Asian Trader asks suppliers to gaze into their crystal ball and predict the trends that will drive the grocery market in 2019.
The independent retail sector is evolving fast, with categories like e-cigarettes and “free from” emerging rapidly in the last few years.
Health concerns influence every category from confectionery to food to go.
This year has witnessed the introduction of the sugar levy, with many soft drinks manufacturers reformulating their products to ensure they are below the threshold of the levy.
This has resulted in one or two manufacturers getting caught out when consumers weren’t pleased with the reformulated drink and turned away from buying it.
The more far-sighted soft drinks manufacturers reformulated their product gradually over several years so that consumers didn’t notice the difference in taste.
Other soft drinks manufacturers weren’t able to reformulate their product without destroying their own brand and so were forced to increase prices to pass on the cost of the levy to the consumer.
Meanwhile, retail technology is an ever-developing field. The technology now exists for a store without tills so that an app on consumers’ phones can register what the shopper is purchasing. Are retailers ready for this brave new world?
Mark Stananought, sales director of the impulse sector at Mondelēz International, says during 2018, we’ve seen snack sales continue to grow, primarily driven by changes in consumer habits.
“Busy lives are giving rise to different snacking opportunities, with consumers seeking snacks that work within their ‘on the go’ lifestyles, while being more deliberate with their choices and seeking out both more permissible and more premium snacks,” Stananought comments.
As the market leader – with 34.4 per cent of the chocolate market alone (Nielsen) – Mondelez offers a range that aims to suit these changing consumption states, Stananought believes.
“We’ve continued to see that consumers are striving to live a more balanced lifestyle, with the majority of shoppers attempting to improve their diet, while not willing to forgo on taste (83 percent of mainstream ‘protein interested’ consumers will not sacrifice taste),” says Stananought.
This is why Cadbury launched the Boost + Protein bar in July, which was crafted over time and features special protein crisps, to ensure that it delivers the same chewy caramel Boost taste, with four times more protein and 32% less sugar than the standard Boost bar.
“We know that reducing sugar intake is also high on the agenda,” Stananought adds.
At Mondelēz, a team of 20 scientists, nutritionists and chocolatiers worked for almost two years to find a way to achieve the Cadbury Dairy Milk taste, while delivering 30% less sugar with no artificial sweeteners, colours or preservatives and no increase in calories, in a product set to be brought to market in 2019.
In candy, Mondelez will announce Trebor news in January, with two new products set to be added to the brand’s growing sugar free range, which have been specially designed in line with flavour trends.
“At Mondelēz we work hard to really understand our consumers to ensure we launch products to meet demand,” comments Stananought. “Our research highlighted that our taste buds change as we get older, with some consumers finding milk chocolate too sweet, and dark chocolate too bitter.”
This knowledge inspired one of Mondelez’s biggest announcements of 2018, the launch of Cadbury Darkmilk.
The bar will launch in 2019 with two variants – Cadbury Darkmilk Original and Cadbury Darkmilk Almond – both made with 40% cocoa to provide a more grown up taste, balanced with a creamy and smooth texture.
To target the on-the-go consumer, Mondelez launched JoyFills in August, which are convenient, bite sized treats that deliver on taste, while being light and easily transportable to slot into active days.
The range launched with four variants endorsed by two power brands; the world’s number one biscuit brand (Euromonitor), Oreo, and the nation’s favourite chocolate (Nielsen) brand, Cadbury.
Another brand that is particularly prominent at this time of year is Halls.
This year, Mondelez overhauled the pack design of Halls to help bring the key product qualities to life.
This offered great opportunities for convenience, as the design launched in PMP, which helps retailers generate improved ROS through stand-out on-shelf, while boosting customer trust with the convenience of clear pricing.
“The trend for ‘trading up’ has continued to grow throughout 2018 as premium chocolate has grown fast, bringing in new, higher value shoppers,” adds Stananought.
Capitalising on this, Green & Black’s (+ 11.1 per cent according to Nielsen) launched two new singles bars this summer; Green & Black’s Truffle and Green & Black’s Praline – which are ethically sourced and contain no artificial flavours, preservatives or colours.
“We aim to drive incremental sales with impactful POS and engaging in-store activations, that bring our brands to life, inspiring consumers to make impulse purchases,” comments Stananought.
With that in mind, Mondelez has hosted its biggest ever on-pack promotion, Cadbury’s Match & Win with the Premier League, which spanned across more than 203 million packs.
The next Premier League promotion will kick off in January 2019, with the aim of helping retailers score sales through impactful POS and drive excitement in store with footballing legends.
“I couldn’t close without highlighting the importance of the key seasons – Christmas and Easter – and how crucial it is to create ‘theatre’ in your store around these critical times,” adds Stananought.
For Easter 2019, the company recommends getting a ‘fast start’ in Januaryt throught the ‘Hunt the White Creme Egg’ promotion, will help retailers do this with eye-catching POS and engaging prizes. If a customer wins in their store, the store can win up to £1,000.
“Despite legislative changes in the last 18 months, the latest data shows that there has been no significant impact on tobacco sales in the UK,” says Ross Hennessy, Head of Sales at JTI UK.
Tobacco continues to be the biggest FMCG category, with the total UK tobacco market currently worth £14.4 billion, and the RMC market accounting for £11.6 billion (Nielsen).
The total value of tobacco in the UK independent and symbol market totalled £6.2 billion in the last year, with the cigarette market accounting for £5 billion (Nielsen).
“Those retailers who continue to invest in the category will reap the rewards and JTI is equally continuing to invest in product innovation and support for retailers to help them maximise tobacco profits,” comments Hennessy.
The vaping category is currently worth £177 million in traditional retail in the UK and the future is bright, with 11.5% growth in the last year.
“We see huge opportunity for retailers investing in this growing category,” says Hennessy.
The Logic range holds a 12.4% share of the UK independent and symbol vaping market and 10.9% share of the overall UK vaping market in traditional retail (Nielsen).
In terms of cigarettes, there are two clear trends in the current tobacco market – the growth of the capsule segment, which is now responsible for 15.3% of total cigarette sales in the UK, and the growing value segment, as consumers seek out value for money products, says Hennessy.
In line with this, JTI extended its capsule range this year with the addition of three new Value products; Sterling Dual Superkings 20, Sterling Dual Double Capsule King Size 20 and B&H Blue Dual Superkings 20.
As part of the trend towards value in the total tobacco market, the roll-your-own category has increased 8.2% year on year as existing adult smokers seek out these value for money products. The roll-your-own category now generates sales worth over £2.7 billion in the UK (Nielsen).
Within the vaping category, capsule and refillable products are currently the fastest growing devices, and are now used by most adult UK vapers.
Retailers can tap into the growing refillable market by stocking Logic LQD, which recently updated its e-liquid bottles with a new design and competitive RRP of £3.99, Hennessy suggests.
Retailers can also sell the revamped LQD bottles as part of JTI’s long-term 3-for-£10 promotion.
Lower strength e-liquids now account for over 29% of the segment, so the extension of JTI’s Logic LQD e-liquids earlier this year with the launch of a lower strength (6mg) variant offers retailers a significant profit opportunity.
Retailers can also take advantage of the increasingly popular capsule market with Logic PRO, the No.1 capsule vaping brand in the UK (Nielsen).
According to the latest insight, the three most popular vaping flavours are fruit (30%) followed by menthol (22%) and then tobacco (19%) – all of which are included in the Logic LQD and PRO flavour ranges.
Andrew Turner, director of wine at Halewood Wines & Spirits, a desire to live healthier lifestyles will be the dominant trend of 2019, it shows no sign of slowing in popularity.
“As many as one in five people – one in three of those under 24 years old – are choosing not to drink because of the increased awareness of the health risks associated with alcohol,” says Turner. “But your teetotal consumers still want premium soft drinks at home and when they are socialise.”
This means alcohol free drinks, and organic options, will continue to be a massive trend in the year ahead.
The latest MAT (Moving Annual Total) shows that the alcohol free beverage sector had increased by £1.7 million (Nielsen 52 weeks to 20/05/2017), whilst the alcohol free wine category is worth just under £40 million (Nielsen 16/07/2018).
Eisberg, the leading alcohol free wine in the UK, has 60 per cent market share.
“It’s made in exactly the same way as regular wine, meaning it retains the same great, vibrant flavours,” comments Turner.
Eisberg appeals to all wine drinkers, with a staple range of crisp whites such as Sauvignon Blanc, Chardonnay and Cabernet Sauvignon, as well as sparkling Blanc and Rose variants.
“This means that people can still pop a cork or clink a glass with their loved ones,” adds Turner.
Eisberg is also incredibly low in calories, with only 33 calories per glass – that’s less than a third of regular wine.
“Organic options will also be in higher demand in 2019 as people search for brands doing things the right way,” says Turner.
The Colle Baio Organic Prosecco by II Cole is the first organic prosecco Superiore DOCG produced by II CoII. “The prosecco offers an exceptionally fine taste of ancient flavours and aromas of apple, exotic fruit, peach and yellow rose,” Turner adds. “The superb quality is down to the method of the wine, where the grapes are collected and blended in the same plot of the vineyard.”
The quest for provenance in the UK means domestic wines are becoming increasingly popular, too.
Four million bottles were sold in Britain last year alone, making domestic sparkling wine a strong trend for the year ahead. Smith and Evans from Somerset make a traditional sparkling wine that is set to rival the best in the country and is the equal of any good prosecco.
The bakery category has returned to growth + 0.5%, with this growth being driven by the increase of price per pack (Kantar).
“As consumers move away from traditional bakery products, manufacturers and retailers could benefit from focusing on more innovative products that also frequently offer a higher price tag and which meet the demands of today’s consumers,” says Jeremy Gilboy, managing director at Carrs Foods. “While there is still a demand for wrapped sliced bread, people are looking for added benefits, such as added seeds or grains, free-from products, bread that offers longer life, as well as products made with sourdough.”
With fewer consumers demanding the traditional style loaves, the large 800g packs can be off putting to those who are living in smaller households and are concerned about reducing their food waste or, indeed, wasting money.
According to WRAP, three quarters of bread that is binned, is wasted because it’s not used in time.
This is supported by Baker Street’s consumer research which found that bread going stale too quickly at home was a source of frustration among nearly half (49%) of those surveyed.
It is therefore no surprise that products like the fresher for longer Baker Street sliced loaves have grown in popularity.
Baker Street sliced loaves were ranked as the 8th largest bread brand growing a massive 145% in 2018 (Nielsen). Packed so that they can be enjoyed for longer, the Baker Street loaves offer consumers a tasty, soft and versatile product with the convenience of added life.
“With supermarket trends, such as sourdough and seeded, crossing over into the convenience sector, it’s vital that independent retailers create sufficient interest to draw these customers into store but, at the same time, managing food wastage and shelf life,” comments Gilboy.
Products, such as Baker Street Rye Breads offer benefit-driven products to consumers. In addition, they also offer longer life to retailers, thereby minimising their risk of wastage.
Baker Street Toasting Waffles are being relaunched in January, as part of the wider brand refresh. Baker Street is the second largest toasting waffle brand in the impulse sector and grew by 170% in 2018 (Nielsen). Available in packs of eight (RSP: £1.35), the waffles are twin-wrapped for freshness and convenience.
“Certain merchandising strategies work well for the bread and bakery category within convenience stores,” says Gilboy. “Price marking can prove competitiveness alongside the multiples. Furthermore, retailers should consider a mixture of fresh and longer life products to cover the demands of consumers and ensure they never need to be off sale.”
“Snackification” is going to be a big trend in 2019, says Suzie Carlaw, Marketing Manager at Border.
“This has seen consumers shift from big meals to snacking more throughout the day and we expect this to become more popular as the year goes on,” Carlaw comments. “Our behaviours in snacking are changing.”
This was backed up by Border’s research which found people were no longer enjoying elevenses and the most popular time to snack in Scotland is 3:18pm, with participants admitting to eating on average, two and half more biscuits than intended.
“We would advise retailers to stock a quality and versatile range that will meet the consumer’s lifestyle,” adds Carlaw. “They are increasingly looking for on-the-go snacking products and smaller pack formats that are easy to carry on the move.”
Border has recently revamped its Snack Packs, to meet the growing demand for more convenient mini packs. The Snack Packs provide six individually wrapped packs containing two biscuits, in three flavours: Divinely Chocolatey Chip Cookies, Golden Oat Crumbles and Light & Buttery Viennese Whirls, perfect for lunch boxes or on-the-go snacking.
“Border continually looks at how we market out Classic Biscuits to the consumer, it’s essential that we cement ourselves in the mind of our shopper as the go to biscuit that fulfils the customer need for authentic, great tasting, well-crafted biscuits,” says Carlaw.
F. Duerr & Sons launched Hi-PRO at a time when protein rich diets were just starting to emerge.
Now the brand has undergone a full rebrand to appeal to the increase in a generalist trend towards healthy lifestyles and, in particular, high protein diets.
Richard Duerr, Sales and Marketing Director at F. Duerr & Sons comments: “Hi-PRO was originally launched to appeal to athletes and sportspeople looking for ways to increase the level of protein in their diet in a tasty way. However, in the past year, we have noticed a shift in shopper habits.
“From regular gym-goers, and marathon veterans, to newly motivated park runners or weekend cyclists, Hi-PRO has become a simple and healthy choice for nut butter fans trying to make healthier lifestyle choices – we needed to retain the recognition of our more serious sport enthusiast shoppers while gaining sales from the wider generalist shopper.
“This bold new look has the shelf standout that will help people find it easily and includes easily digestible, punchy product benefits that will help shoppers find the right product and make a quick choice.”