Canned Foods - Market Report Plus
This Key Note Market Report Plus examines the UK canned foods market. Following relatively strong sales growth in 2004 and 2005 — spurred by a wave of innovation and new product development (NPD) — growth in the market slowed in 2006 and 2007. In 2008, sales jumped strongly in value terms, fuelled by steep food price inflation and increases in the price of tins.
The canned foods market is divided into eight main sectors: vegetables, fish, soup, meat, fruit, pasta, desserts and cooking sauces. Canned vegetables was the largest sector in 2008 with retail sales of £629m, representing a 29.1% share of the total market. With the exception of fruit and cooking sauces, most sectors experienced growth in value terms between 2004 and 2008, whereas, in volume terms, sales declined in every sector (although volume sales of baked beans, a category within the canned vegetables sector, increased over this period). Some suppliers have claimed that the recession has had a very positive effect on the canned foods market as it has prompted consumers to stock up on less expensive goods. However, in fact, the recession has simply slowed the overall decline in volume sales rather than spurred an increase.
The UK canned foods market is dominated by multinational companies with strong brands and immense buying power; therefore, it is very difficult for new companies to enter the market. Major companies in the UK include Heinz, Princes (part of Japan-based Mitsubishi) and Del Monte. Unlike other areas of the food industry, few specialist niche players have been attracted to the canned foods market. This may be because the barriers to entry are so high, or simply because the market is perceived to be in long-term decline.
In May 2009, Key Note commissioned a NEMS Market Research survey to assess consumer attitudes towards canned foods. The survey produced some surprising findings, notably that the recession may not have had as big an impact on the market as some suppliers are claiming, as only 7.4% of respondents cited good value as the main reason for purchasing canned foods. However, the survey did confirm the importance of convenience to canned food purchasers, with nearly six out of ten adults buying the products for this reason.
Key Note forecasts that the canned foods market will experience relatively rapid growth in value terms over the 5 years to 2013, and will increase by 49.7% between 2004 and 2013. In 2009, growth is likely to be propelled by the recession as the volume decline slows, and high unemployment will continue to support volume sales in 2010. Thereafter, buoyant commodity prices are likely to be the main factor behind the value growth of the market. However, some areas of the market, such as canned fruit and cooking sauces, are likely to see declines towards the end of the forecast period, as consumers trade up to alternatively packaged products.
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