Sugar and Artificial Sweeteners - UK - January 2007

Table of Contents

• Issues in the Market
• Introduction
• Hypothesis/story
• Definition
• Major themes of report
• Market in Brief
• Caster glance at the market
• But healthy eating is hitting sugar sales
• And the value of the artificial sweetener market has collapsed
• But it' s not all bad news
• Distribution changes affecting brand share
• Changing demographic map changing market dynamics
• No let-up in the immediate future
• Healthy but wise
• A sweeter future for healthier products
• Internal Market Environment
• Mixed fortunes for "sweetening occasions"
• Fewer people having hot drinks
  • Figure 1: Consumption of hot drinks in the last 12 months, 2002-06
• Fewer people eating cold breakfast cereals
• But more people eating hot cereals
  • Figure 2: Consumption of breakfast cereal in the last 12 months, 2002-06
• Limiting the number of sweetening occasions at breakfast
• Are there opportunities for sugar and sweeteners around hot cereals?
• Home baking
  • Figure 3: UK market for home baking products, 2001-06
• Different sugars needed
• Growth in the number of consumers avoiding sugar
  • Figure 4: The number of people with diabetes in the UK, 1996-2010
• Obesity -- the consumer' s response:
• A rise in those trying to slim...
• ...and a rise in healthy eaters
  • Figure 5: Agreement with the statement ' I avoid sugar' by agreement with selected lifestyle statements on diet & health, 2006 (Column %)
• Growing number of ethical consumers
  • Figure 6: Agreement with the statements ' It' s worth paying more for organic food' and ' I buy fair trade products when available' , 2002-06
• Broader Market Environment
• AB socio-economic status growing
  • Figure 7: Changes in socio-economic status, 2001-06
• Health concerns
• An older consumer base ...but is it a wiser one?
  • Figure 8: Changes in the UK demographic profile, by age, 2001-06
• Reform of the EU sugar regime
• Worry about profitability
• Competitive Context
• Alternative sweeteners popularity has risen with GI diets
• Xylitol
• Sweetening with honey is becoming mainstream
• Using fruit instead of sugar
• Fructose sugars
• Fruit sugars
• Agave Nectar
• Strengths and Weaknesses in the Market
• Sugar
• Artificial sweeteners
• Market Value and Forecast
  • Figure 9: UK retail volume and value sales of sugar and artificial sweeteners, 2001-06
• Market performance determined by the sugar sector
• A spoonful of EDLP helps the value go down
  • Figure 10: UK retail value sales of sugar and artificial sweeteners, by sector, 2002-06
• Contradicting the health trends
• Figure 11: UK retail volume sales of sugar and artificial sweeteners, by sector, 2002-06
• More equals less
• The future
• Forecast
• Struggling sales forecast
  • Figure 12: Forecast of the UK market for sugar and artificial sweeteners, by value, 2006-11
  • Figure 13: Forecast of the UK market for sugar and artificial sweeteners, by volume, 2006-11
• Dissolving sugar sales
• Changes to the EU sugar regime...
• ... will force manufacturer to develop niche premium segments
• Changing the image of the artificial sweeteners sector is essential
• Greater number of slimmer should sustain growth
• Factors used in the forecast
• Segment Performance
• Sugar
  • Figure 14: UK retail volume and value sales of sugar, 2001-06
• Dissolving volumes
• Fairtrade growing faster than organic
  • Figure 15: UK retail value sales of sugar, by type, 2002-06
• Speciality sugars shoring up market value
• White granulated
• Caster sugar
• Demerara
• Brown sugars
• Icing sugar
• Golden granulated
• Low calorie sugar
• Artificial sweeteners
  • Figure 16: UK retail sales of artificial sweeteners, 2001-06
• Imploding values
• Sweetening agents
  • Figure 17: Leading artificial sweetener brands, with main sweetening agents, 2006
• Don' t write off saccharin just yet!
  • Figure 18: UK retail sales of artificial sweeteners, by type, by value, 2002-06
• New-generation brands fighting for ascendancy
• What next?
• Potential threats from more natural sweeteners
• Is putting artificial sweetener suppliers on the back foot?
• Market Share
• Sugar
  • Figure 19: Brand shares in the UK retail sugar market, by value, 2002-06
• Leading brands losing ground
• Sweet success for Billington' s
• Low-calorie sugars
  • Figure 20: Brand shares in the UK retail light sugars market, 2006
• Silver Spoon developing the market
• Artificial sweetener
  • Figure 21: Brand shares in the UK retail artificial sweetener market, 2002-06
• Splenda continues to gain share
• Companies and Products
• Company profiles
• The Silver Spoon Company
• Tate & Lyle
• McNeil Nutritionals
• Napier Brown Foods
• Merisant
• Hermes Sweeteners
• Reckitt Benckiser
• Danisco
• Trade Aid
• Brand Communication and Promotion
  • Figure 22: Main monitored media advertising expenditure on sugar and artificial sweeteners, 2002-06*
• Different pictures
• Not a lot happening for sugar
  • Figure 23: Main monitored media spend for sugar, by advertiser, 2002-06*
• The Splenda effect
  • Figure 24: Main monitored media spend for artifical sweetener, by advertiser, 2002-06*
• Seasonality
  • Figure 25: Main monitored media spend, by quarter, 2005
• New Year resolutions
• Channels to Market
• Sugar
  • Figure 26: UK retail sales of sugar, by outlet type, 2002-06
• Artificial sweetener
  • Figure 27: UK retail sales of artificial sweetener, by outlet type, 2002-06
• The Consumer -- Sugar: Usage and Frequency
  • Figure 28: Usage of sugar by occasion, October 2006
• Hot drinks need sugar
• Older AB consumers use sugar to cook/home bake...
  • Figure 29: Usage of sugar, by socio-economic status, October 2006
• ...as do women...
  • Figure 30: Propensity to use sugar in homebaking, by gender, age and lifestage, October 2006
• Younger consumers use sugar on cereals and in hot drinks...
  • Figure 31: Usage of sugar in hot drinks and cereals, by age, October 2006
• Opportunities for growth in declining markets
• Cereals are a bit different
• Children are a key determinant
  • Figure 32: Usage of sugar by occasion, by presence of own children in household, October 2006
• A little ... but often
• Home bakers are the lightest users
• Sugar users use hot drinks most frequently
• Daily sugar users most likely to use in on sugar cereal
• Frequency of usage
• Figure 34: Frequency of usage, October 2006
• Frequency of usage is dependent on usage occasion
  • Figure 35: Frequency of usage by gender, age and socio-economic status, October 2006
• Once a week or less
• Daily/twice three times a day
• Motivations for not using sugar
• Figure 36: reasons for not eating sugar, October 2006
• But health reasons do play a part
• Non-users prefer natural rather than artificial sweeteners
• Consumer 2 -- Artificial Sweeteners: Who -- Usage and Frequency?
• Artificial sweeteners
• Figure 37: Usage of artificial sweeteners in the last 12 months, 2002-06
• More people using sweeteners
• Over-55s are the key user groups for artificial sweeteners
  • Figure 38: Usage of artificial sweeteners in the last 12 months, by gender, age, and socio-economic status, 2006
• DEs are the heaviest users...
• ABs are the lighter users, despite their health concerns
• Women are the key target audience for artificial sweeteners
• Targeting new mothers with Bounty packs
  • Figure 39: Attitudes towards health, slimming, sugar avoidance and artifical sweetener usage, by presence of children in household, 2006
• Locking them into the brand
• The relationship between sugar and sweeteners
  • Figure 40: Usage of artificial sweeteners, by agreement with the statement ' I avoid sugar' , 2006
• Dual usage...
• ...not a complete replacement
• Usage by slimmers
  • Figure 41: Usage of artificial sweeteners in the last 12 months, by adults who are trying to slim, 2006 (column %)
• Dieting is an important motivation
• Medium users are most likely to be slimmers
• Help for the obese
  • Figure 42: Usage of artificial sweeteners in the last 12 months, by BMI segments, 2006 (column %)
• Which other consumer groups use artificial sweeteners?
• Hot drink usage
  • Figure 43: Usage of artificial sweeteners, by consumption of hot drinks in the last 12 months, 2006 (row %)
• Coffee users are most likely to use artificial sweeteners
• Breakfast cereal
  • Figure 44: Usage of artificial sweeteners by consumption of breakfast cereal in the last 12 months, 2006 (row %)
• Hot breakfast cereal eaters use the most artificial sweeteners
• Changing their diets, but not using sweeteners
  • Figure 45: Usage of artificial sweeteners in the last 12 months, by agreement with selected lifestyle statements on diet & health, 2006
• Healthy eating versus slimming
• Appendix
• Introduction
• Advertising data
• Abbreviations
• Internal market environment
• Hot drinks
• Situation is on-going
• Heavy users declining
  • Figure 51: Weight of usage for coffee, tea, milk drinks (including chocolate & cocoa), 2002-06
• Those that do consume are cutting back
• Sugar avoidance, by consumption of hot drinks
  • Figure 52: Agreement with the statement ' I avoid sugar' , by consumption of hot drinks in the last 12 months, 2006
• Tea preferred to coffee by sugar users
• Cereals -- Weight of usage declining
  • Figure 53: Usage of breakfast cereals by type, 2002-06
• Some like it hot
• Sugar avoidance
  • Figure 54: Agreement with the statement ' I avoid sugar' , by consumption of breakfast cereal in the last 12 months, 2006
• Rising health and slimming concerns
  • Figure 55: Adults who are trying to slim, 2002-06
  • Figure 56: Agreement with selected lifestyle statements on diet & health, 2002-06
• Overweight and obese and more likely to avoid sugar
  • Figure 57: Agreement with the statement ' I avoid sugar' , by BMI segments, 2006
• But most are still consuming sugar
• Rise in diabetes
  • Figure 58: The number of people with diabetes in the UK, 1996-2010
• External market environment
  • Figure 59: Agreement with selected lifestyle statements, by demographic sub-group, 2006
  • Figure 60: Adults who are trying to slim, by demographic sub-group, 2006
  • Figure 61: Agreement with the statement ' I avoid sugar' , by demographic sub-group, 2002
  • Figure 62: Agreement with the statements ' It' s worth paying more for organic food' and ' I buy fair trade products when available' , by demographic sub-group, 2006
  • Figure 63: Agreement with the statement ' I avoid sugar' , by demographic sub-group, 2006
• Brand Communication and Promotion
• Sugar
  • Figure 64: Main monitored media spend on sugar, by advertisers, 2002-06
• Artificial sweeteners
  • Figure 65: Main monitored media spend on artificial sweeteners, by advertisers, 2002-06
• Consumer 1 -- Detailed Demographics
• Usage occasions
  • Figure 66: Usage of sugar by occasion, by detailed demographics, October 2006
• Frequency of usage
• Figure 67: frequency of usage by detailed demographics, October 2006
• Key take-outs
• A daily fix
• Younger consumers stick to once a day
• Affluent groups are lighter users
• Consumer 2 -- Detailed Demographics
• Artificial sweeteners
  • Figure 68: Usage of artificial sweeteners in the last 12 months, by demographic sub-group, 2006
• Consumer 3 -- Detailed Demographics
  • Figure 69: Attitudes towards sugar compared to artficial sweetener, by detailed demographics, September 2006
  • Figure 70: Attitudes towards sugar compared to artificial sweeteners, by detailed demographics, September 2006