As with most food sectors, the bottled-sauces market has been the subject of healthy-eating concerns. In September, Calderdale Council in Halifax banned ketchup from the canteens of primary schools in its area, in response to government guidelines relating to products with a high salt content. Manufacturers are reacting by launching lower-sugar and salt options. They are also trying to spark growth by innovating with items related to a wider range of cuisines, such as Asian food, and cooking methods, such as barbecuing.
For many British households, the main meal of the day would not be complete without a dash of Heinz Tomato Ketchup or HP Sauce, propelling the products to near-iconic status.
The resultant high penetration in the bottled-sauces sector, of more than 90%, means it is a mature market dominated by brands that command high consumer loyalty.
As such, it is also very stable, with minimal movement among the leading brands and limited growth. This year, the market is expected to have grown 4.6% to a value of £362m, according to Mintel, having achieved 16% growth between 2001 and 2004.
The sector covers a broad range of products including ketchup, soy, barbecue and chilli sauces, vinegars, mustards, and dish-specific products such as mint, horseradish, tartar and apple sauces. Its biggest category is table sauces, which accounts for more than 50% of sales and has recorded the most marked growth.
Because of the sector's diverse nature, the rise in consumption of meals on the go has had a positive impact on some areas, such as table sauces, but a detrimental one on others, namely the dish-specific segment.
Similarly, the rising popularity of barbecues among the UK population has created opportunities to launch sauces specifically created to accompany food cooked in this way. A third of the UK population now owns a barbecue, and the number is set to continue to grow, with sales fuelled by the unusually hot summer weather this year.
Most consumers in the bottled-sauces sector tend to be brand loyal, with 59% sticking to the same brand or brands. Younger consumers are the most likely to try new options, with Mintel suggesting that different formats and pack sizes could be developed to encourage trial, while products could be aimed at restaurants and bars to get them into the public consciousness.
As international cuisines take a stronger hold in the UK, so they have opened up additional opportunities in this sector. The popularity of Asian and Chinese food, for example, has resulted in consumers buying products such as soy and dipping sauces to replicate restaurant dishes at home.
The dish-specific and vinegar categories have posted the greatest shift upmarket. The mustard category, which is relatively static, has also seen consumers trading up to more premium brands, suggesting there is room for this kind of development in other areas. Some evidence of this was provided when Branston launched a tomato ketchup in 2006 with the claim that it contained 20% more tomatoes than the Heinz equivalent. This was followed by the market entry of Wilkin & Sons, which raised the stakes by claiming that its product, which carried a higher price tag, contained 30% more tomatoes.
Despite the maturity of the sector, there has been innovation, especially prevalent in the launch of own-label premium ranges and organic products.
In addition, the sector has come under the watchful eye of the Food Standards Agency, which has tried to encourage sauce manufacturers to cut the salt content in their products. Many have reacted by launching lower-sugar or lower-salt variants.
Elsewhere, innovation has centred on packaging, first through squeezable bottles and latterly with top-down versions.
Heinz is the market leader in the bottled-sauces category; its Tomato Ketchup accounts for about 70% of sales in the market. The company further tightened its hold when it bought HP last year, giving it control of the HP, Lea & Perrins, Amoy and Daddies brands.
This year the company boosted its adspend, running TV campaigns as it sought to keep the competition at bay.
Heinz has not been immune to health lobbying and announced that it is to introduce reduced-salt and lower-sugar versions of its ketchup in January 2007. These will be aimed at families with children and at older consumers.
Premier Foods, meanwhile, has been busy extending its Branston brand into additional markets. This year it launched its own tomato and brown sauce brands to challenge Heinz' dominance.
To encourage purchase, the company rolled out in-store activity using the line 'Get saucy with Branston'. The aim is to reach sales of £15m in the first two years, taking a 20% share of the brown sauce market and a 10% share of the tomato sauce market. Premier also owns the Sarson's and Dufrais vinegar brands.
Other companies and brands in the sector include Blue Dragon, Kikkoman, which produces soy and teriyaki sauces, and Unilever's Colman's mustard.
Mintel forecasts that by 2011 the bottled-sauces sector will be worth £414m, an increase of 14% compared with 2006. However, in real terms this represents a growth rate of 5%. The market will slow, and all categories, with the exception of table sauces, are predicted to experience decline.
MEAL AND SNACK ACCOMPANIMENT SALES BY CATEGORY (pounds m)
2005 2003 2001
1 Bottled sauces 351 333 298
2 Dressed salads 292 280 255
3 Salad accompaniments 191 179 163
4 Dips 172 147 120
BOTTLED-SAUCES, MUSTARDS AND VINEGAR SALES (pounds m)
2006* 2005 2003 03-06
1 Tabled bottled sauces 236 228 213 10.8
2 Dish-specific 60 59 57 5.3
3 Vinegar 39 38 37 5.4
4 Mustard 27 26 26 3.8
Total 362 351 333 8.7
BOTTLED TABLE-SAUCE MANUFACTURERS BY BRAND ADSPEND (pounds)
NOV 05-NOV 06
1 HP Foods (Brown/Original bottled sauces) 1,957,571
2 Heinz (ketchup) 1,932,721
3 Lea & Perrins (Worcestershire Sauce) 1,791,177
4 Lea & Perrins (Tomato & Worcester Sauce) 1,037,526
5 Kikkoman (soy sauce) 390,391
6 Heinz (Heinz 57 bottled table sauces) 235,792
7 Colman's (bottled table sauces) 164,538
8 HP Foods (BBQ Sauce) 93,850
9 Kikkoman (teriyaki sauce) 11,000
10 Crosse & Blackwell (bottled condiment sauces) 6419
Source: Xtreme Information
TABLE-SAUCE SALES BY TYPE (pounds m)
2006* 2004 2002
1 Ketchup 137.4 120.3 105.6
2 Mayonnaise 108.2 100.1 91.5
3 Brown sauce 54.2 49.2 48.5
Source: Euromonitor International
UK RETAIL SALES OF BOTTLED SAUCES BY OUTLET TYPE
Outlet 2006(est) 2005 2003 2001 01-06
pounds m pounds m % pounds m % pounds m % % chng
1 Grocery 301 295 84 280 84 247 83 21.9
2 Co-ops 20 18 5 17 5 18 6 11.1
3 Independents 19 18 5 17 5 18 6 5.6
Others** 22 21 6 19 6 15 5 46.7
Total 362 351 100 333 100 298 100 21.5
* Including discounters
**Including convenience stores, garage forecourts, delicatessens and
ANALYST COMMENT - TOBY MAGILL CLIENT EXECUTIVE, TNS WORLDPANEL
Bottled sauces have an almost universal appeal, being purchased by 98% of all UK households. With little room to expand through targeting non-buyers, growth needs to be generated from increasing frequency of purchase or spend.
The most significant recent development within the thick and thin table-sauce category has been the launch of the top-down bottle format. It has had an impact on the entire sector, as the category is the biggest in the bottled-sauces market, accounting for 35% of its value with sales of £214m.
The top-down format was introduced by Heinz in 2003 with the launch of a 570g Tomato Ketchup bottle. The pack was subsequently redesigned to bring it more in line with the traditional Heinz bottle shape. The format now accounts for 78% of Heinz Tomato Ketchup's value and volume and has superseded both its plastic and iconic glass bottles.
The top-down variant attracts young, affluent shoppers, who are willing to pay for convenience. The innovative bottle shape has also driven an increase in average annual spend per buyer because the price paid per pack is higher than for plastic or glass bottles.
The growth of top-down bottles has been fuelled by the fact that the pack type tends to be bought in larger volumes and more frequently than traditional formats.
The clearest indicator of the format's success has been the speed at which it has been replicated by Heinz's rivals both within and outside the sector. Branston, Hellmann's and even Marmite, not to mention own-label brands, have all launched their own top-down packs, suggesting the format will be in our cupboards for years to come.