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Back to Basics Approach Creates New Paleo Diet Opportunity
The so-called Paleo Diet has been around for some years, but has grown to achieve almost cult status, particularly in the US, since its revival in the early 2000s, exploiting rising interest in returning to the eating habits of our ancestors, perceived to be simpler and more natural.
Interpretations and definitions of the diet vary considerably, but the basic idea is to take us back to eating the way our Stone Age ancestors would have eaten 10,000 years ago, prior to agriculture and farming, with a diet of lean meat, nut and fruit and vegetables, with no access to grains, legumes, dairy products and foods high in refined sugar and salt.
“Natural ingredients are increasingly in demand,” according to Lu Ann Williams, Director of Innovation at Innova Market Insights, “and this has resulted in the arrival of new options in some instances and the revival and updating of some established products in others.”
“Interest in naturally nutritious ingredients and a return to basics has led to increasing consumption of ingredients such as ancient grains and green foods,” she contends. “It has also led to a surge in interest in alternative diets and eating habits, bringing awareness of the Paleo Diet to a much wider range of consumers.”
When looking at use of the word “paleo” in launch activity tracked by Innova Market Insights, a huge surge has been seen over the past five years, from single figures in 2010 to over 300 in the 12 months to the end of September 2015. Although this remains very small in terms of global launch activity totals, it is nearly three times the number recorded in the previous 12-month period.
Significantly, activity is also spreading out globally from the US where the current rise in interest started. The share of the US in paleo launch activity fell from over 80% of the tracked launch total in the 12 months to the end of September 2014 to less than two-thirds in the same period in 2015, despite strong growth in total introductions. This indicated the emergence of activity in other parts of the world, perhaps most notably Australia, where activity came from virtually zero in 2014 to account for nearly 16% of the 2015 total, putting it ahead of Europe with 10%.
Launch activity has been fairly fragmented in terms of product categories, although cereals, bakery products and snacks account for a combined 56% share. Sports nutrition products take fourth place, ahead of dairy and soft drinks.
Products are increasingly being marketed as paleo-friendly and some high-profile lines now also feature ‘paleo’ in the product name or brand. Examples include products such as Paleo Cookies and Paleo Protein Bars from Julian Bakery, Paleopure Trail Mix from Paleopure and Steve’s Paleocrunch Granola and Paleogoods Paleobars, all in the US.
Sainsbury’s Stands Out In Grocery Market Run Up To Christmas
The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 6 December 2015, show total grocery market sales up by only 0.1% compared to last year as retailers battle for sales during the vital Christmas period.
Despite Black Friday seeing a small increase of 4% in sales – compared to the previous Friday – the event itself has done little to buoy the market overall. The latest period sees the lowest growth since June and is the ninth consecutive month where sales have increased by less than 1%.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, comments: “Although slow growth means a distinct lack of seasonal cheer for the market, the news is more positive for consumers looking to save this Christmas. Last year customers spent an average of £71.33 on their big Christmas shop but with falling prices set to continue, shoppers are likely to enjoy a cheaper Christmas this year. All supermarkets are cutting prices, particularly on staples like eggs and butter, with the cost of everyday groceries falling by 1.9% this month.
“Despite the difficult market conditions, Sainsbury’s increased sales by 1.2%, growing across its convenience, supermarket and online businesses and increasing its market share to 16.7%. Consumers continue to be drawn to the retailer’s ‘Taste the Difference’ range, and with sales of champagne and sparkling wine up by a quarter it seems clear that the grocer is successfully tapping into demand for premium goods. Sainsbury’s recent run of success predates its popular ‘Mog’s Christmas Calamity’ advert, with the retailer now having grown ahead of the market for 3 months in a row.”
Things remain tough for Tesco and Asda, with both seeing a fall in sales of 3.4% as consumers drift away from larger stores towards the discounters. It’s not all bad news – while internet shopping has created a challenge for the large out-of-town sites favoured by more traditional grocers, both Tesco and Asda have managed to increase sales online. Elsewhere, Morrisons has started to feel the impact of selling 130 of its M Local convenience stores, with revenues down by 2%.
Aldi and Lidl remain at the combined 10% share of the market they achieved last month, growing sales by 15.4% and 17.9% respectively year-on-year. While many shoppers may not head to Aldi and Lidl for their entire Christmas shop more and more are likely to pop in for trimmings ahead of the 25th, and each discounter should hope to attract a healthy 10 million shoppers over the Christmas period.
The Co-operative and Waitrose were both market share winners this month. The Co-operative’s revival continues with sales growth of 2% and an increased market share of 6.2%. Waitrose has grown revenues by 2.7% and now holds a respectable 5.1% share of the market.
Is Revitalised Demand for Hot Cereals & Extensive Premiumisation Enough to Ward Off Potential Cereal Killers?
According to Breakfast Cereals 2015, a new report from market intelligence provider Key Note, the breakfast cereals market continued to grow at an impressive rate in 2014, rising by 3.9% in market value despite falling volume sales.
Growth can be positively attributed to several factors, such as the resurgence of the hot cereals sector and heightened demand for premium products; however, ultimately it remains highly dependent on the ongoing impact of high inflation on retail prices.
Breakfast cereals enjoy extensive brand awareness; the industry is evocative, having played a prominent role in consumers’ younger years cemented on breakfast tables. The sector is prevalent in the minds of the nation; according to a recent survey commissioned by FCB Inferno and reported in the press, a staggering three times more people recognised the Honey Monster than knew the newly elected leader of the opposition, Jeremy Corbyn. However, the industry has been confronted by several problems, not least a depleting consumer base as the result of a mass exodus triggered by the widening multitude of alternate breakfast options, such as breakfast drinks and biscuits.
Breakfast cereals remain highly popular among British consumers, upheld for their superior source of energy and nutritional fortification. However, the industry is changing as breakfast cereals become increasingly absent from shopping baskets in line with changing eating habits and consumer demand. The market has responded accordingly and cereal aisles have dramatically changed in appearance, driven by demand for health, convenience and nutrition.
Over the past few years product choice has shifted from frivolously packaged, excessively sugary and brightly coloured boxes to ‘natural’, unadulterated cereals in quaint, fresh packaging laden with nutritional information and advice. This shift has been most apparent in the children’s subsector, which has faced mounting concern among parents about sugar content as awareness grows of matters of diet and health, catalysed by worsening childhood obesity. So, in the context of falling volume sales, a dwindling consumer base and heightened health concerns, it is plain to see why the market grows more competitive as brands scramble to secure growth in an ever more saturated marketplace.
Therefore, in the face of difficult market conditions it is essential that the market remains dynamic, committing ongoing investment to new product development and marketing. This has been the source of much recent market growth — from brand extensions to hot cereals to convenient formatting —and has allowed the breakfast cereals market to remain on its toes in the face of adversity.
Key Note expects innovation to continue as a principal determinate of success in the breakfast cereals industry. There are a few interesting developments in the market, from the rise of the eating out breakfast occasion to the ongoing consolidation of breakfast alternatives. The manner in which the industry can harness these forces and exploit them is of utmost importance. Changing market forces will continue to open new avenues of growth; however, these will be limited by a long-term fall in volume sales. Overall, therefore, Breakfast Cereals 2015 forecasts market value growth of 12.9% between 2015 and 2019.