Health and indulgence have been two of the most important trends in the grocery market since the turn of the millennium. But over the past 12 months, they have made a bigger impact than ever before. With brands such as Walkers and Coca-Cola - both demonised by the health lobby - climbing onto the health bandwagon, the value of the top 50 brands rose by 4% to more than £77bn last year. 'The rate at which people are trading up to something a bit nicer, different or healthier has accelerated,' says Chris Longbottom, a director of TNS Worldpanel.
The 2007 Biggest Brands table, compiled exclusively for Marketing by TNS Worldpanel, shows that 36 of the top 50 grew in value last year, with star performers including Tropicana (up 35%), Foster's (up 34%), and Weetabix and Gallo (both up 33%). While 11 brands did suffer a drop in sales, this is two fewer than last year; the worst-hit, not surprisingly, was flu victim Bernard Matthews (down 17%).
Providing the most comprehensive overview of grocery sales over a 12-month period, the TNS Worldpanel data allows marketers to track which brands are outperforming or underperforming their rivals and spot tappable category trends - although, as Longbottom says, it would be hard to miss the obvious one. 'Healthy eating is the dominant trend,' he says. 'Awareness activity in schools, government campaigns and food labelling has helped consumers make more conscious choices. Even pester power seems to be on the wane, as parents take control of their children's diets. We have also seen more innovation this year as brands launch healthier variants.'
Jonathan Hall, global client managing director of Added Value, says that the brands that have benefited most from this trend fall into two categories: those such as Tropicana, Danone and Kellogg, which have intrinsic health benefits; and those that have adapted their offerings to make them less unhealthy, such as Coca-Cola and Walkers.
Walkers became the third-biggest supermarket brand this year, growing its sales 5% by emphasising the reduced levels of fat and salt in its crisps. It has also enjoyed great success with its Potato Heads brand for children, which has 33% less fat than ordinary Walkers crisps, and the launch of its Lights (less than 115 calories in a bag) and Baked (70% less fat than the standard product) lines. Its new Sensations Corn Chips, which are billed as 'light and crispy', exemplify the blurring of the health and premium trends.
Coca-Cola's launch of sugar-free variant Coke Zero, aimed at men, has similarly boosted its sales. 'Coca-Cola knows it will lose consumers unless it provides healthier alternatives that are also aimed at people who wouldn't traditionally have considered Coke,' says Longbottom. 'Coca-Cola and Walkers are great examples of brands making "debatable" products more permissible, without ditching the core brand values.'
While both these brands have backed their transformations with heavy adspend, the divergent fortunes of yoghurt brands Muller and Danone, both of which have strong health propositions, demonstrate that getting the message across relies on more than just a strong ad campaign. 'Growing competition in every category means you need to give people a reason to believe in your product,' says Alicia O'Donoghue, manager in the consulting division at business advisory firm Deloitte. 'Muller has invested heavily in its ad campaign for Vitality, which contains omega-3, but its sales have remained static. Danone, whose activity focuses much more on the functional health benefits of its Activia yoghurts, featuring real people talking about how much less bloated they feel, saw an 11% uplift.'
Tropicana can attribute its 35% growth largely to its pure premium positioning, but its 'Straight from the fruit' strapline also taps into another growing health-related consumer trend - the desire for natural authenticity. This trend has also helped to drive Warburtons' 17% sales rise, an impressive feat for a staple. The brand is gradually extending its distribution throughout the UK, while continuing to exploit its strong family heritage through humorous ads and product launches such as Healthy Inside Oats and Healthy Harvest.
The sense of reassurance that 'traditional' brands such as Warburtons and Hovis provide also helps to explain the success of Kellogg and Heinz, respectively the number one and two brands again this year. Neither is noted particularly for its innovation or health positioning, but their values have boosted their appeal. 'They represent the sense of security and trust people had as a child; brands that can sustain that emotional connection have a huge advantage,' says O'Donoghue.
The success of brands such as McVitie's, Robinsons and, of those just outside the top 50, PG Tips and Mr Kipling, also provide evidence of a desire for nostalgia, as, to an extent, do brands with contrived heritage such as Cathedral City and Aunt Bessie's.
Cadbury, meanwhile, seems to be doing its best to squander its place in consumers' hearts. Its bungled handling of two contamination scares and product recalls last year have eroded trust. While it has got off lightly with a 1% sales dip, this year will be critical. 'Cadbury has built up a huge amount of goodwill, but sales will continue to decline unless it gives consumers a reason to buy it again,' says Hall.
Consumers were far less forgiving of Bernard Matthews, whose sales slumped 17% after an outbreak of avian flu at one of its farms. The brand has overhauled its range and launched a £7m press and radio campaign, tying up with the Spider-Man film, to rebuild consumer confidence, but even before the flu outbreak, sales had declined by 4% in the year to April 2006, suggesting it will need to do a lot more to return to growth. Longbottom believes the company has also missed a trick by failing to use the crisis as an opportunity to remind people of the inherent healthiness of its lean turkey products.
Nowhere is the penalty for lack of sustained innovation more evident than at Johnson & Johnson. The brand tumbled from 33 to 44 in the top-50 table with a 15% sales decline after failing to add to its pioneering tanning moisturiser Holiday Skin, which helped it to 20% growth in the previous 12 months. The market is now awash with rival products. 'Innovation on its own is not enough, because it is easy to copy,' says O'Donoghue.
The strong value rises of brands such as Cravendale and Quaker in the 'Ones to watch' table of the fastest-growing brands below the top 50 are explained by their strong health benefits, while Dove and Olay owe their success to their unpretentious appeal to 'real women'. Meanwhile, the solid performance of the beer brands is closely linked to last year's hot summer, combined with the World Cup.
One trend that is not evident in this year's table is the much-foretold shift toward ethical shopping. Marks & Spencer recently announced that all its coffee is to become Fairtrade and all Sainsbury's bananas are now Fairtrade, but while the Co-Op has probably the biggest range of ethical products of any supermarket, it is one of only two brands in the own-label list to lose value sales this year.
Though the value of Tesco's Organic range has climbed 29% to about £195m, Longbottom asserts that organic still represents only a small proportion of sales. 'Ethical shopping remains at the margins, and retailers must balance growth trends with the need for critical mass,' he says.
The fact that Nestle, the brand the ethical lobby loves to hate, saw its sales hold up well over the year adds fuel to the argument that ethical shopping remains a niche segment.
'I am surprised that the figures don't show more evidence of ethical shopping,' admits Hall. 'It is generally difficult to see whether company's CSR efforts have had any effect on consumer behaviour at all.'
|Top 10 Brands to Watch 2007|
|Rank||Brand||Sales (£000)||% change|
Note: Ones to watch are the fasting-growing brands between 51 and 100
Biggest brands data source and methodolgy
All data used to compile the Biggest Brands list has been provided by TNS Worldpanel. TNS Worldpanel monitors the grocery retailer take-home purchasing habits of 25,000 demographically representative British households. Using an in-home device, panellists scan their entire take-home purchasing. As the sample is representative of Great Britain, these purchase records can be extrapolated to represent the purchasing behaviour of every home in Great Britain. 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. No licensed brand products have been included. For the purpose of this exercise all own-labels have been separated into the top 10 own-label section and are not included in the 50 biggest brands list. For this research project, Worldpanel has covered 'take-home' purchasing only; all bathroom toiletries brand values excluded cosmetic and fragrance ranges. All data provided is for the 52-week period to 22 April 2007.