by type, by value, 2000-04
THE SUPPLY STRUCTURE
British Sugar dominates
Figure 22: Brand shares in the UK retail sugar market, by value, 2000-04
Dilemma for sugar manufacturers
Canderel’s market share slipping in artificial sweeteners
Figure 23: Brand shares in the UK retail artificial sweetener market, 2000-04
Splenda
British Sugar
Tate & Lyle
McNeil Nutritionals
Splenda brand facing litigation in the US
Napier Brown Foods
Billington’s and ABF
Merisant
Hermes Sweeteners
Crookes Healthcare
Fruisana
Trade Aid
Traidcraft PLC
NEW PRODUCT TRENDS
Introduction
Executive Summary
 PRODUCT TRENDS – SUGAR
Format
Commodity or premium?
 PRODUCT TRENDS – SWEETENERS
Format
Saccharin vs New Generation
Convenience
Hybrid Sugar/sweetener forms
NPD Forecast/predictions
 NEW PRODUCT BRIEFS
December 2004
Positioning Claims
November 2004
October 2004
August 2004
July 2004
June 2004
April 2004
March 2004
February 2004
January 2004
November 2004
November 2003
October 2003
July 2003
June 2003
ADVERTISING AND PROMOTION
The odd blip
Figure 24: Main monitored media advertising expenditure on sugar and artificial sweeteners, 1999-2003
The main spenders by brand
Figure 25: Main monitored media advertising expenditure on sugar, by leading brands, 2001-03
Figure 26: Main monitored media advertising expenditure on artificial sweeteners, by leading brands, 2001-03
 BELOW-THE-LINE PROMOTIONS
Figure 27: Promotions in the sugar and artificial sweetener market, March 2003-August 2004
Figure 28: Breakdown of special price store reduction, by brand, March 2003-August 2004
It is perhaps not surprising to see from the above that it is the major brands that are more likely to be the subject of in-store below-the-line offers. Likewise it is perhaps not altogether surprising to see that Splenda, with such a large advertising support already being directed its way, achieves no better than mid-table mediocrity in the list. Canderel, as the dominant sweetener, attracts much of the attention with competition between Tate & Lyle and British Sugar interestingly listed as second and third. It is worthy of note that these three top products account for 65% of the promotions observed. The other sweeteners appear in the rankings in more or less the same order of their brand share. Own-label, perhaps in an area where distributors have some degree of control over the offers available, claims a greater share of the promotions than the market position would normal allow them to command.
DISTRIBUTION
Grocery multiples dominate sales of sugar
Figure 29: UK retail sales of sugar, by outlet type, 2000-04
Chemists/drugstores are important outlet for artificial sweeteners
Figure 30: UK retail sales of artificial sweetener, by outlet type, 2000-04
THE CONSUMER – CONSUMPTION
 SUGAR CONSUMPTION
Figure 31: Uses of sugar, 2000-04
Usage declining
 DRINKS
Drinking – young consumer have the sweetest tooth
DE consumers sweeten hot drinks with sugar
Positive influence of children
Larger household size important
Detailed demographic breakdown – sugar in drinks
Figure 32: Usage of sugar, by gender, age and socio-economic group, October 2004
Figure 33: Usage of sugar, by presence of children, lifestage and Mintel’s Special Groups, October 2004
Figure 34: Usage of sugar, by household size, October 2004
Figure 35: Usage of sugar, by region and ACORN categories, October 2004
Figure 36: Usage of sugar, by media usage, commercial TV viewing and supermarket usage, October 2004
Cooking
Women major users of sugar for cooking and baking
Younger consumers add sugar to cereals
Broad social appeal
Presence of children is a key discriminator
Londoners don’t do breakfast
Detailed demographic breakdown – sugar in cooking
Figure 37: Usage of sugar, by gender, age and socio-economic group, October 2004
Figure 38: Usage of sugar, by presence of children, lifestage and Mintel’s Special Groups, October 2004
Figure 39: Usage of sugar, by household size, October 2004
Figure 40: Usage of sugar, by region and ACORN category, October 2004
Figure 41: Usage of sugar, by media usage, commercial TV viewing and supermarket usage, October 2004
 ARTIFICIAL SWEETENERS – CONSUMPTION
Figure 42: Uses of artificial sweeteners, October 2004
Almost a quarter of all consumer use artificial sweeteners
Women more likely to use artificial sweeteners than men
Mass-market consumers are the most important
Third age is the most important lifestage
Scottish consumers eschew sweeteners
Comfortably Off opt for sweeteners
Waitrose shoppers eschew artificial sweeteners
Detailed demographic breakdown – usage of sweeteners
Figure 43: Usage of artifical sweeteners, by gender, age and socio-economic group, October 2004
Figure 44: Usage of artifical sweeteners, by presence of children, lifestage and Mintel’s Special Groups, October 2004
Figure 45: Usage of artifical sweeteners, by household size, October 2004
Figure 46: Usage of artifical sweeteners, by region and ACORN categories, October 2004
Figure 47: Usage of artifical sweeteners, by media usage, commercial TV viewing and supermarket usage, October 2004
THE CONSUMER – ATTITUDES AND BEHAVIOUR
Figure 48: Attitudes towards sugar and artificial sweeteners, October 2004
Awareness of its carb status is low
Consumers still disappointed with the taste of sweeteners
Gender breakdown
ABC1 third age
Promoting balanced use
Low-carb, sweeteners and diabetes
Wealthy Achievers need to be better educated
Detailed demographic breakdown – attitudinal statements
Figure 49: Attitudes towards sugar and artifical sweeteners, by gender, age and socio-economic group, October 2004
Figure 50: Attitudes towards sugar and artifical sweeteners, by presence of children, lifestage and Mintel’s Special Groups, October 2004
Figure 51: Attitudes towards sugar and artificial sweeteners, by household size, October 2004
Figure 52: Attitudes towards sugar and artificial sweeteners, by region and ACORN categories, October 2004
Figure 53: Attitudes towards sugar and artificial sweeteners, by media usage, commercial TV viewing and supermarket usage, October 2004
 ASSESSING KEY TARGET MARKETS – CONSUMER TYPOLOGIES
Figure 54: Consumer typologies, October 2004
Potential Sweeteners (33% of sample)
Sugar Loyals (24% of sample)
The Slimming Down (12% of sample)
Carb Avoiders (11% of sample)
Apathetic (21% of sample)
Detailed Demographics
Figure 55: Consumer typologies, by gender, age and socio-economic group, October 2004
Figure 56: Consumer typologies, by lifestage, Mintel’s Special Groups and presence of children, October 2004
Figure 57: Consumer typologies, by marital status, working status, region and ACORN categories, October 2004
Figure 58: Consumer typologies, by media usage, supermarket usage and commercial TV viewing, October 2004
 ASSESSING ENTHUSIASM
Figure 59: Cross-analysis of usage of sugar with consumer typologies, October 2004
Potential for the Potential Sweeteners
Sugar Loyals – prime target for premium sugar
The Slimming Down
Carb Avoiders
Apathetic
Figure 60: Cross-analysis of artificial sweeteners with consumer typologies, October 2004
Never say never
Cluster correlation with retailers
Typologies and shopper profiles
Figure 61: Correlation between retailers and consumer typologies, October 2004
M&S and Waitrose shopper are Sugar Loyals
Slimming Down in Asda
THE FUTURE
Health demands drive NPD
Population dynamics to favour artificial sweeteners
Figure 62: Population breakdown, by socio-economic group, 2004 and 2009
Artificial ambitions
Splenda – how high can it go?
Organic growth
Legislative uncertainty
FORECAST
Growth slows, yet remains strong
Figure 63: Forecast of the UK market for sugar and artificial sweeteners, by value, 2004-09
Decline in sugar volume sales will continue
Figure 64: Forecast of the UK market for sugar and artificial sweeteners, by volume, 2004-09
Premiumisation will drive sugar values
Figure 65: Price per tonne, sugar and artificial sweeteners, 2004-09
Artificial sweeteners will continue to grow
Factors used in the forecast