The report, in its 27th edition, tracks consumer spending across all major markets.
When it comes to post-Brexit price rises in goods and services, it’s the cost of food that’s keeping British shoppers awake at night. More than four in five (83%) consumers are currently concerned about price rises generally, however 59% cited the impact on their groceries compared to just 26% who are worried that the price of clothes will rocket.
Their fears are well-founded. Rabobank recently warned that consumers “are going to have to get used to higher prices” when the UK leaves the single market. Mintel also noted that food prices are “now on the rise again”, thanks partly to a fall in the value of the pound, which has hit importers and manufacturers in the pocket. These additional costs will gradually be fed through the supply chain with on shelf prices climbing as a result.
Worth noting that…
Only 9% of people spent less on in-home food over the past 12 months; a lower proportion than in the 2016 survey.
Healthy sales for snacks
Nuts and popcorn were amongst 2016’s “rising stars”, Mintel said, with value sales increasing 3% and 10% respectively, against declines elsewhere in the snacks category.
Popcorn brands, in particular, have successfully played on interest in healthier snacks, with many referencing low calorie counts on pack (in addition to traffic light nutritional labels). Sales have reached €174m (£150m). Nuts, meanwhile, are now worth €500m (£430m) to the UK market having catered for interest in high-protein and high-fibre snacks.
Usage of popcorn stands at 38% of adults, increasing to 57% of 16-24 year-olds and 55% of 25-34 year-olds.
Bad news for Bolognese and bacon
The health bandwagon has rolled over other categories, flattening any chance of a reversal in recent declines.
The problems for pasta sauces accelerated in 2016 with market value down 3.5% to €911m (£784m) as stories emerged of the high levels of “hidden sugar” in many products. Mars, which owns the Dolmio and Seeds of Change brands, last year announced that it will be adding “eat occasionally” labels to some of the products in its savoury range that have higher levels of fat, salt and sugar.
Bad press has also hit bacon and sausages: sales have continued to fall following the World Health Organisation’s classification of processed meats as carcinogenic in 2015.
Sugar and salt content are among consumers’ top reasons to limit their cooking sauce intake.
Pleasure and pain for bread
Sales of pre-packed bread in 2016 are expected to fall 10% to €1.73bn (£1.49bn). It remains “the most troubled segment” of the bread and baked goods market, Mintel noted. “Usage frequency has continued to dwindle as consumers increasingly explore alternatives at the key breakfast and lunch occasions.”
And yet white bread – seen as the least healthy and most processed option – managed to grow its share of sales last year. How? Flavour and texture is winning out over health, the experts suggested.
Trade up for treats
The story in bread reflects a “wider willingness” for consumers to treat themselves – and trade up as they do so. Some 42% of biscuit eaters agree that it’s better to eat a small amount of luxury biscuits than a larger amount of regular ones, for instance.
As Mintel’s senior food and drink analyst, Michael Caines, reflected, there will be “mixed fortunes” this year for UK food brands. “… some categories [will continue] to be hit by health concerns, while ‘better-for-you’ products will likely benefit from growing interest in healthier eating”. Value sales of free-from, for example, rocketed 16% last year.
Not all less healthy foods will suffer though. Permissibility will help to “insulate” treat categories with premium products adding value, Caines added.