Adding value and gaining profit with fibre
The positioning "added fibre" in bars can make a big difference in income, according to Lu Ann Williams, Research Director with Innova Database. In 2009, approximately 4,500 new bars contained a claim or a reference to "fibre", which was an increase of 1.2%. Prices of fibre enriched products ranges run from USD 11.4/kg to USD 19.9/kg, a substantial mark-up from regular bars.
Private label share declined in UK
The UK retail market is again in a stage of flux. Competition is increasing as a result of repositioning of the various chains, which can be summarised in the following short statements: Tesco - fighting back, Asda - going back to price, Sainsbury - values & values, Morrisons - moving nationwide, Discounters - it's their time? - M&S - repositioning again!. Edward Garner, Communications Director with Kantar Worldpanel, explains that the retail has not really suffered from the economic crisis, although the demand for certain food categories, like organics have certainly gone down. Bars in the UK are in a very good shape for the future according to the data of the various grocery panels: the demand for bars is increasing in families with young children, and income levels between UK pounds 30,000 - 50,000. The recession has not led to an increase in purchases of private label bars: the branded bars category increased by close to 9% vs. 8% growth in the private label demand, measured 52 w/e 27 Dec. 2009. The total bars market in the UK is estimated at UK pounds 370 million. Key market share growth was recorded for Kellogg, and United Biscuits, while others like Weetabix, Jordan, Mars and Cadbury saw a decline in share from 2007 - 2009.
Market expenditure, average price, frequency of purchase have gone up during 2009 in the UK, which are very positive market conditions, according to Paul Cartwright, Sales and Marketing Director, at HaloFoods, a leading bar manufacturer in the UK. The sector breakdown in 4 categories, showed a 4% decline in demand for "ethical" and "healthy" products, whereas "every day" and "indulgent" bars showed a growth above 5%. Various factors to survive the economic recession and storm, being: working with product optimalisation, improved sourcing fighting increased ingredient prices, being able to reduce overheads, generate improved efficiencies, while managing more and more customer relationships, which can make NPD more selective, lead to closer relationships with suppliers and also new customers.
Effective Private label strategies
Retailers cultivate their private labels via improved marketing, product development, packaging design, and multi-category sub-brands, says Koen de Jong, Managing Director with the leading private label consultancy firm IPLC. The role of the packaging and ingredients industry is increasingly important, as they have noticed a shift in their customer base. Some give retailers a preference in adopting their new innovations over brand manufacturers. Key competences for a private label manufacturer are to manage the complexity in production, being able to be a cost leader, while also being in the position to compete on other elements than price.