Sector Insight: Canned meals and meats

Despite the universal appeal of baked beans, manufacturers have not stood still when it comes to NPD. They have been working to adapt their ingredients to withstand the scrutiny of healthy-eating champions by reducing salt, fat and sugar content. This has become even more vital since the introduction of on-pack GDAs and traffic light food-labelling systems.

The canned meals and meats sector encompasses tinned beans, pasta and meat products such as meatballs, curries, stews and cold meats. It does not include soups, fish or canned vegetables and fruit. Innovation in canned meats has been limited as these products are losing favour to competitor products, although they remain a mainstay of the diet of many students looking for fast, cheap sustenance.

Tinned mince was recently championed in an unlikely corner when Delia Smith sang its praises in her How to Cheat at Cooking book. However, the book, and some other ingredients it featured, were widely derided by other high-profile cooks and chefs.

Overall growth in the sector has been steady over the past few years; between 2003 and 2007 the market rose by 10%, to reach a value of £671m, according to Mintel. Volume growth in the same period was 7%.

Canned beans has posted the biggest growth (up by more than 11% between 2005 and 2007) and account for the biggest section of the market, with a 44% value share. The category is dominated by two brands, Heinz and Branston, both of which have invested heavily in NPD and advertising.

Heinz is the biggest player in both the beans and pasta categories, and includes the Weight Watchers and HP brands. Its key innovation in the category has been the introduction of microwaveable snack pots introduced in 2007 and sold in 4x200g packs. It has also reformulated and repackaged its lower salt and sugar Baked Beanz, promoting the absence of artificial sweeteners.

In October 2007, Heinz added a Hidden Veg Beanz variant , before extending the Hidden Veg brand into its Spaghetti Hoops and Bolognese lines. Aimed at mothers looking to increase children's vegetable intake, vegetables are pureed and mixed with the tomato sauce.

Premier Foods introduced its Branston canned-food brand in 2005, when the company lost the licence to the HP brand. It has brought some welcome competition, with significant promotional support, and gained a solid market share. Last year, Branston added Bloomin' Big Baked Beans to its range. Made from otebo beans, these are 50% bigger than the haricot variants used in standard baked beans. It also added Branstein Beans, containing Omega-3.

Baked beans have fared well in the shifting diet climate; as a low-GI rated food, they have proved convenient and guilt-free. Tinned pasta has become less popular by comparison, and now accounts for just 15% of sales in the category, with a value of £99m last year.

Canned meat and poultry accounts for 41% of total sales, with products such as chilli, curry, hot dogs and chopped ham and pork performing best. Princes is the dominant brand in both the heat-to-eat and cold meat sectors.

Following the expiry of its licence on the Campbell's brand, Premier Foods has also launched Fray Bentos meatballs.

The tinned meats market has had to adapt to changing tastes, and the lower-fat products now offered by many manufacturers include Hormel Foods' Spam Lite.

Canned beans, pasta and curry are most likely to be consumed by 15- to 24-year-olds, while canned meats find

favour among over-65s and C2DEs. Forecast growth in the number of 15- to 24-year-old consumers is therefore good news for this category.

However, there is stiff competition in convenience food. Chilled ready meals have recorded strong growth in recent years, as have wider, higher-quality deli meat ranges, although the longer shelf-life of canned alternatives has assured their position as store-cupboard staples.

Canned foods are generally viewed as healthy, with only 14% of consumers categorising them as not. There has been relatively little development of more premium lines in this sector, and this may be a potential growth area.

In the next five years, Mintel predicts real growth of 9% in the sector. By 2012, the market will be worth £792m, with growth in the baked beans category outpacing this at 17%, rising to a value of £376m.

Analyst comment

Thomas Berry, market analyst, TNS Worldpanel

The canned hot meals and meats market has grown 3.3% to a value of £159m this year, in contrast with the decline experienced from 2006 to 2007, according to TNS. This can be attributed to a poor summer last year, which drove up sales of seasonal canned goods such as pies and puddings.

Growth has been fuelled by increased prices, and a rise in the number of house-holds buying into the category - almost 60% bought a hot canned product last year.

The main consumers of hot canned products are six- to 16-year-olds, and men over the age of 35. The category's popularity is much weaker among women, who account for just 35% of consumption .

The main purchase motivator for hot canned products is convenience. This is reflected by low consumption at weekends, when many have more time to cook a fresh meal.

Less than 5% of consumption is driven by health reasons due to the products' high fat and salt content.

The market is skewed toward the less upmarket shopper, with more than 60% of spend coming from C2DEs, and shoppers based in the North. Consequently, hard discounters Aldi, Lidl and Netto heavily overtrade in canned products. Less predict-ably, Marks & Spencer also performs strongly in canned curries and chilli.

Fray Bentos dominates the category, accounting for a third of branded sales and a fifth of total sales. The rebranding of Campbell's meatballs as Fray Bentos has added more than £4m to its portfolio.

Fray Bentos' biggest-selling products are canned pies. Like sales in the category as a whole, the brand's 90% share of this market remains static, in a sector stagnated by lack of competition and NPD.