Consumer desire for premium products, even in their everyday shop, is driving significant rises in value sales for the UK's top grocery brands, as they tailor their products to meet the trend.
The 2004 Biggest Brands table shows that 39 of this year's top 50 brands enjoyed increases in the 12 months to June, six of them by 20% or more - no mean feat in largely mature categories that offer little scope to increase prices. Of the eight that did experience declines, only one suffered a loss of more than 4%.
The table, compiled exclusively for Marketing by TNS Superpanel, is based on sales from supermarkets. There is also a top 10 for impulse brands, based on sales in supermarkets and impulse outlets.
Brands may move up the tables due to successful marketing, product launches, trade promotion activity or broader distribution. They may slip down because of a lack of marketing support or greater competition. But the most successful brands - in absolute sales terms as well as sales increases - are those that best tap into (sometimes contradictory) consumer desires such as health, indulgence and a search for value.
Walkers, the leading FMCG brand by super-market sales, is an example of a company that has combined product development, strong promotional activity and memorable advertising to good effect.
Sales of its crisps and snacks rose 12% last year to £535m. At the same time, its penetration increased to 86.5% of all households.
Walkers' basic crisps make up roughly half the brand's sales and grew 5% over the year, largely through the introduction of bigger multi-pack sizes and a limited-edition 30-pack box. However, its upmarket Sensations line saw the biggest growth, with sales jumping 55% to almost £45m following the introduction of new flavours.
Sensations has cleverly exploited consumers' desire for premium products with its positioning as a 'posh crisp'. Its most recent press campaign, by Abbott Mead Vickers BBDO, brings to life the indulgent, adult nature of the brand by showing 'It girl' Tara Palmer-Tomkinson in a range of outfits made from some of the crisps' ingredients.
The biggest sales decline in the top 50 came from another brand within the crisps and savoury snacks category, KP, whose sales fell 7% over the year to about £145m. With a penetration of 62.6%, KP is the second-biggest brand in bagged snacks and the leading branded player in nuts.
The decline comes in spite of product development at the company. Last August KP launched a range of premium peanuts, including Cracked Black Pepper, Vine-ripened Tomato and Mild Indian Spice variants. It has added two flavours to its Mini Cheddars Crinkly line, and the reintroduction of the Steak & Ale variant of its Real McCoy's crisps helped the range achieve 8% sales growth.
KP's performance has been held back by weak sales of lines such as Hula Hoops and Skips, which operate in the slowly declining multi-pack crisp and snack sector. Parent United Biscuits has tried to rekindle sales with price reductions and promotions, but these activities have not been enough to stop consumers switching their purchasing from multi-packs into the growing sharing sector, nor to counter Walkers' growth.
The biggest sales growth in the table was experienced by wine brand Hardys, which rose 41% to a value of nearly £210m. It was helped by the success of sub-brand Banrock Station, whose supermarket sales soared 30% over the year to nearly £55m, and the Varietal line, which grew by 71%. Hardys Stamp, by contrast, fell 7%, while still notching up a healthy £45m in sales.
The discrepancy between the performance of different Hardys labels is explained by wine's heavy dependence on promotion. The company is unlikely to promote all its wines at once because of the high risk of cannibalisation.
In common with other wine brands, Hardys is looking to advertise more to win over younger consumers, whom it can then persuade to trade up to more expensive wines.
Although there are four beer and lager brands among the top 50, Hardys, whose wines are now drunk in nearly a quarter of all households, is the only wine brand listed - surprising, perhaps, given wine's leading position in the branded categories table (page 33). This may reflect the fact that branding has come only recently to the wine market. While there are many brands in the sector - more than 700, according to some estimates - most are insufficiently established to have earned the iconic status enjoyed by most of the top 50.
Hardys' Banrock Station label is doing its best to buck the trend. It recently embarked on a PR drive using the theme 'For outside life', intended to highlight its associations with Australia and its involvement in wetland conservation. The campaign included sponsorship of BBQ Week during the first week of June. The label has also embarked on a sampling and promotional campaign in supermarkets.
The biggest of the alcohol brands in the top 50 was Stella Artois at number 10. The lager managed to increase sales by 11% to nearly £310m over the past year, twice the size of closest beer rival Carlsberg. Stella increased its market penetration - nearly 28% of British households bought the brand in the 12 months to June - while also persuading existing consumers to buy it more frequently.
The average Stella buyer bought the brand on 5.2 occasions, an increase of 5%, pushing supermarket volume sales up 10% to to 167m litres.
Much of this increase was driven by the popular 24-packs, which now account for more than half of all Stella Artois sales and offer value for money to the premium lager drinker.
The success of the brand continues to be underpinned by its quirky and memorable TV ads, created by Lowe. These commercials were first tested 14 years ago and, nine executions later, have collected more than 150 creative and effectiveness awards. The advertising has managed to sustain the brand's premium positioning, as the 'Reassuringly expensive' slogan continues to resonate despite heavy discounting in the multiples. As a result, the lager has broad appeal: it is as likely to be drunk in an upmarket bar as it is in a pub.
A heavy focus on innovation and product development has paid dividends for toiletry brand Dove, whose sales grew by 24% to about £110m, increasing penetration to 46% of households in the process. Dove has expanded from a bar soap brand into a series of toiletries categories, including shower and bath liquids, liquid soap, shampoo and conditioner, skincare and deodorants. Strong promotional support has backed the brand in each of the categories in which it now operates.
A good example of this success is the much-publicised launch of the Dove Firming range, targeting 'real' women.
Parent Lever Faberge has said that the associated ad campaign, created by Ogilvy & Mather and featuring curvy models, has helped drive a 700% rise in sales of Dove Firming products during the first half of this year.
One brand that is bucking the overall trend toward premium products is Bernard Matthews, ranked ninth after sales grew by 1% to about £340m. It may not appeal to 'foodies', but the brand has a 70% penetration of UK households.
Bernard Matthews' success rests on its presence across a number of categories.
It has extended its core brand offering from sliced cooked meats and fresh and frozen processed poultry into products such as turkey burgers and nuggets, which are now driving growth in the category. It has launched several successful products this year, including pasties and sausage rolls.
The ongoing success of the non-premium Bernard Matthews underlines the complexities of trying to summarise consumer buying trends across such a broad range of products. For this reason, grocery categories are analysed in more detail in the following pages.
TOP 50 SUPERMARKET BRANDS
Rnk Brand Sales (pounds m) % Penetration
2004 2003 chng (%)
1 Walkers crisps/snacks 530-535 470-475 12 86.5
2 Birds Eye 515-520 520-525 -1 82.8
3 Kellogg 495-500 475-480 4 81.5
4 Cadbury 480-485 440-445 9 86.7
5 Heinz 435-440 430-435 1 92.1
6 Coke/Diet Coke 385-390 385-390 0 62.0
7 Muller 375-380 370-375 1 73.8
8 McVitie's 340-345 340-345 -1 90.2
9 Bernard Matthews 340-345 335-340 1 70.7
10 Stella Artois 305-310 275-280 11 27.9
11 Pampers 265-270 240-245 11 17.0
12 Warburtons 250-255 210-215 18 58.9
13 Hovis 250-255 225-230 11 73.5
14 Nescafe 245-250 255-260 -3 53.9
15 Andrex 230-235 215-220 7 57.0
16 Kingsmill 210-215 185-190 14 69.5
17 McCain 210-215 210-215 0 69.6
18 Whiskas 210-215 195-200 8 20.7
19 Weight Watchers 210-215 170-175 21 48.7
20 Nestle cereals 205-210 190-195 8 59.9
21 Gillette 205-210 205-210 2 50.1
22 Hardys 205-210 145-150 41 24.9
23 Persil 205-210 205-210 1 45.9
24 Robinsons 200-205 185-190 9 61.7
25 Pedigree 195-200 185-190 5 24.0
26 Carlsberg 170-175 135-140 29 17.7
27 Young's 170-175 150-155 12 58.6
28 Felix 160-165 155-160 3 18.4
29 Danone 155-160 125-130 26 47.7
30 Princes Foods 155-160 140-145 11 74.8
31 Ariel 150-155 155-160 -2 33.9
32 Flora 150-155 145-150 1 46.1
33 Carling 145-150 120-125 20 13.3
34 Wall's 145-150 145-150 0 62.2
35 Pepsi 140-145 130-135 12 35.5
36 KP 140-145 150-155 -7 62.6
37 Nivea 130-135 120-125 5 38.1
38 Colgate 130-135 120-125 5 60.9
39 Silver Spoon 130-135 120-125 6 72.0
40 Huggies 125-130 130-135 -4 12.0
41 Jacob's 115-120 100-115 5 75.9
42 Comfort 115-120 110-115 4 51.6
43 Kit Kat 110-115 110-115 2 63.2
44 Lynx 110-115 95-100 13 32.3
45 Lurpak 105-110 100-105 10 32.0
46 Dove 105-110 85-90 24 46.1
47 Mr Kipling 105-110 110-115 -3 50.8
48 Olay 105-110 95-100 11 20.7
49 Pringles 105-110 95-100 13 53.1
50 John West Foods 100-105 100-105 0 58.9
Source: TNS Superpanel
BIGGEST BRANDS DATA SOURCE AND METHODOLOGY
All data used to compile the Biggest Brands list has been provided by TNS using syndicated databases from the Superpanel and Impulse services.
Superpanel is a sample of 15,000 households around the UK. This is representative demographically, and geographically of the UK as a whole. Using an in-home barcode-scanning device, panellists scan their entire take-home purchasing.
As the sample is representative, these purchase records can be grossed up to represent purchasing behaviour of every UK home. The list has been compiled from the Superpanel Retailer Share Track database, which is a total grocery database covering 234 of the biggest markets within five categories (fresh foods, packaged grocery, alcohol, toiletries and healthcare). Superpanel covers 'take-home' purchasing only.
To cover products that may be more likely to be consumed out of the home, data has also been provided on the biggest brands within impulse categories.
TNS' Impulse panel covers nine categories and uses a panel of 5250 individuals who record their impulse purchases from all outlets.
Details of their purchases are retrieved by TNS using computer-assisted telephone interviewing techniques. All data provided is for the 52 weeks ending 20 June 2004.
For Biggest Brands, TNS has grouped together products that appear under the same brand name. When listing the biggest brands within individual categories, TNS has taken a more detailed perspective and gone down to a lower level, closer to that of 'product'.
For the purpose of this exercise, TNS has therefore excluded all private labels, even though retailers, with some justification, could claim to have become experts in portraying brand values.