This year's star performers have tapped into trends of health, indulgence and provenance.
A growing credit/debit approach to life by consumers keen to eat healthily but reward themselves with indulgent treats boosted the value of the UK's top grocery brands last year. These two trends fuelled a rise in sales for 72% of the top 50 brands, compared with only 60% last year.
The 2006 Biggest Brands table, compiled exclusively for Marketing by TNS Worldpanel, shows that 36 of the top 50 brands grew their sales last year, with stand-out performances from Blossom Hill (up 37%), Danone (21%), Young's and Johnson & Johnson (both 20%). Thirteen brands lost sales - the same number as last year. The worst hit were Pampers (down 13%), Ariel (12%) and Carling (11%).
As the most comprehensive overview of grocery brand sales over a 12-month period, this data offers a yardstick for consumerism today, allowing marketers to track the brands outperforming or underperforming their rivals, and to spot category trends.
Many of the top-50 names have moved up the table due to a combination of successful marketing, product launches, trade promotion activity and broader distribution. Similarly, they may have fallen because of a lack of marketing support, increased competition, or, indeed, too much promotion - the latter a key trend to have emerged from the data this year.
The most successful brands, in absolute income terms as well as sales increases, are those that best tap into the underlying trends of health and wellbeing, indulgence and convenience - and any combination of these attributes. What is also clear from the sales figures is that, although consumers are unsurprisingly motivated by healthier products, they are not prepared to sacrifice taste. Provenance and authenticity are other factors to emerge as important drivers to purchase.
'Health and wellbeing is an accelerating trend, and had the most important influence on grocery sales over the past year,' says Chris Longbottom, a director of the TNS Worldpanel service. 'Government initiatives, media coverage and the influence of celebrity chefs such as Jamie Oliver and Gordon Ramsay mean that healthy eating is now on the agenda of a growing number of households.'
This trend is reflected in the growth of 'real' foods, such as wholegrain bread, and those promising functional health benefits, such as probiotic or cholesterol-lowering properties, with a shift away from 'diet', low-fat and low-carbohydrate foods. Warburtons, Hovis, Danone and Flora, which all enjoyed double-digit sales growth this year, have been beneficiaries of this trend.
Another accelerating development, albeit secondary, is the rise of premium and indulgence products, reflecting consumers' growing affluence and a more pronounced credit/debit approach to life - that is, people feel they deserve a reward for eating healthily and doing more exercise. 'The success of brands such as Walkers, Cadbury, Coca-Cola and Stella Artois show how easy it is to get seduced by health trends, as they exemplify a massive counter-trend toward indulgence,' says Jonathan Hall, global client managing director of Added Value.
Admittedly, the performance of both Walkers and Coca-Cola is boosted by their 'lighter' variants, but the fact is that people seeking healthy options do not look for them in crisps, chocolate, cola or lager.
The success of Warburtons and Hovis exemplifies the benefits to be reaped by tapping into a number of trends. Both these brands have focused on health, premiumisation, provenance and authenticity with almost constant innovation. Warburtons is successfully exporting its strong northern, family heritage to the rest of the UK, while Hovis has gone back to its 'baker boy' roots with more traditional packaging, re-running its old advertising and reverting to its 'Good for you' strapline. Hovis also claims to be the only mainstream brand not to use artificial flavourings and preservatives. Sales of both brands have been driven by strong growth in their healthier - and more expensive - brown and seeded variants.
The bread sector is also likely to have been boosted by the backlash against diets that advocated the non-consumption of carbohydrates.
Hall calls Warburtons 'the Muller of ambient bakery'. He explains: 'It has stayed focused on what it is good at and is very innovative in the way it thinks about potential occasions. It has taken note of health as it grows and innovates, but it has stayed close to its core. It is an exemplar of brand management.'
Danone, which Hall views as 'the gold standard in health and nutrition', has grown sales 21% and moved five places up the rankings this year on the back of the growing popularity of its probiotic Actimel yoghurt drink and Activia yoghurt, which together account for 75% of its sales.
Danone's strategy is to shift further into the health and nutrition area, a plan helped by the fact that the sectors in which it operates - dairy, water, biscuits and cereals - means that it already has something of a 'healthy' positioning. 'Whether by good luck or good management, it has not had to divest anything and has a strong platform to build on,' says Hall.
Flora, meanwhile, is also developing functional health sub-brands with its pro.activ and Omega 3 Plus ranges. 'The health message is very strong, and will allow it to move into adjacent dairy areas, such as probiotic drinks, yoghurts and cheese,' says Hall.
Young's, which produces a range of frozen fish and seafood, has bucked the declining sales trend in the frozen market with sales growth of 20% this year. This is principally due to the perception of fish as healthy, and purchase has been driven by TV advertising that focuses on the products' provenance. Young's has helped its cause by being strong on NPD. Young's, Princes and John West have also enjoyed double-digit growth this year as consumers combined the convenience of a frozen or canned product with the perceived healthy properties of fish.
Responding to consumer desire for convenience is largely a given now, according to Longbottom. However, a slight counter-trend, and one that ties in with health, is a small but discernible shift toward 'slow food' - a trend reflected in falling sales in the chilled and frozen categories as people seek out 'fresher' and more 'authentic' alternatives.
Longbottom believes the provenance trend will intensify as retailers come under more pressure to reduce their food miles and consumers start to demand more local and seasonal goods. 'The retailers will all be working out how to combine local sourcing with the kind of efficiencies and economies of scale they currently enjoy from global sourcing,' he says, suggesting that locally sourced produce may even become an own-range category.
In the toiletries market, Johnson & Johnson's 20% value rise comes thanks to its hybrid tanning moisturiser, Holiday Skin, which took the market by storm on launch in 2005 and spawned a new sector that tapped into consumer awareness of the dangers of sunbathing. The company continued to innovate in the face of a spate of launches of rival products by adding facial and night-time variants.
Johnson & Johnson also exemplifies another pronounced development this year - the need for strong, almost continuous innovation to counter the risk of commoditisation and downward price pressure from retailers. Ariel, Carling and Pampers, which all suffered double-digit sales declines, fell prey to this pincer movement, which allowed more innovative rival brands, as well as own-label competitors, to steal a march.
Carling relied heavily on price promotions at the expense of innovation and brand-building during the year - a recurring theme in several categories and a tactic highlighted as dangerous by Procter & Gamble vice-president and UK & Ireland managing director Gianni Ciserani in May.
The beer and wine markets have been particularly susceptible to this trend, where value is being eroded by price wars that may benefit individual brands but do little for the category. Blossom Hill's storming performance - it grew sales by 37% and leapt 25 places up the table - has more to do with securing the right promotions in the right stores at the right time than with any particular brand strategy.
'You need to play both the advertising and promotion end to be successful,' says Longbottom, arguing that once a brand gets stuck in a cycle of promotion it becomes difficult to break. 'Innovation, brand-building and creating an emotional "catch" is the way to secure consumer preference over the heads of the retailers, in turn raising negotiating power to counter the downward pressure on prices,' he says. 'It's a constant balancing act.'
Source: TNS Worldpanel The 2005 figures differ from those published last year due to a change in TNS' methodology. All the figures above are compiled using the same methodology
Biggest brands data source and methodolgy
All data used to compile the Biggest Brands list has been provided by TNS Worldpanel, which monitors the grocery retailer take-home purchasing habits of 20,000 demographically representative British households. Using an in-home scanning device, panellists scan their entire take-home purchasing. As the sample is representative of Great Britain, these purchase records can be grossed up to represent purchasing behaviour of every British home.
In compiling the list, TNS Worldpanel has defined a brand as it would be seen in the eyes of the consumer. Products that have clearly defined branding on the packaging have been counted to make up the total brand value. For the purpose of this exercise all own-label brands have been separated into the Top 10 Own-Label section and are not included in the 50 Biggest Brands list.
The list has been compiled from the Worldpanel Retailer Share Track database, which covers 247 of the biggest markets within five categories - fresh foods, packaged grocery, alcohol, toiletries and healthcare. Worldpanel covers take-home purchasing only.
All the data provided is for the 52 weeks ending 23 April 2006.