Budget food and drink product launches now outstrip premium
The study by Mintel found that new product launches in the economy range accounted for 9% of total UK new food and drink launches in 2012, compared to 7% of launches featuring premium claims. This compares to 2008, when premium made up 9% of total food and drink launches versus 2% of economy.
Mintel said the surge made the UK the leading country in terms of economy food and drink new product launches globally, as these accounted for 21% of global food and drink economy introductions in 2012.
This meant that the UK even exceeded the US, which accounted for 20% of global economy launches in 2012. Looking at other markets worldwide, Japan ranked third with a 15% share of global economy new product development activity, followed by France, Australia, Spain and Italy (4% respectively).
David Jago, director of innovation and insight at Mintel, said: “The UK economy has struggled to see market recovery and consumer disposable income has remained under pressure. This has given buoyancy to the trend for food and drink brands and grocers to push their value credentials to the foreground. Investment in new product development across economy lines has reflected this, increasing steadily since 2010, outstripping the number of new product launches featuring premium claims.”
Mintel found that many retailers had recently improved the quality of the packaging for budget ranges as they recognised that this had previously been a barrier to purchase for middle class consumers.
Benjamin Punchard, Mintel’s senior global packaging analyst said: “Alongside clear economy statements on packs, which can be off putting for some, brands have recognised that packaging can give an economical edge through offering a reassurance of value. This might be packaging that protects the product better so that the consumer can rest assured that they will be able to use the product before it goes off. Similarly portioned or dosing packs tell the consumer that they will definitely get the stated portions out of a pack – both a value proposition and a helpful measure for those on a budget needing to know exactly how far a product will stretch.”
In a separate study, Mintel found that bargain hunting has become ingrained amongst the UK’s savvy shoppers, with more than seven in ten (72%) consumers saying they liked the ‘thrill’ of getting a bargain. The figure peaked among women (77% female consumers vs 66% men) and it was also strong amongst the highest earners (75% of those earning £50,000 or over, vs 70% of those under £9,500 and 78% £9,500-15,499).
More than half (55%) of UK consumers said they only bought certain products or brands when on promotion while four in ten (39%) said that promotions allowed them to buy foods that they would not be able to afford otherwise.
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