Whether because of media focus, impending legislation, or greater demand, awareness of what and how much we eat is growing. Manufacturers are responding with reformulated products and reduced portion sizes, alongside a range of ‘better for you’ drinks, snacks and meals.
Sales of these products only make up a small percentage of the market, but as healthier options move from marginal to mainstream, more retailers are giving up space to healthier on-the-go snacks, a gluten-free or free-from range, and products from big-name brands that have confirmed a commitment to tackling obesity and the rise in illnesses such as type 2 diabetes. Foodservice operators are also looking to provide customers with alternatives to the chocolate bar or the full-fat soft drink, and this is only likely to become even more prominent next year.
Snack time
Whether it is popcorn or energy balls, healthier snacking is one area where there is room for innovation. According to Amy Price, senior food and drink analyst at Mintel, only 11% of snack products launched in the UK in 2015 claimed to have reduced, low or no sugar, while 8% claimed the same for fat and 4% the same for calories.
“New product development is failing to cater to the demand for healthier products,” she says. But, the trend is growing, with brands like Graze, Proper Corn, PopChips, Deliciously Ella, Bear and Calbee all carving out a space.
Ben McKechnie, MD of healthy food wholesaler Epicurium, says that he has seen strong growth in healthy snacks over the past year. “Low or no added sugar is the hot topic of the moment and raw is increasing its pulling power,” he reports, adding that awareness is also increasing of the health benefits of products made without refined, artificial or unnecessary ingredients.
Best Health
While he does not believe this market will overtake big brands, he says healthier products create a strong point of difference and can increase customer loyalty to local stores. He has also seen more foodservice operators asking for healthier snacks in canteens and workplaces.
Major players are waking up to the opportunities, too. Matt Collins, trading controller for convenience and wholesale at KP Snacks, says that the company recognises health and permissibility as growing trends, with KP launching a baked Hula Hoops earlier this year.
Confectionery giants, including Mars and Nestlé, have also followed through on a voluntary commitment made in 2011 to improve the nation’s health through the government’s Public Health Responsibility Deal, when they agreed to reduce the portion size of single-serve confectionery products to 250 calories.
Drink to that
Innovation in the soft-drinks category was galvanised by George Osborne’s pledge this year to introduce a levy on sugary drinks. The announcement was met with resistance from members of the industry, many of whom have since fed into the government’s consultation.
It is now unclear whether the tax will definitely go ahead in April 2018. Manufacturers, including Britvic, argue that they have already committed to reducing the average number of calories per serving by a fifth by 2020, and that nearly two-thirds of their new products would be low-sugar or nutritionally enhanced.
Other manufacturers continue to follow suit, with Ribena Lucozade Suntory launching Lucozade Zero. Volvic has formulated its new Juiced range to contain reduced sugar levels of 4.9g per 100ml. Coca-Cola European Partners (CCEP) will have invested £30m between 2012 and 2017 in reformulation and product development, including Coca-Cola Zero.
CCEP external communications manager Amy Burgess, says: “Demand for lighter drinks is rising, and in response, wholesalers should consider reviewing their soft-drinks range. Retailers should consider their best-selling products and stock a light equivalent where available to ensure that consumers can still enjoy their favourite flavours with no added sugar.”
Bottled water is fast out-pacing other drinks, too. This year, Highland Spring, announced it was doubling its bottling capacity to 500m litres by 2017, after sales of bottled water grew 9% last year. Numerous challenger brands will also be looking to make their mark here next year, including Nuva and Rejuvenation, making it an area worthy of wholesalers’ time, space and investment.
Free-from
The free-from market has gone from strength to strength, outpacing regular grocery sales. According to Mintel, the UK market is forecast to grow by 50% by 2019, fuelled not only by customers buying allergen-free products for medical conditions such as Coeliac disease, but because of the perceived health benefits.
There is also a shift in foodservice. Apetitio, one of the leading suppliers to the health and social care sector, has just launched an allergen-free range under its subsidiary Wiltshire Farms; brands such as Pizza Express, Carluccio’s and Pho are all offering gluten-free options, too.
Andrew MacIntosh, from Suma Wholesale, which distributes vegetarian, organic and Fairtrade foods nationally, says the emerging market is not coming from the traditional wholefoods customer base.
“The paleo diet is making its way over from the States, and we are about to lap that up,” he adds. He also cites the unstoppable rise of sports-based protein- enhanced products.
He adds: “Our biggest growing customer base is Turkish-owned convenience stores in east London. On one street, we have 38 convenience customers. Meanwhile, in rural areas, it is farm shops and destination shops. There is one Costcutter in London with a whole aisle dedicated to organic. The market has become mainstream.” This is reflected in companies such as Nestlé Cereal Partners entering the gluten-free market last year. Convenience and cash & carry channel manager Julie Aird, says: “We have had an ongoing plan over the past few years to consistently reduce our sugar and salt levels, and we have bought specifically low-sugar products to the market. We also bought out gluten-free cereals a year ago, as well as protein cereals as part of the Shreddies family.”
Retailer Voices
Sunita Kanj, Family Shopper, Little Hulton
“My priority is to educate my customers around sugar and the sugar tax. I want to educate them about healthy alternatives because I don’t think manufacturers are doing enough.”
Vip Measuria, One Stop, Draycott
“The market is changing in lots of categories. For example, years ago, Ribena Light did not sell for us, now it is flying out as people become more conscious of sugar.”
Vince Malone, Tenby Stores
“I’m in the process of creating a free-from range. We tried one around 18 months ago, but it didn’t work. Now, from what I’ve read and hear, the climate could be right. To really sweat the space, I’d like around £200 sales from it every week, and we’ll get the word out via social media.”
