New Profit Opportunities in Health, Convenience & Indulgence: Insight into the major drivers in the food and drinks industry

Introduction to the megatrends 12

Consumer lifestyle drivers 12

Industry drivers 13

Market evaluation 14

Marketing mix 15

Case studies 15

Industry opinion 16

Summary 18

Introduction 18

• Consumer lifestyle drivers 18
• Industry dynamics 19
• Market evaluation 19
• Marketing mix 20

Summary 22

Introduction 22

Convenience 23

• Changing household structure 23
• More working women 24
• Changing working patterns 25
• Effects of time pressure on purchasing decisions 26

Health 28

• Natural, organic and information-rich 29
• Low and light 32
• Functional and fortified - positive nutrition 35

Pleasure 38

• Indulgent and premium 41
• Novel and fun 42
• Ethnic and exotic 42

Summary 46

Introduction 46

Route to higher margins 47

Increased consumer loyalty 50

Gain greater share of stomach 52

Chapter 4 Market Evaluation 56

Summary 56

Introduction 56

Methodology 59

Bakery 62

• Biscuits 62
• Bread and Rolls 63
• Morning goods, cakes and pastries 64

Canned food 65

Cereal bars 66

Breakfast cereals 67

Chilled food 68

Confectionery 69

• Chocolate 69
• Gum 70
• Sugar confectionery 71

Meal solutions 72

• Cooking sauces 72
• Chilled ready meals 73
• Chilled pizza 74
• Frozen ready meals 75
• Frozen pizza 76

Dairy 77

• Cheese 77
• Chilled desserts 78
• Yogurt, milk and cream 79
• Ice cream 80

Frozen food 81

Snacks - nuts and seeds 82

Snacks - popcorn 83

Snacks - potato chips/crisps 84

Snacks - savoury 85

Drinks - soft 86

• Bottled water 86
• Carbonates 87
• Concentrates 88
• Energy and sports drinks 89
• Juices and fruit drinks 90
• New age beverages 91

Drinks - alcoholic 92

• Beer and cider 92
• Spirits 93

Drinks - hot 94

• Coffee 94
• Hot chocolate 95
• Tea 96

Regional comparison 97

Chapter 5 Marketing Mix 100

Summary 100

Introduction 100

Price point 101

• How should a price point be chosen? 101
• Multi-pricing strategies 102

Packaging 104

• Health product packaging 104
• Premium product packaging 105
• Convenient packaging 106

Promotion 107

Distribution 109

Chapter 6 Case Studies 112

Summary 112

Introduction 112

Case study 1 113

• Sainsbury s private label cheddar 113

Case study 2 116

• Patak s Foods 116

Case study 3 119

• Walnut Ridge South African cooking sauce 119

Innovative product launches in each megatrend 122

• Bakery 122
• Canned food 123
• Cereals 124
• Chilled food 125
• Confectionery 126
• Cooking sauces 127
• Dairy 128
• Frozen food 129
• Pizza 130
• Ready meals 131
• Snacks 132
• Drinks - alcoholic 133
• Drinks - hot 134
• Drinks - soft 135

Summary 138

Introduction 138

Importance of each megatrend 139

Importance of each megatrend for the consumer versus the food and drinks industry 140

Importance of each megatrend in justifying a higher margin  versus engendering consumer loyalty  142

Objectives when developing and marketing products that fit with consumer megatrends 144

Important consumer groups for healthy, convenient and pleasurable products 146

The importance of each channel for communicating added value to the consumer 147

Most important locations and channels for healthy, convenient and pleasurable products 148

Most important ethnic influences on new product development 149

Important consumption occasions for healthy, convenient and pleasurable products 150

Figure 2.1: Breakfast meals skipped by age group 27

Figure 2.2: All-day snacking 27

Figure 2.3: Proportion of population over 50, 1994-2006e 37

Figure 2.4: Factors perceived to be among the most important influences on food choice in the EU, 1996 (%) 39

Figure 2.5: Top selling books on food and drink, November 2002 40

Figure 2.6: Visits abroad (millions), by country 1995-2005e 43

Figure 3.7: Which pricing/sales strategy? 47

Figure 4.8: Martket evaluation methodology 61

Figure 4.9: Average price point (US$), by product positioning for the biscuits category 62

Figure 4.10: Biscuits megatrend opportunities, 2002-2007 62

Figure 4.11: Bread and rolls megatrend opportunities, 2002-2007 63

Figure 4.12: Average price point (US$), by product positioning in Bread and Rolls category 63

Figure 4.13: Average price point (US$), by product positioning in morning goods, cakes and pastries category 64

Figure 4.14: Morning goods, cakes and pastries megatrend opportunities, 2002-2007 64

Figure 4.15: Average price point (US$), by product positioning in canned goods category 65

Figure 4.16: Average price point (US$), by product positioning in cereal bars category 66

Figure 4.17: Cereal bar megatrend opportunities, 2002-2007 66

Figure 4.18: Breakfast cereal megatrend opportunities, 2002-2007 67

Figure 4.19: Average price point (US$), by product positioning in breakfast cereals category 67

Figure 4.20: Average price point (US$), by product positioning in chilled food category 68

Figure 4.21: Chocolate megatrend opportunities, 2002-2007 69

Figure 4.22: Average price point (US$), by product positioning in chocolate category 69

Figure 4.23: Average price point (US$), by product positioning in gum category 70

Figure 4.24: Gum megatrend opportunities, 2002-2007 70

Figure 4.25: Average price point (US$), by product positioning in sugar confectionery category 71

Figure 4.26: Sugar confectionery megatrend opportunities, 2002-2007 71

Figure 4.27: Cooking sauce megatrend opportunities, 2002-2007 72

Figure 4.28: Average price point (US$), by product positioning in cooking sauces category 72

Figure 4.29: Average price point (US$), by product positioning in chilled ready meals 73

Figure 4.30: Chilled ready meal megatrend opportunities, 2002-2007 73

Figure 4.31: Average price point (US$), by product positioning in chilled pizza 74

Figure 4.32: Chilled pizza megatrend opportunities, 2002-2007 74

Figure 4.33: Frozen ready meal megatrend opportunities, 2002-2007 75

Figure 4.34: Average price point (US$), by product positioning in frozen ready meals 75

Figure 4.35: Average price point (US$), by product positioning in frozen pizza 76

Figure 4.36: Frozen pizza megatrend opportunities, 2002-2007 76

Figure 4.37: Cheese megatrend opportunities, 2002-2007 77

Figure 4.38: Average price point (US$), by product positioning in cheese category 77

Figure 4.39: Average price point (US$), by product positioning in chilled desserts category 78

Figure 4.40: Chilled dessert megatrend opportunities, 2002-2007 78

Figure 4.41: Yogurt, milk and cream megatrend opportunities, 2002-2007 79

Figure 4.42: Average price point (US$), by product positioning in yogurt, milk and cream category 79

Figure 4.43: Average price point (US$), by product positioning in ice cream 80

Figure 4.44: Ice cream megatrend opportunities, 2002-2007 80

Figure 4.45: Average price point (US$), by product positioning in frozen food 81

Figure 4.46: Average price point (US$), by product positioning in nuts and seeds category 82

Figure 4.47: Nuts and seed snacks megatrend opportunities, 2002-2007 82

Figure 4.48: Popcorn megatrend opportunities, 2002-2007 83

Figure 4.49: Average price point (US$), by product positioning in popcorn 83

Figure 4.50: Average price point (US$), by product positioning in potato chips/crisps category 84

Figure 4.51: Potato chip megatrend opportunities, 2002-2007 84

Figure 4.52: Savoury snack megatrend opportunities, 2002-2007 85

Figure 4.53: Average price point (US$), by product positioning in savoury snacks category 85

Figure 4.54: Average price point (US$), by product positioning in bottled water category 86

Figure 4.55: Bottled water megatrend opportunities, 2002-2007 86

Figure 4.56: Carbonated soft drinks megatrend opportunities, 2002-2007 87

Figure 4.57: Average price point (US$), by product positioning in carbonates category 87

Figure 4.58: Average price point (US$), by product positioning in concentrates category 88

Figure 4.59: Concentrates megatrend opportunities, 2002-2007 88

Figure 4.60: Energy and sports drinks megatrend opportunities, 2002-2007 89

Figure 4.61: Average price point (US$), by product positioning in energy and sports drinks 89

Figure 4.62: Average price point (US$), by product positioning in juices and fruit drinks 90

Figure 4.63: Juice and fruit drink megatrend opportunities, 2002-2007 90

Figure 4.64: New age beverage megatrend opportunities, 2002-2007 91

Figure 4.65: Average price point (US$), by product positioning in new age beverages 91

Figure 4.66: Average price point (US$), by product positioning in beer and cider 92

Figure 4.67: Beer and cider megatrend opportunities, 2002-2007 92

Figure 4.68: Spirits megatrend opportunities, 2002-2007 93

Figure 4.69: Average price point (US$), by product positioning in spirits 93

Figure 4.70: Coffee megatrend opportunities, 2002-2007 94

Figure 4.71: Average price point (US$), by product positioning in coffee 94

Figure 4.72: Average price point (US$), by product positioning in hot chocolate category 95

Figure 4.73: Average price point (US$), by product positioning in tea category 96

Figure 4.74: Tea megatrend opportunities, 2002-2007 96

Figure 5.75: Example demand curve 102

Figure 5.76: Demand curve with multi-pricing strategy 103

Figure 5.77: Health versus indulgence 107

Figure 6.78: Sainsbury s private label cheddar 113

Figure 6.79: Price range of private label cheddar 115

Figure 6.80: Tikka Masala Wrap kit  118

Figure 6.81: Walnut Ridge Cape Malay Curry  cooking sauce 120

Figure 6.82: Innovative new product launches: Bakery 122

Figure 6.83: Innovative new product launches: Canned food 123

Figure 6.84: Innovative new product launches: Cereals 124

Figure 6.85: Innovative new product launches: Chilled food 125

Figure 6.86: Innovative new product launches: Confectionery 126

Figure 6.87: Innovative new product launches: Cooking sauces 127

Figure 6.88: Innovative new product launches: Dairy 128

Figure 6.89: Innovative new product launches: Frozen food 129

Figure 6.90: Innovative new product launches: Pizza 130

Figure 6.91: Innovative new product launches: Ready Meals 131

Figure 6.92: Innovative new product launches: Snacks 132

Figure 6.93: Innovative new product launches: Alcoholic drinks 133

Figure 6.94: Innovative new product launches: Hot drinks 134

Figure 6.95: Innovative new product launches: Soft drinks 135

Figure 7.96: Importance of each megatrend in the food and drinks market 140

Figure 7.97: Importance of the each megatrend for the consumer versus the food industry 141

Figure 7.98: Importance of each megatrend in justifying a higher margin  versus engendering consumer loyalty  143

Figure 7.99: Objectives when developing and marketing products that fit with consumer megatrends 145

Figure 7.100: Important consumer groups for healthy, convenient and pleasurable products 146

Figure 7.101: The importance of each channel for communicating added value to the consumer 147

Figure 7.102: Most important locations and channels for healthy, convenient and pleasurable products 148

Figure 7.103: Most important ethnic influences on new product development 149

Figure 7.104: Important consumption occasions for healthy, convenient and pleasurable products150

Table 1.1: Top 20 sector profit opportunities for the consumer megatrends 14

Table 2.2: Average household size, 1998-2002 23

Table 2.3: Women s share of the labour force, 2000-2004e 24

Table 2.4: Average length of the working week, 1999 25

Table 2.5: Survey of low and light use among U.S. adults: by gender 34

Table 2.6: Survey of top five reasons for low and light use among U.S. adults 34

Table 2.7: Prevalence of obesity (millions), 1990-2010 34

Table 2.8: Proportion of population over 50, 1994-2006e 37

Table 4.9: Top 100 sector profit opportunities for the consumer megatrends -1 of 3 57

Table 4.10: Top 100 sector profit opportunities for the consumer megatrends -2 of 3 58

Table 4.11: Top 100 sector profit opportunities for the consumer megatrends -3 of 3 59

Table 4.12: Top 40 regional profit opportunities for the consumer megatrends 97