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According to Sauces & Spreads 2012, a new Market Report Plus published by market intelligence provider Key Note, the value of the UK sauces and spreads market grew by 4.7% to £1.05bn in 2011. The value of the sauces sector rose by 3.6% to £636m, while that of spreads increased by 6.4% to £416m. Rising commodity prices are the primary reason behind this growth, as consumption has declined.
Brands in the sauces and spreads industry are some of the most established brands in the UK, including Heinz Tomato Ketchup, HP Brown Sauce and Marmite. Although these goods are still popular, consumers have had to cut back on their consumption due to the economic crisis; as a result, volume sales have fallen. Pressure from supermarkets' own goods, which now offer consumers similar quality to that of brands but at a lower price, is forcing manufacturers to engage in promotional activity and driving down value sales.
Rising commodity prices are also taking their toll on the industry. Producing sauces and spreads is more expensive than ever, but manufacturers are reluctant to transfer the cost onto consumers, who are willing to give up brand loyalty for cheaper, own-brand supermarket variants of equivalent quality. Furthermore, growing consumer awareness and government initiatives to tackle obesity in the UK are also encouraging manufacturers to alter their recipes so to reduce salt, sugar, calories and fats in sauces and spreads. Diminishing these contents, however, correspondingly affects taste.
Still, dynamism remains in the sauces and spreads industry. Innovation is dominated by the introduction of the easy-squeeze format that is mess-free and more convenient than traditional bottles and jars. In the sauces category, healthier options and reformulated recipes with twists and kicks are common additions, while spreads with no bits that target children are also increasingly present. Moreover, certain foreign spreads are doing well, especially peanut butter and Ferrero's Nutella. Honey is also gaining popularity, due to the health benefits associated with the product. Finally, manufacturers are increasingly using social media to interact with consumers and engage with them on a fun and exciting level, while simultaneously promoting their products.
The Key Note Sauces & Spreads 2012 Market Report Plus takes an in-depth look at the industry in the UK. Following extensive analysis, Key Note concludes that the industry will continue to grow year-on-year over the next 5 years, with existing trends proving to be the driving factors behind this growth. The sauces and spreads market is estimated to be worth £1.33bn by 2016, an increase of 26.2% from 2011.
Press enquiries: Jack Sykes at Key Note at email@example.com or 0845 504 0452. Press/review copies of the report are available on request.