Processed Poultry and Red Meat - UK - November 2016

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Volatility in the market 2011-16
Values continue to fall in 2016
Multiple factors to affect the market 2016-21
Figure 1: UK retail value sales of processed poultry and red meat, 2011-21
Bacon sees ongoing decline, burger and processed poultry growth to slow
Further volume declines expected for cooked sliced and canned products
Figure 2: Growth in UK retail value sales of processed poultry and red meat, by segment, 2011-16 and 2016-21
Warring supermarkets cut prices, weak pound will raise them
Economic slowdown could prompt trading down
Health concerns affect processed meat
Changing habits curb processed meat occasions
Companies and brands
Much of processed meat is dominated by own-label
Princes retains top position in canned meat
Birds Eye remains number one in frozen processed meat and poultry
Figure 3: Leading brands’ shares in the UK retail frozen processed meat, poultry and meat-free meal components market, by value, 2015/16*
NPD looks to add value
Advertising spend falls in 2015
The consumer
Processed meat remains a menu staple
Figure 4: Usage of processed meat, poultry and game, by type, August 2016
Consumers’ price focus encouraged by retailer tactics
Figure 5: Processed meat, poultry and game buying factors, by purpose, August 2016
Emphasis on cooking times can mine convenience demand
Opportunities for burgers and sausages with hidden extras
Figure 6: Interest in new product concepts in processed meat, poultry and game, August 2016
Transparency on production would boost trust, ethical claims can temper price focus
Figure 7: Attitudes towards processed meat, poultry and game, August 2016
Weak image as versatile is a threat for sandwich meat
Figure 8: Perceptions of selected types of processed meat, poultry and game products, by quality, August 2016
What we think
ISSUES AND INSIGHTS
Making ethical claims more tangible could temper buyers’ price focus
The facts
The implications
Transparency on production processes and sourcing would boost consumer trust
The facts
The implications
International dish matching suggestions could revive interest in sausages
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Volatility in the market 2011-16
Values continue to fall in 2016
Multiple factors to affect the market 2016-21
Bacon sees ongoing decline, burger and processed poultry growth to slow
Further volume declines expected for cooked sliced and canned products
Warring supermarkets cut prices, weak pound will raise them
Economic slowdown could prompt trading down
Health concerns affect processed meat
Changing habits curb processed meat occasions
MARKET SIZE AND FORECAST
Volatility in the market 2011-16
Figure 9: UK retail value sales of processed poultry and red meat, 2011-21
Figure 10: UK retail value sales of processed poultry and red meat, 2011-21
Multiple economic and social factors to affect growth 2016-21
The impact of the EU referendum vote
Figure 11: Alternative scenarios for the processed poultry and red meat market, 2016-21
Figure 12: Alternative scenarios for the processed poultry and red meat market, at current prices, 2016-21
Potential for economic slowdown to benefit some segments, but limited by changing lifestyles
Health concerns and diet choices curb the appeal of processed meat
Weakened disposable incomes could prompt trading down
Role of inflation
Forecast methodology
MARKET SEGMENTATION
Values for red meat meal components fall 2014-16
Figure 13: Value sales of red meat meal components, by segments, 2011-16
Multiple factors push down bacon and sausage values and volumes
Usage occasions curbed by wider food trends
Health concerns stoked by WHO
Price wars keep values in check
Americana and gourmet trends support burger sales
Import-led inflation for bacon to push up overall values 2016-21
Figure 14: UK retail value sales of processed poultry and red meat, by segment, 2011-21
NPD boosts processed poultry sales in 2016
Volume growth to slow 2016-21
Decline in sliced bread sales hinders cooked sliced meat and poultry
Ongoing decline of bread to continue to push down volumes 2016-21
Canned meat struggles under negative consumer perceptions
Volume sales to continue to fall, but inflation to slow value decline
MARKET DRIVERS
Supermarket price wars push down values
Figure 15: Retail price index for processed pork products, by segment, and comparison with total food, 2011-16
Brexit vote creates economic uncertainty
Weakened pound could lead to inflation
Economic slowdown could prompt trading down
Health concerns affect processed meat
Decline in carrier products hampers cooked sliced meat and poultry
Consumers’ desire for convenience reduces cooked breakfast occasions
Interest in world foods increases competition for mealtime options
Summer weather pivotal for burgers and sausages
Figure 16: Sunshine hours in the UK, by month, 2011-16
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Much of processed meat is dominated by own-label
Princes retains top position in canned meat
Birds Eye remains number one in frozen processed meat and poultry
NPD looks to add value
Advertising spend falls in 2015
MARKET SHARE
Much of processed meat is dominated by own-label
Canned meat
Princes retains top position
Packaging revamps and NPD from top 5 players
Figure 17: UK retail sales of canned meat, by leading brands, 2013/14-2015/16
Figure 18: UK retail sales of canned meat, by leading manufacturers, 2013/14-2015/16
Frozen processed meat and poultry
Birds Eye retains top position in frozen processed meat and poultry
Bernard Matthews acquired by Boparan
Meat-free brands and own-label gain ground
Figure 19: UK retail sales of frozen processed meat, poultry and meat-free meal components, by leading brands, 2013/14-2015/16
Figure 20: UK retail sales of frozen processed meat, poultry and meat-free meal components, by leading brands, 2013/14-2015/16
Chilled sandwich meat and cooked sausages
Figure 21: UK retail sales of chilled sandwich meat^ and cooked sausages, by leading brands, 2013/14-2015/16
Figure 22: UK retail sales of chilled sandwich meat^ and cooked sausages, by leading manufacturers, 2013/14-2015/16
LAUNCH ACTIVITY AND INNOVATION
Morrisons expands Farmers range with Bacon for Farmers
Kerry targets busy parents with Richmond Shake & Bake
Wall’s reformulates and relaunches
Brands strive to improve the image of breaded poultry
Birds Eye moves on health with wholegrain-coated Chicken Grills
M&S targets dieters with Skinny Beef Burgers
Fish brands extend into breaded poultry
Further growth in processed game products
New deli meat brands focus on sourcing
Brands and retailers look to capitalise on Olympics buzz with Brazil-inspired flavours
Sainsbury’s promotes sausage snap packs as reducing food waste
ADVERTISING AND MARKETING ACTIVITY
Advertising spend falls in 2015
Kerry remains the largest spender in 2015
Convenience aspects of Perfect Bake promoted as allowing for more family time
Promoting Richmond sausages as supporting family unity with toy tracker chip
TV dinner advert aims to create a fun image
Figure 23: Total above-the line, online display and direct mail advertising expenditure on processed meat and poultry, 2012-16
Lidl puts the emphasis on quality
Birds Eye continues with ‘the food of life’ adverts
Morrisons leads on advertising in 2016
Focus on in-store preparation to give image of transparency and integrity
Appealing to the emotions through reference to social meal occasions
Pushing sausages’ versatility through highlighting special occasion uses
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Processed meat remains a menu staple
Consumers’ price focus encouraged by retailer tactics
Emphasis on cooking times can mine convenience demand
Opportunities for burgers and sausages with hidden extras
Transparency on production and sourcing would boost consumer trust
Making ethical claims more tangible could temper buyers’ price focus
Weak image as versatile is a threat for sandwich meat
USAGE OF PROCESSED MEAT, POULTRY AND GAME
Greater transparency fuels higher usage for raw products
Figure 24: Usage of processed meat, poultry and game, by type, August 2016
Usage does not decline with age
Families are key users of processed meat and poultry
Deli meats’ lower price allows for more frequent usage
Figure 25: Usage frequency for processed meat/poultry/game, by purpose, August 2016
PROCESSED MEAT, POULTRY AND GAME BUYING FACTORS
Consumers’ price focus encouraged by retailer tactics
Scope to shift the focus away from price among a significant minority
Figure 26: Processed meat, poultry and game buying factors, by purpose, August 2016
Need for high-meat-content products to emphasize this more strongly
Emphasis on cooking times should appeal to desire for convenience
Resealable packaging particularly valued for sandwich meats
INTEREST IN NEW PRODUCT CONCEPTS IN PROCESSED MEAT, POULTRY AND GAME
Opportunities for burgers and sausages with hidden extras
Hidden sauces and fillings could offer contrasting flavours
Products with vegetables appeal especially to parents
Figure 27: Interest in new product concepts in processed meat, poultry and game, August 2016
Butchers’ shops well placed to mine interest in international flavours
Dish matching suggestions could help to revive interest in sausages
ATTITUDES TOWARDS PROCESSED MEAT, POULTRY AND GAME
Transparency on production processes and sourcing would boost companies’ standing
QR codes offer a viable means to satisfy consumer desire for information on farms
Transparency on production processes could help to address negative perceptions of breaded poultry
Figure 28: Attitudes towards processed meat, poultry and game, August 2016
Making ethical claims more tangible could temper buyers’ price focus
Demonstrating good farmer relations should boost companies’ standing
Confusion over assurance schemes suggests clarification on animal welfare policies needed
PERCEPTIONS OF SELECTED TYPES OF PROCESSED MEAT, POULTRY AND GAME PRODUCTS
Greater trust in raw products’ naturalness and healthiness
Figure 29: Perceptions of selected types of processed meat, poultry and game products, by quality, August 2016
Sandwich meat less likely to be seen as versatile than raw products
High meat content should be emphasised more to boost natural image
Breaded poultry could take cues from foodservice to reassure consumers on production processes
Innovation in coatings could help these to be seen as healthier
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 30: UK retail value sales of processed poultry and red meat, with annual change, 2011-21
Figure 31: UK retail value sales of red meat meal components, 2011-21
Figure 32: UK retail value sales of red meat meal components, with annual change, 2011-21
Figure 33: Best- and worst-case forecasts for UK retail value sales of red meat meal components 2016-21
Figure 34: UK retail value sales of processed poultry, 2011-21
Figure 35: UK retail value sales of processed poultry, with annual change, 2011-21
Figure 36: Best- and worst-case forecasts for UK retail value sales of processed poultry 2016-21
Figure 37: UK retail value sales of cooked sliced meat and poultry, 2011-21
Figure 38: UK retail value sales of cooked sliced meat and poultry, with annual change, 2011-21
Figure 39: Best- and worst-case forecasts for UK retail value sales of cooked sliced meat and poultry 2016-21
Figure 40: UK retail value sales of canned meat, 2011-21
Figure 41: UK retail value sales of canned meat, with annual change, 2011-21
Figure 42: Best- and worst-case forecasts for UK retail value sales of canned meat 2016-21
Forecast methodology
APPENDIX – PERCEPTIONS OF SELECTED TYPES OF PROCESSED MEAT, POULTRY AND GAME PRODUCTS
Figure 43: Perceptions of selected types of processed meat, poultry and game products, by quality - Unhealthy, August 2016
Figure 44: Perceptions of selected types of processed meat, poultry and game products, by quality -Versatile, August 2016
Figure 45: Perceptions of selected types of processed meat, poultry and game products, by quality – Good value for money, August 2016
Figure 46: Perceptions of selected types of processed meat, poultry and game products, by quality – Natural, August 2016
Figure 47: Perceptions of selected types of processed meat, poultry and game products, by quality –, Convenient, August 2016