It’s been a mixed bag for the grocery sector this year, according to a joint report from the global analytics company Nielsen and our colleagues at The Grocer, with half of the 112 food and drink categories measured over the 52 weeks to September 2019 found to be in decline.
In food retail, bread, handheld ice cream, yoghurts and meat categories all posted losses from last year, with the latter down a remarkable £184.6m.
Meat’s struggles in 2019 have been partly attributed to the continuing plant-based wave, while red meat has come under increasing scrutiny in terms of health and the impact on the environment. Lower meat prices, Brexit uncertainty (and the ensuing drop in consumer confidence) and poor summer weather are also said to be factors.
This drop in consumer confidence, reads the report, has aided the rise in indulgence and snacking, with chocolate reported to be the fastest growing grocery category of 2019, both in terms of food and overall.
Top 5 fastest-growing food categories in grocery 2019
- Chocolate – sustained innovation in NPD, specifically for dark variants, premium gift formats and healthy options, has led to a boost of £183.5m in the last year.
- Bagged snacks – while volumes remained flat at 0.9%, bagged snacks benefited from a rise in crisp prices due to poor potato harvests, recording an increase of £134.1m.
- Free from – a healthy £122.2m increase for the booming category, with dairy-free brands said to be leading the way for the category.
- Meat free – another successful year for the category, with the rise in flexitarian diets and relentless innovation having driven the £61.9m increase.
- Veg – the likes of onions, broccoli and carrots were found to have posted large value gains despite stable volumes, with inflation said to be behind veg’s £54m gain.
Within the buoyant chocolate category (which passed the £4bn mark), the report found that Cadbury took an impressive £566.7m in 2019, up 8.9% (+£46.4m) from 2018.
The success of Britain’s best-selling chocolate brand is testament to the power of innovation and well-aimed NPD. The company has invested in the healthier side of the game, launching its 30% Less Sugar variant in the summer and their higher-cocoa Darkmilk at the end of 2018.
At the other end of the league table, the lack of NPD is cited as a main reason for the failures of the yoghurt category, which lost £50.6m over the past year, with there being a general lack of transformative innovation across the majority of the grocery sector over the past year.
“All along the supply chain, the focus has been on practical fire-fighting instead of future-proofing their businesses,” says Ashley Pollock, assistant manager for innovation at consultancy Ayming.
“In the UK, we’re seeing less of those exciting, completely new, eating experiences.”
Last month, Yaar founder Andrei Garbuz told Food Spark that innovations are critical to the future of the whole dairy category, with British consumers falling out of love with traditional dairy products.
With uncertain times ahead due to Brexit, innovation is suffering, says the report, with a recent survey by Ayming found only 48% of UK businesses expect R&D budgets to increase in the next three years.
4 fastest-falling food categories in grocery 2019
- Meat – The rise of discounters, 2019’s poor BBQ weather and the flexitarian trend all contributed to the £184.6m loss in sales.
- Yoghurt – Consumers falling out of love with diet-focused options such as fat free, and rejecting yoghurt as a dessert option, saw the category lose £50.6m in 2019.
- Handheld ice cream – poor summer weather is once again partly to blame here, with the category losing £40.1m.
- Bread – a 37.5m loss is partly the result of consumers turning more to wrapped bakery options, with big names in bread said to be under increasing pressure from cheaper own label brands.