Sector Insight: Ambient desserts - Convenience necessitates change
Consumers are turning from canned and packet desserts to a plethora of ready-to-eat options.
British consumers' idea of an indulgent dessert has changed; while a bowl of Angel Delight or Ambrosia Creamed Rice was once considered a treat, the rise of chilled desserts has forced manufacturers to innovate the contents, packaging and branding of their offerings in order to remain relevant. They have tapped into the trend for healthy eating and convenience, as well as the children's lunch box market to boost sales, but even this might not be enough, as a 5% value slump is predicted over the next five years.
Ambient desserts - those that can be stored at room temperature - remain popular among consumers fancying a spot of indulgence at mealtimes.
The sector includes canned milk-based desserts, such as rice puddings; packet desserts, including jellies and other sachet mixes; and ready-to-eat (RTE) and pot desserts, such as trifles and puddings - most often sponge puddings in tins or microwavable containers.
Ambient desserts are estimated to be worth £176m this year. While the sector's value has remained static over the past five years, according to Mintel, its composition has shifted dramatically, with canned and packet desserts declining as RTE desserts have seen their popularity rise.
Canned milk-based desserts, such as rice pudding and custard, have seen value and volumes drop by up to 30% in the past four years, while sales of packet desserts have declined by 17% to a value of £40m.
RTE products now account for 40% of the value of the market, as their sales increased by 40% since 2001 to £70m in 2005. Sponge puddings have also enjoyed a revival - boosted by innovations in packaging - and now account for 12% of the market.
Consumers cite their reasons for buying ambient desserts as convenience, value for money and because their children enjoy them, according to TGI.
Convenience is the most important aspect for young consumers with no family, while C2Ds and families opt for them because they offer value for money, and ABC1 families are most likely to purchase the products because their children like them.
Across these demographic groups, however, there is a more general desire for greater choice of healthier ambient desserts, and puddings that contain natural ingredients and taste more home-made.
Brands in this sector tread a fine line between capitalising on the nostalgia of childhood favourites and being perceived as outdated and unhealthy - syrup steamed puds and treacle-laden desserts have long been favourites, but their sugar content would make many health-conscious consumer blanch.
Indeed, the sector faces a strong, growing challenge from chilled desserts, which have been boosted by this trend toward healthier eating, and especially parents' desire to provide fresh food for their children.
Another obstacle for the sector is its positioning within stores. The desserts' location on shelves, rather than in dedicated chiller cabinets, means they are often less visible and displayed alongside unrelated products according to the stores' wont, making them difficult to find. There is also lower footfall on the aisles in which they are located and limited signage.
Ambient dessert brands have started to address this issue by developing innovative packaging and alternative formats. Plastic microwavable pots have proved popular, as have individual portions of products, such as jelly, offered in clear plastic pots.
Premier Foods is the leading player in the sector and its acquisition of several brands in recent years has helped it establish a strong position within the market.
In 2003, it bought Ambrosia from Unilever, giving it a dominant position in the canned rice and custard market, with a 70% share. It has subsequently boosted the brand by creating single-serve pots that tapped into both the convenience and children's lunch box market.
More recently, its acquisition of Bird's from Kraft in February 2005 secured it the market-leading custard brand as well as the top slot in the packet desserts category, with Angel Delight and Bird's Dream Topping.
It also rebranded the Rowntree's jelly brand it bought from Nestle in 2002 to Hartley's, in line with the jam brand already in its stable, and it has evolved this market with products such as sugar-free jelly pots.
Del Monte's fruit offering includes Fruit Express, which consists of pots of fruit pieces in juice. The brand positions itself as healthy and convenient, focusing on its natural ingredients and its no-added sugar attribute. In 2004, the company added Fruitini Squeezie - a crushed-fruit product - to its portfolio.
Similarly, Dole has extended into the sector with its Fruit in Juice and Fruit in Jelly pots and last year it added the '5-a-day' logo to some of its fruit products, to promote its healthy credentials. This year, it launched Fruit Parfait, a fruit and creme layer dessert, available in three flavours: Pineapple and Coconut, Peaches and Vanilla and Apples and Caramel. Other brands in this sector include soya-based firm Alpro and Heinz.
Unlike most other food sectors, there has been very little expansion into the premium sector or organic products here; instead, innovation has focused firmly on health and convenience.
Ambient desserts will need to continue to work hard to compete with the chilled sector, and Mintel predicts that the sector will suffer a 5% decline on 2006's value in real terms, to be worth £183m in 2011.
AMBIENT DESSERT TYPES BY SALES VALUE (pounds m)
2005 2003 2001 01-05
1 RTE desserts 70 59 50 40.0
2 Canned milk-based desserts 44 53 63 -30.2
3 Packet desserts 40 44 48 -16.7
4 Sponge puddings 21* 19 16 31.3
Total 175 174 177 1.1
*Includes both canned and ambient puddings in 2005
CANNED MILK-BASED DESSERT MANUFACTURERS BY SALES VALUE (pounds m)
2005 2003 2001 01-05
1 Premier Foods (Ambrosia) 32 37 46 -30.4
2 Own-label 11 13 15 -26.7
Others 1 2 2 -50.0
Total 44 53 63 -30.2
PACKET DESSERT MANUFACTURERS BY SALES VALUE (pounds m)
2005 2003 2001 01-05
1 Premier Foods* 25 11 12 108.3
2 Kraft Foods n/a 15 16 n/a
Others 3 3 2 50.0
Own-label 12 15 18 -33.3
Total 40 44 48 -16.7
*includes Kraft Bird's and Angel Delight brands acquired in 2005
RTE POT AND CARTON DESSERT MANUFACTURERS BY SALES VALUE (pounds m)
2005 2003 2001 01-05
1 Premier Foods* 34 26 22 54.5
2 Alpro 13 11 7 85.7
3 Kraft Foods n/a 2 2 n/a
4 Campina International 1 2 2 -50.0
Others 12 7 6 100.0
Own-label 10 11 11 -9.1
Total 70 59 50 40.0
*Includes Kraft Bird's brand acquired in 2005
ANALYST COMMENT - IAN BELL, SENIOR UK AND IRELAND RESEARCH ANALYST, EUROMONITOR INTERNATIONAL
Ambient desserts may not be the most glamorous of sectors, especially when compared with the likes of Gu and a bevy of other high-end offerings now available in the chiller cabinet.
However, at a time when chilled products are leading consumer trends for freshness and health, ambient desserts, unlike sales of dried and frozen food, have stood up surprisingly well. Del Monte, in particular, has revitalised its Fruitini brand into a lunch box must-have for parents who can't trust their kids to tackle a piece of fruit at school.
The health focus for ambient desserts has not, however, been the preserve of kids alone. Provamel, for example, now enjoys huge success with its soya-based desserts, which in just a few years have won over older consumers.
Adults are almost as fickle as their offspring when it comes to trying new things, but one thing both age groups agree on is just how good Ambrosia custard is, as this family favourite goes from strength to strength in its potted format.
Ambrosia has benefited from embracing the health trend, with low-fat alternatives available alongside its classic green-label original, while a fruited microwavable line, due to hit the shelves shortly, should ensure consumer interest is maintained.
Ambient desserts have managed to maintain their performance by preserving their strength as a convenient and portable snack.
While addressing the underlying trend toward healthier options, manufacturers continue to rely on household favourite brand names and have not tried to confuse their existing offer. Keeping it honest appears to be paying dividends.
This article was first published on marketingmagazine.co.uk
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