Sector Insight: Bottled sauces

More than 200 complaints to the Advertising Standards Authority prompted Heinz to pull the ad and apologise for offending viewers, but this merely added to the controversy, with gay-rights campaigners calling for a boycott of Heinz products.

The publicity kept the brand in the news at a time when Heinz is trying to take on Hellmann's and build as strong a presence in the mayonnaise segment as it already enjoys in
table sauces. Heinz is in an enviable position in the bottled sauces category with its popular Tomato Ketchup, and has been busy promoting brands old and new.

The market is estimated to have been worth £474m in 2008, with table sauces and mayonnaise accounting for three-quarters of the value, according to Mintel. The category also includes dish-specific sauces such as mint, horseradish, vinegar and mustard. It does not include salad dressings, cooking sauces and edible oils.

The market is essentially stagnant - it increased by only 2.4% in value between 2006 and 2007. When inflation is taken into account, this actually represents a slight reduction.

Premium brands are finding it easier to hold market position than mid-market products. Premium variants promote themselves on their taste, flavour and natural ingredients. As well as competition between manufacturers, grocery multiples are increasing their presence with own-label offerings, which accounted for more than half of all product launches in the past year.

The market has benefited from the rise in people cooking from scratch, as bottled sauces are often used as ingredients in home-cooked dishes. Thanks to people being more adventurous in the kitchen, ethnic sauces have also been boosted.

Many of the products in this sector may find it difficult to make claims about their health benefits because they are high in fat, salt and/or sugar, but most are artificial additive-free. Manufacturers have also responded to changes in consumer habits by introducing lower-fat options.
The biggest growth has been in tomato-based and barbecue sauces, the latter doing particularly well considering the poor summers the UK has experienced in recent years. Branston, owned by Premier Foods, and Wilkin and Sons' Tiptree have tried to challenge Heinz's dominant position here, the latter going for the premium end of the market. Heinz responded this year through the With A Twist Of range, which includes chilli and garlic variants, as well as a reduced-sugar and salt option.

Heinz also owns HP, which is the leading brown sauce brand, as well as its nearest rival, Daddies. Growth in this category has also stalled, although HP added a Steak Sauce variant to its range this year.

Innovation has been critical in bottled sauces, and Heinz has succeeded in bringing new customers to an already mature market. For example, lower-fat options have generated an increase in household penetration for mayonnaise.

While more women than men consume mayonnaise, ketchup appeals to a broad range of consumers regardless of wealth, age and gender - although older consumers tend to be lighter users of the condiment.

A third of consumers keep eight or more different sauces in their cupboards, according to BMRB. The leading producers invest heavily in promoting their brands, which benefits the whole category.

The market is expected to be worth £533m by 2013, a 13% increase on 2008, according to Mintel. Within this, the table sauces sector will be worth £277m. However, the high inflation affecting food prices means that this equates to a 2% decline in value in real terms.