Canned Foods 2011

Market Report Plus 2011
18th Edition February 2011 Edited by Katie Hughes ISBN 978-1-84729-702-0
Canned Foods
Canned Foods
Foreword
In todays competitive business environment, knowledge and understanding of your marketplace is essential. With over 30 years experience producing highly respected off-the-shelf publications, Key Note has built a reputation as the number one source of UK market information. Below are just a few of the comments our business partners and clients have made on Key Notes range of reports. "The Chartered Institute of Marketing encourages the use of market research as an important part of a systematic approach to marketing. Key Note reports have been available in the Institutes Information and Library Service for many years and have helped our members to build knowledge and understanding of their marketplace and their customers." The Chartered Institute of Marketing "We have enjoyed a long-standing relationship with Key Note and have always received an excellent service. Key Note reports are well produced and are always in demand by users of the business library. "Having subscribed to Market Assessment reports for a number of years, we continue to be impressed by their quality and breadth of coverage." The British Library "Key Note reports cover a wide range of industries and markets they are detailed, well written and easily digestible, with a good use of tables. They allow deadlines to be met by providing a true overview of a particular market and its prospects." NatWest "Accurate and relevant market intelligence is the starting point for every campaign we undertake. We use Key Note because they have a report on just about every market sector you can think of, and the information is comprehensive, reliable and accurate." J Walter Thompson "Market Assessment reports provide an extremely comprehensive source of information for both account handling and new business research, with excellent, clear graphics." Saatchi & Saatchi Advertising
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Canned Foods
Contents
Contents
Executive Summary 1. Market Definition 1 2
REPORT COVERAGE....................................................................................................................2 MARKET SECTORS.......................................................................................................................2 MARKET TRENDS.........................................................................................................................3

The Recession..................................................................................................................................3 Environmental Concerns...............................................................................................................3 Convenience Foods........................................................................................................................4 Health Concerns.............................................................................................................................4
ECONOMIC TRENDS....................................................................................................................5
Population.......................................................................................................................................5 Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2005-2009...........5 Gross Domestic Product................................................................................................................6 Table 1.2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (m), 2005-2009..............................................................................................................................6 Inflation...........................................................................................................................................6 Table 1.3: UK Rate of Inflation (%), 2005-2009.......................................................................7 Unemployment...............................................................................................................................7 Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2005-2009.........7 Household Disposable Income....................................................................................................8 Table 1.5: UK Household Disposable Income Per Capita (), 2005-2009............................8
MARKET POSITION......................................................................................................................8
The UK..............................................................................................................................................8 Table 1.6: Total UK Household Expenditure on Food and Household Expenditure on Canned Foods (m at rsp and %), 2006-2010.....................................................................9 Overseas...........................................................................................................................................9
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2. Market Size
10
THE TOTAL MARKET................................................................................................................10

Table 2.1: The Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp and %), 2006-2010...................................................................................................10 Figure 2.1: The Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp and %), 2006-2010...................................................11
BY MARKET SECTOR.................................................................................................................12
Vegetables.....................................................................................................................................12 Table 2.2: The UK Canned Vegetables Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................12 Table 2.3: The UK Canned Vegetables Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010..................................................................................................13 Fish..................................................................................................................................................14 Table 2.4: The UK Canned Fish Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................14 Table 2.5: The UK Canned Fish Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010.............................................................15 Soup................................................................................................................................................15 Table 2.6: The UK Canned Soup Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................15 Table 2.7: The UK Canned Soup Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010.............................................................................................................16 Meat...............................................................................................................................................16 Table 2.8: The UK Canned Meat Sector by Value at Current Prices (m at rsp), 2006-2010......................................................................................................................................17 Table 2.9: The UK Canned Meat Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010.............................................................................................................18 Fruit.................................................................................................................................................19 Table 2.10: The UK Canned Fruit Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................19 Table 2.11: The UK Canned Fruit Sector by Type of Product by Value at Current Prices (rsp and %), 2010.........................................................................................................................20 Pasta...............................................................................................................................................20 Table 2.12: The UK Canned Pasta Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................21 Table 2.13: The UK Canned Pasta Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010.............................................................21 Desserts..........................................................................................................................................22 Table 2.14: The UK Canned Desserts Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................22 Table 2.15: The UK Canned Desserts Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010.............................................................23
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Contents
Cooking Sauces.............................................................................................................................23 Table 2.16: The UK Canned Cooking Sauces Sector by Value at Current Prices (m at rsp and %), 2006-2010....................................................................24 Table 2.17: The UK Canned Cooking Sauces Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010..............................................................................25
OVERSEAS TRADE......................................................................................................................25
General Overview........................................................................................................................25
3. Industry Background
26
RECENT HISTORY.......................................................................................................................26 NUMBER OF COMPANIES.......................................................................................................26 REGIONAL VARIATIONS IN THE MARKETPLACE.............................................................26 DISTRIBUTION.............................................................................................................................27

Table 3.3: The UK Market for Canned Foods by Retailer Share by Value (%), 2010.......................................................................................27
HOW ROBUST IS THE MARKET?...........................................................................................28 LEGISLATION...............................................................................................................................28

Food Safety Act 1990..................................................................................................................28 Food Labelling Regulations 1996..............................................................................................29 Food Standards Act 1999............................................................................................................29 Other Food Legislation...............................................................................................................30
KEY TRADE ASSOCIATIONS....................................................................................................30

Canned Food UK..........................................................................................................................30 The Food Processors Association...............................................................................................30 Metal Packaging Manufacturers Association ........................................................................30
4. Competitor Analysis
31
THE MARKETPLACE..................................................................................................................31
Table 4.1: Selected Leading Manufacturers of UK Canned Food Products by Turnover and Pre-Tax Profit (000), Latest Financial Year End.....................................31
MARKET LEADERS.....................................................................................................................32
Baxters Food Group Ltd..............................................................................................................32 Del Monte (UK) Ltd......................................................................................................................32 Glenryck Foods Ltd......................................................................................................................33 Gondola Group Ltd......................................................................................................................34 HJ Heinz Company Ltd................................................................................................................34 John West Foods Ltd...................................................................................................................36 Petty, Wood & Co Ltd..................................................................................................................36 Premier Foods PLC........................................................................................................................37 Princes Ltd.....................................................................................................................................38
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Contents
Tulip Ltd.........................................................................................................................................38 Other Companies.........................................................................................................................39
OUTSIDE SUPPLIERS..................................................................................................................39 MARKETING ACTIVITY.............................................................................................................40

Main Media Advertising.............................................................................................................40 Table 4.2: Main Media Advertising Expenditure on Leading Canned Food Brands by Sector (000), Years Ending September 2009 and 2010.................................................41 Exhibitions and Trade Shows.....................................................................................................43
5. Brand Strategy
44
INTRODUCTION..........................................................................................................................44 RESEARCH FINDINGS................................................................................................................44

Convenience..................................................................................................................................44 Table 5.1: Purchasing of Canned Foods in the Past 12 Months Owing to Convenience by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011.....................................................45 Value...............................................................................................................................................47 Table 5.2: Purchasing of Canned Foods in the Past 12 Months Owing to Value by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011.....................................................48 Flavour............................................................................................................................................49 Table 5.3: Purchasing of Canned Foods in the Past 12 Months Owing to Flavour by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011.....................................................50 Health.............................................................................................................................................52 Table 5.4: Purchasing of Canned Foods in the Past 12 Months Owing to Health Properties by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011............................53 Shelf Life........................................................................................................................................54 Table 5.5: Purchasing of Canned Foods in the Past 12 Months Owing to Shelf Life by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011.....................................................55
COMPANIES BRANDS..............................................................................................................57
Vegetables.....................................................................................................................................57 Fish..................................................................................................................................................57 Soup................................................................................................................................................58 Meat...............................................................................................................................................58 Fruit.................................................................................................................................................58 Pasta...............................................................................................................................................58 Desserts..........................................................................................................................................58 Cooking Sauces.............................................................................................................................58
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Contents
6. Strengths, Weaknesses, Opportunities and Threats
59
STRENGTHS..................................................................................................................................59 WEAKNESSES..............................................................................................................................59 OPPORTUNITIES.........................................................................................................................60 THREATS.......................................................................................................................................60
7. Buying Behaviour
62
CONSUMER PENETRATION.....................................................................................................62
Baked Beans..................................................................................................................................62 Table 7.1: Penetration of Baked Beans in the Last 12 Months by Sex and Age (% of adults), 2010.........................................................................................62 Soup................................................................................................................................................63 Table 7.2: Penetration of Soup in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010...............................................................63 Cooking Sauces.............................................................................................................................64 Table 7.3: Penetration of Canned Cooking Sauces in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010.........................................................................65 Baby Foods....................................................................................................................................66 Table 7.4: Penetration of Canned Baby Food in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010.........................................................................66
8. Current Issues
68
THE GLOBAL ECONOMY.........................................................................................................68 ENVIRONMENTAL ISSUES.......................................................................................................68 CARTONS VERSUS CANS..........................................................................................................69 HEALTH ISSUES...........................................................................................................................71
Bisphenol A (BPA)........................................................................................................................71 Sugar, Salt and Additives............................................................................................................72 Pregnant Women and Mercury.................................................................................................72
CONSUMER DEMAND..............................................................................................................73
Canned Mackerel.........................................................................................................................73
9. The Global Market
74
TOTAL MARKET SIZE................................................................................................................74 EUROPE.........................................................................................................................................74 THE US...........................................................................................................................................74 PEOPLES REPUBLIC OF CHINA..............................................................................................75
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Contents
10. Forecasts
76
INTRODUCTION..........................................................................................................................76 THE ECONOMY...........................................................................................................................76

Table 10.1: Forecasts for the UK Economy (000, % and million), 2010-2014...................77 Demographics...............................................................................................................................77 Table 10.2: Projected UK Population by Age (million), 2008, 2013, 2018, 2023, 2028 and 2033...................................................................................78
FORECASTS 2011 TO 2015......................................................................................................78

Table 10.3: The Forecast Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp), 2011-2015.................................................................................79 Figure 9.1: The Forecast Total UK Canned Foods Market by Value at Current Prices (m at rsp), 2011-2015.................................................................................80
MARKET GROWTH....................................................................................................................80
Figure 9.2: Growth in the UK Canned Foods Market by Value at Current Prices (m at rsp), 2006-2015.................................................................................81
FUTURE TRENDS.........................................................................................................................81
New Product Development........................................................................................................81
11. Company Profiles
83
BAXTERS FOOD GROUP LTD..................................................................................................84 DEL MONTE (UK) LTD...............................................................................................................86 GLENRYCK FOODS LTD............................................................................................................88 GONDOLA GROUP LTD............................................................................................................90 HJ HEINZ COMPANY LTD........................................................................................................92 JOHN WEST FOODS LTD..........................................................................................................94 PETTY, WOOD & CO LTD........................................................................................................96 PREMIER FOODS PLC................................................................................................................98 PRINCES LTD..............................................................................................................................100 SIMPSON READY FOODS LTD..............................................................................................102 TULIP LTD...................................................................................................................................104
12. Company Financials 13. Further Sources
106 108
Associations...............................................................................................................................108 Publications...............................................................................................................................108 General Sources.......................................................................................................................109
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Government Publications ....................................................................................................109 Other Sources...........................................................................................................................110 Key Note Sources ....................................................................................................................111
Understanding TGI Data
115
Number, Profile, Penetration..............................................................................................115 Social Grade...............................................................................................................................116 Standard Region......................................................................................................................116
Key Note Research The Key Note Range of Reports
117 118
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Canned Foods
"One of the biggest positives about the canned food category is that it is underpinned by strong consumer loyalty. Canned food is a store cupboard staple and, as such, strong merchandising and promotions can drive great sales spikes while major troughs are rare.
Ruth Simpson, Marketing Director of Princes Ltd (The Grocer, 29th October 2010)
With the recession biting, consumers want greater value from everyday foods.
Harvey Aaron, Sales Director Northern Europe for Dole Packaged Foods Europe (The Grocery Trader, 11th June 2009)
"The main thing about canned food is the consumer assumption that when you open a can the food will always be usable, fresh and palatable."
Nick Mullen, Director of Metal Packaging Manufacturers Association (foodmanufacture.co.uk, 6th December 2010)
Of all the packaging mediums, we regard cans as the most effective. The strength also allows them to be handled within the industry: from factory gate to shop shelf."
Steve Thomas, Chairman of Canned Food UK (foodmanufacture.co.uk, 6th December 2010)
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Metal packaging has strong sustainability credentials and we are constantly looking at how we can improve this position and reduce the carbon footprint of metal cans even further.
Gordon Shade, Chief Executive of European Metal Packaging (EMPAC), (foodmanufacture.co.uk, 27th July 2010)
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Canned Foods
Executive Summary
Executive Summary
This Key Note Market Report Plus examines the UK canned foods market. The market has been growing in value steadily in recent years, thanks to its trusted format and a wave of new product innovations aimed at training consumer loyalty. However, since 2008 this growth has been accelerated rapidly in value terms due to rising commodity prices, such as that of metal used in the canning process, and a sharp increase in food price inflation. Key Note divides the canned foods market into eight main sectors: vegetables, fish, soup, meat, fruit, pasta, desserts, and cooking sauces. Canned vegetables comprise the largest sector, with retail sales of 739m in 2010, a 30.8% stake of the total market. With the exception of canned fruits, desserts and cooking sauces, most sectors showed growth between 2009 and 2010 in value terms, although volume sales are generally declining across the market. The canned vegetables sector, however, is bucking this trend, mostly due to the popularity of baked beans. The recession encouraged consumers to stock up on canned foods, the cheaper alternative to other formats, but even this didnt stop the volume decline altogether. The major companies in the UK dominate the market. These companies also have a strong presence in the international market and come with strong brands and immense buying power, making it very difficult for new, smaller companies to enter the market. Three of the largest multinational companies with bases in the UK are Princes (owned by the Japanese Mitsubishi Corporation), Heinz and Del Monte. The barriers for entry into the market are so high because of these companies; when this is combined with falling volume sales, very few, specialist niche players have a chance to enter the market. In January 2011, Key Note commissioned a NEMS market research survey to assess consumer attitudes towards canned foods. The survey produced some surprising results, including finding that fewer people bought canned foods for their value than was first assumed, in light of the recession just 5.7% of the respondents stated that they consumed canned foods for this reason. However, the survey confirmed that convenience was a major factor considered when consumers purchased canned foods. Shelf life was also quite important perhaps consumers regard the ability to store canned goods for a long period of time as a way to protect themselves from food price inflation. Key Note predicts growth in terms of value sales in the 5 years between 2011 and 2015, supported by rising commodity prices; the market will grow by approximately 16.7% over the forecast period, a 50.8% increase on the 2006 figure. Volume sales will continue to be shored up by the aftermath of the recession, such as high unemployment, but Key Note believes it to be unlikely that this can reverse the decline in the market in terms of volume. Value sales for some individual sectors, such as canned desserts and canned cooking sauces, are likely to fall quite rapidly due to the rising popularity of other packaging formats.
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Market Definition
1. Market Definition
REPORT COVERAGE
This Key Note Market Report Plus examines the UK canned foods market, a well-established sector of the grocery market which has been prominent for many decades. However, in recent years canned foods have been facing increased competition from other packaging formats, although few of these have the advantage of being a trusted, well-known preservation method. Canned goods have a long shelf life, which is very appealing, and are therefore easy to store. Canned foods also include a wide variety of food types. For the purpose of this report, the market is divided into eight sectors, all of which are detailed below.
MARKET SECTORS
Vegetables this is the largest and most diverse sector of the market and held an approximate 30.8% share of the total canned foods market in 2010. In 2008, the baked beans category was worth nearly half (49.3%) of the canned vegetables sector in terms of retail selling prices (rsp), but strong growth indications have raised this figure to around 52.2% of the canned vegetables sector in terms of value in 2010. Other categories included canned peas and sweetcorn. The sector is benefiting from the increasing popularity of ethnic foods, a trend which is introducing untraditional vegetables to the UK market. Fish this is another wide and diverse category and includes several species of fish such as tuna, salmon and anchovies, as well as canned shellfish such as crab meat. Soup a very traditional and long-established cornerstone of the canned foods market which comes both in condensed and standard varieties. Meat popular types of canned meats include ham and corned beef. This sector also includes canned ready meals, such as canned pies and chilli con carne. Fruit this sector includes nearly every type of fruit available on the fresh produce market, but in canned format. Available canned fruits include peaches, apples, strawberries, pears and cherries. This sector also technically includes canned tomatoes, which are strictly classed as a fruit but will come under the vegetable umbrella for the purposes of this report, purely because of the way that they are used in cooking. Pasta canned pasta is generally aimed at a younger audience. Spaghetti products are the most popular variant, with products such as regular spaghetti, spaghetti hoops and alphabet-shaped spaghettis.
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Market Definition
Desserts this sector can be divided into three main subsectors: milk puddings, canned custards and sponge puddings. Cooking sauces canned cooking sauces are now increasingly threatened by new packaging formats. Sales of sauces in plastic and glass containers are on the rise, targeting consumers who want the combination of quick and easy preparation and a re-sealable product. The sector is dominated by ethnic sauces designed to make dishes such as stir-fries, Mexican dishes and curries of various cuisines.
MARKET TRENDS
The Recession
The recession ended in the last quarter of 2009 and 2010 began with economic growth, though this growth has been slow and tentative. The effects of the recession were still lingering even as 2010 came to a close, especially in wake of the Governments cuts aiming to reduce the budget deficit. An economic hangover has left job cuts as well as pay and hiring freezes on the cards for the future, which means that money is still as tight for many consumers as it was during the recession. Such a climate sparks demand for canned foods as they are generally less expensive when compared with their fresh counterparts and there is usually very little waste. A very long shelf life is also appealing, because it protects consumers from price increases caused by inflation if they buy canned foods and store them before such increases. Volume sales of canned goods had been declining pre-2009 and pre-recession as consumers increasingly opted for the pricier, fresh alternatives; 2009 and 2010 saw this decrease in volume sales slow as cheaper canned goods became the more favoured option.
Environmental Concerns
Although cans have been seen as an environmentally friendly option due to the wide availability of recycling facilities for steel and aluminium, the UK achieves very low recycling figures for cans. According to the website GreenBoxDay, the UK only recycles 2.5 billion of the 12.5 billion cans it uses each year. Also, owing to their weight, cans are less environmentally friendly to transport than lighter alternatives such as cartons, as they produce a bigger carbon footprint. Furthermore, the cylindrical shape of cans means that they take up more space in a shipment compared with cartons, further increasing their carbon footprint. Cuboids make for perfect shelf and transport space optimisation.
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Market Definition
However, cartons are made mostly out of wood fibre; this can be recycled but the quality degrades each time until it is eventually no longer reusable and must end up in landfill. This compares with steel and aluminium cans, which can be recycled very nearly ad infinitum and not lose their quality. Also, cans are much more durable than cartons, which means that they are preferred in factories and retail as they are much less likely to break or burst during the shipping and handling process. The waste produced through less durable cartons is also bad for the environment. Consumers trust cans as a long-life product over cartons and so cans are unlikely to lose much ground to cartons in the near future.
Convenience Foods
Food markets have been driven by a demand for convenience foods for several decades. This trend led to the explosion in popularity of appliances such as microwaves and has affected the food industry itself in terms of the products manufacturers produce. The canned foods market has been quick to exploit the growing demand for convenience products with easy-to-prepare credentials from those who wish to prepare meals with minimal time and effort. An increasing number of parents are balancing full-time jobs and raising families, drastically reducing the time available for preparing meals and increasing a reliance on canned foods canned vegetables, for instance, are ready-prepared inside the can and require no preparation other than the cooking process. However, the trend towards convenience foods also means a trend towards alternative forms of packaging. Although canning has been a trusted method of food preservation for decades in the UK, alternatives such as glass, plastic and pouches are being introduced to the market. These products are resealable therefore enabling the consumer to only use as much as is desired, as opposed to having to use the total content of the packaging in one go thus reducing waste, and are also able to go straight in the microwave, whereas metal cans cannot.
Health Concerns
The Department of Health has been heavily promoting the link between health and diet in response to the UKs rising obesity levels. The most recent Health Survey for England (HSE) conducted by the NHS was in 2008, which revealed that more than three-fifths (61.4%) of adults were either overweight or obese; the same was true of 27.3% of children. The Department of Health estimates the cost of treating conditions directly related to obesity at 4.2bn, a figure that will double by 2050 if action is not taken. The Government recommends a minimum serving of five portions of fruit and vegetables every day and is keen to promote the fact that vegetables from cans count towards this benchmark, which appeals to consumers who feel that they do not have the necessary time to prepare fruit and vegetables themselves, aiding the canned vegetables sector greatly.
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Market Definition
Another boost to the canned foods market is the rise in popularity of oily fish as a source of Omega-3, which is also promoted by the Government. The Department of Health reveals a raft of benefits from eating oily fish, including its role in preventing heart disease. Manufactures have been quick to cash in on this trend, proclaiming the health benefits of their canned fish products to the general public. Again, the canned format makes for a much more convenient option than preparing fresh fish for home consumption.
ECONOMIC TRENDS
Staple foods, including those found in cans, are unlikely to be affected by economic trends because, no matter how dire the finances of consumers may be, they still have to eat. Canned foods, however, are a good option during times of economic difficulty because of their relatively low cost when compared with other varieties of food. This has kept the market buoyant in recent years.
Population
The UK resident population stood at 61.8 million in 2009, up by 0.6% from 2008 and up by 2.6% on 2005s figure of 60.2 million. As the UKs population continues to grow, so does the demand for all foodstuffs, including canned foods. Much of the increase in population is accounted for by immigration; due to this demographic, there is a growing demand for ethnic foods from the respective countries of origin one of the best-known ways to preserve and ship goods is by canning them. An increasing population is likely to increase demand for canned ethnic foods from domestic origins also, which will further boost sales of canned foods.
Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2005-2009

2005 Female Male Total % change year-on-year 30,742 29,493 60,235 2006 30,895 29,689 60,584 0.6 2007 31,068 29,918 60,986 0.7 2008 31,244 30,154 61,398 0.7 2009 31,418 30,374 61,792 0.6
Source: Monthly Digest of Statistics, November 2010, National Statistics website Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)
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Market Definition
Gross Domestic Product

The UKs gross domestic product (GDP) contracted in the final two quarters of 2008, the harbinger of the recession. 2009 saw further reductions in the UKs GDP in both current and chain-linked terms. When GDP falls, so does employment, investment, spending and production, which is poor news for most markets. However, the canned foods market is likely to shrug off the downturn with greater ease than its rivals in other sectors because of its robust market. The demand for food will always exist.
Table 1.2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (m), 2005-2009
2005 Current prices % change year-on-year Annual chain-linked GDP % change year-on-year
GDP gross domestic product
2006 1,328,363 5.9
2007 1,404,845 5.8
2008 1,445,580 2.9
2009 1,392,634 -3.7
1,254,058 -
1,292,335 -
1,328,363 2.8
1,364,029 2.7
1,363,139 -0.1
1,295,159 -5.0
Source: Economic & Labour Market Review, November 2010, National Statistics website Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)
Inflation
Inflation fell by 0.3 percentage points in 2008, from 4.3% to 4%. In 2009, it fell by 4.5 percentage points, taking the country into deflation. Prior to this, inflation had been rising (reaching a peak of 4.3% in 2007, up 1.5 percentage points from 2005).
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Market Definition
Table 1.3: UK Rate of Inflation (%), 2005-2009

2005 Inflation (%) Percentage point change year-on-year 2.8 2006 3.2 0.4 2007 4.3 1.1 2008 4.0 -0.3 2009 -0.5 -4.5
Note: inflation is at retail price index (RPI); data shown are annual average changes.
Source: Focus on Consumer Price Indices Data for October 2010, published November 2010, National Statistics website Crown copyright material is reproduced with the permission of the (and the Queens Printer for Scotland) Controller of HMSO
Unemployment
The number of unemployed people in the UK spiked dramatically in 2009 to 1.53 million. In the years prior to this, the figures had been fairly steady, between 860,000 and 950,000, but the recession caused widespread lay-offs as companies had to cut costs to survive. National Statistics revealed that unemployment hit a peak of 2.3 million in the 3 months ending April 2010, the highest since November 1996. Unemployment leads to lower disposable income for consumers, which means that they are likely to turn to cheaper alternatives such as canned foods.
Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2005-2009

2005 Actual number of claimants (million) % change year-on-year 2006 2007 2008 2009
0.86 -
0.95 10.5
0.86 -9.5
0.91 5.8
1.53 68.1
Source: Monthly Digest of Statistics, November 2010, National Statistics website Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)
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Market Definition
Household Disposable Income

Despite the tough economic climate, household disposable income has risen year-on-year since 2005. The rise in household income slowed in 2010 due to deflation. Whereas in inflationary circumstances the size of a debt such as a mortgage shrinks in real terms, during deflation the value of that debt increases in real terms and the value of any repayments made falls, decreasing disposable income. 2009s deflation caused the slowdown in the overall trend of a rising household disposable income, which grew by just 1.7%.
Table 1.5: UK Household Disposable Income Per Capita (), 2005-2009

2005 Household disposable income () % change year-on-year 2006 2007 2008 2009
13,572 -
14,080 3.7
14,453 2.6
14,976 3.6
15,225 1.7
Source: Economic & Labour Market Review, November 2010, National Statistics website Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)
MARKET POSITION
The UK
Overall, the recession has had a positive impact on the UKs canned foods market. Marketing Director (MD) of Princes, Ruth Simpson, shared the following in an article in The Grocer on 29th October 2010: One of the biggest positives about the canned food category is that it is underpinned by consumer loyalty. Canned food is a store cupboard staple and, as such, strong merchandising and promotions can drive great sales spikes while major troughs are rare. In 2008, 2.9% of total UK household expenditure on food went on canned foods, down from 3.2% in 2006. For 2009, expenditure on canned goods was around 2.7% of the total household expenditure on food. Total expenditure on food rose sharply in 2010 due to inflation and the price of commodities such as wheat. In 2010, Key Note estimates that household expenditure on canned foods amounted to 2.4bn at rsp, approximately 2.7% of total household expenditure on food.
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Market Definition
Table 1.6: Total UK Household Expenditure on Food and Household Expenditure on Canned Foods (m at rsp and %), 2006-2010
2006 Total household expenditure on food (m at rsp) Household expenditure on canned foods (m at rsp)e Expenditure on canned foods as a % of total expenditure on food
rsp retail selling prices e Key Note estimates
2007
2008
2009
2010
60,627 1,955 3.2
67,125 1,996 3.0
74,790 2,162 2.9
83,813 2,298 2.7
88,365 2,398 2.7
Source: Consumer Trends, Quarter 2 2010, National Statistics Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)/Key Note
Overseas
According to Steve Thomas, Chairman of the industrial body Canned Foods UK, a third of the market [in terms of volume] including most canned fruit, fish and tomatoes, [is] imported. A great deal of the UKs canned food comes from abroad purely because they are foods that are grown or caught abroad and, as is the procedure for the canned foods industry, are processed and tinned as soon as possible to keep them fresh. The value of the canned foods market worldwide has generally risen because of a rise in commodities (food, steel and aluminium) and is not necessarily fuelled by an increase in volume sales across the entire market, although some areas did see volume sales growth. Russia, the UK, the US, Japan, Germany and France are the six countries that account for 75% of all canned ready meal sales. The four major growing economies are shortened to BRIC (Brazil, Russia, India and the Peoples Republic of China [PRC]); these countries are all persistently buying more and more food including tinned food as they become wealthier. With economic growth comes a boom in the consumer market, including that of groceries. Brazil, for example, has seen a huge surge in the demand for tinned food, a trend that The Can and Aerosol News considers irreversible. There is growing demand in the PRC for meat products to supplement the traditional diet that was previously low in meat, mostly due to the expense involved. As these four economies expand they demand more food resources, which inflates the price of such products across the globe.
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Canned Foods
Market Size
2. Market Size
THE TOTAL MARKET
Sales of canned foods rose throughout the review period, from 1.96bn (at retail selling prices [rsp]) in 2006 to 2.4bn in 2010, an increase of 22.6%. Sales of canned fruit and canned desserts declined in 2010 and sales of cooking sauces remained steady, but the other sectors experienced growth. High food price inflation, as well as steep increases in the price of steel and aluminium, has spurred some of these increase in value. Despite the fact that the market increased in terms of value over the review period, The Grocer reported a 4.3% fall in terms of volume, but also revealed that sales of canned foods by volume only decreased by 0.2% in 2010, suggesting that the sector may be poised to return to growth in volume terms. However, it must be noted that Key Note predicts the market in terms of value, not volume. The recession seems to have had a somewhat positive effect on the market in that more consumers are stocking up on canned goods, but this has not actually caused growth in terms of volume, but rather managed to reverse the trend of decline.
Table 2.1: The Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp and %), 2006-2010
% of Total 2010 30.8 21.9 18.4 13.9 5.8 5.2 3.3 0.8
2006 Vegetables Fish Soup Meat Fruit Pasta Desserts Cooking sauces 502 438 350 299 148 117 82 19
2007 531 445 353 303 149 118 81 16
2008 629 475 380 313 142 122 84 17
2009 700 490 420 325 140 123 82 18
2010 739 525 440 333 138 124 80 18
Table continues...
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Market Size
Table 2.1: The Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp and %), 2006-2010
...table continued
% of Total 2010
100.0
2006 Total % change year-on-year

rsp retail selling prices does not sum due to rounding
2007 1,996 2.1
2008 2,162 8.3
2009 2,298 6.3
2010 2,397 4.3
1,955 -
Source: Key Note
Figure 2.1: The Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp and %), 2006-2010
2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 2006 2007 2008 2009 2010 Vegetables Fish Soup Meat Fruit Pasta Desserts Cooking sauces
rsp retail selling prices
Source: Key Note
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Market Size
BY MARKET SECTOR
Vegetables
Canned vegetables comprise the largest sector of the UK canned foods market, holding a 30.8% share of the total market in 2010 and a value of 739m, up 47.2% from 502m in 2006. New product innovations, as well as the lingering effects of the recession, are likely to have driven this increase.
Table 2.2: The UK Canned Vegetables Sector by Value at Current Prices (m at rsp and %), 2006-2010
2006 Value (m at rsp) % change year-on-year Share of total market (%)
2007 531 5.8 26.6
2008 629 18.5 29.1
2009 700 11.3 30.5
2010 739 5.6 30.8
502 25.7
Source: Key Note
By far the largest subsector of the canned vegetables sector is baked beans, with a market value of 385.4m at rsp in 2010, accounting for 52.2% of sales in the canned vegetables sector. In 2008, Key Note estimated a 49.3% market share for baked beans and a value of 310m. This is due to a number of reasons, including Branston launching its baked beans to compete with Heinz, which started a war of product innovation between the two rivals to produce a wider variety of beans to compete with each other. The greater the range of products, the more likely consumers are to find a niche that fits their particular taste, and so a greater volume of products is sold; baked beans comprise one of the few subsectors to have bucked the trend of a volume slowdown. Sales of canned tomatoes increased in value by 18.4% in 2010 compared with 2008, from 150m to 177.6m. The market share accounted for by tomatoes did not increase considerably in 2010 (up 0.2 percentage points from 23.8% in 2008). The cost of importing tomatoes from Italy, where the majority of the UKs canned tomatoes are sourced from, increased in early 2010 due to a weak and fluctuating sterling and a general rise in prices. Canned tomatoes can be used to create simple Italian dishes from scratch at home without the hassle of preparing fresh vegetables (some canned tomatoes even come pre-chopped), a trend which will become increasingly prevalent as home cooking is turned to as an alternative to expensive meals out in restaurants.
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Market Size
For the canned peas sector, Key Note predicts a fairly considerable decline in 2010, down 12.5% on 2008s 93m to a market value of 81.4m. This is due to a rise in the popularity of frozen peas, which are just as easy to prepare as canned peas and have not been at the centre of a controversy about their poor health qualities (such as high sugar and salt contents) because they have not been preserved any other way apart from freezing. Also, Birds Eye launched a resealable bag of frozen peas in late 2010, further increasing the convenience of frozen peas over canned. Sales of sweetcorn increased in value in 2010 to 70.2m. The share of the canned vegetable sector accounted for by sweetcorn increased from 8.3% in 2008 to 9.5% in 2010 as a result of a number of factors, including the Green Giant brand reducing the salt and sugar content in their products. Ed Culf, Marketing Director (MD) of General Mills, was quoted in The Grocer in October 2010 revealing that he believes canned sweetcorn plays an essential part in housekeeping since the recession. He says: Price is top of the decision hierarchy when purchasing canned veg, but brand is top when buying sweetcorn... [There is] a series of recipes demonstrating how it can be used as a healthy, value-for-money option, particularly at family mealtimes. Sweetcorn, like the majority of food, has been subject to price rises since 2008, which explains some of the considerable rise in value sales on the previous years. However, sweetcorn has also become much more popular of late, thanks to aforementioned innovations that give it a healthier image and a campaign by Green Giant and other manufacturers revealing that sweetcorn counted towards a persons five-a-day.
Table 2.3: The UK Canned Vegetables Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Baked beans Tomatoes Peas Sweetcorn Other 385.4 177.6 81.4 70.2 24.4 % of Total 52.2 24.0 11.0 9.5 3.3
Total
739.0
100.0
Source: Key Note
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Market Size
Fish
Canned fish is the second-largest category in the canned foods market. Its share of the market grew very slightly between 2009 and 2010, up from 21.3% to 21.9%. Part of this increase is likely to be the result of a rising cost in commodities used in the canning process, as well as a rise in the cost of fish as stocks become scarce. There are a number of new product developments (NPDs) in this sector which have contributed to canned fishs success, including John Wests No Drain tuna. As well as this, there has been an increasing amount of promotion when it comes to the health benefits of fish and the Omega-3 it contains.
Table 2.4: The UK Canned Fish Sector by Value at Current Prices (m at rsp and %), 2006-2010
2006 Value (m at rsp) % change year-on-year 438 2007 445 1.6 2008 475 6.7 2009 490 3.2 2010 525 7.1
Share of total market (%)

22.4
22.3
22.0
21.3
21.9
Source: Key Note
Tuna continues to be the most popular type of canned fish, partly due to innovations by companies such as John West popularising the product. However, tuna prices increased by nearly 40% in 2008, and the price of salmon, the second-most popular fish in the canned fish sector, increased sharply in 2010 due to poor stocks. These factors have increased their value in terms of retail selling prices, but volumes appear to be falling as some shoppers favour cheaper products such as sardines. These also come under the umbrella of oily fish and have received promotional support purporting their health benefits.
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Market Size
Table 2.5: The UK Canned Fish Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Tuna Salmon Mackerel Sardines Others (including pilchards and shellfish) Total
% of Total 63.7 17.0 7.7 6.5 5.1 100.0
334.4 89.3 40.4 34.1 26.8 525.0
Source: Key Note
Soup
Both the beginning and close of 2010 saw very harsh winter weather, which traditionally fuels demands for soups and other comfort foods as winter warmers. As well as providing a healthy, warming meal, especially essential for the elderly during a prolonged spell of cold weather, canned soup has a very long shelf life, which means that it can be kept in store cupboards for when the weather is particularly poor. All of these factors led to soup experiencing strong growth in 2010, with its market value increasing to 440m, up by more than a quarter (25.7%) on 2006.
Table 2.6: The UK Canned Soup Sector by Value at Current Prices (m at rsp and %), 2006-2010
2007 353 0.9 17.7
2008 380 7.6 17.6
2009 420 10.5 18.3
2010 440 4.8 18.3
350 17.9
Source: Key Note
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Market Size
Standard soups have recorded an increase in value thanks to the inclusion of own brands within this category, which are becoming ever more popular owing to a general decrease in consumer spending but a desire for warming products over the winter. The condensed soup subsector is also growing, albeit only by a small amount; this growth is attributed to the fact that they are increasingly being used as bases for home-cooked meals, made from scratch. The market share of low-calorie soups has declined to 8.4% due to increased promotion from other major brands of their own reduced-fat and -salt soups, which increases their appeal to a new generation of health-conscious consumers who are returning to regular varieties now that they have similar health benefits. The premium and thick soups category is also in decline, having been muscled out by carton formats such as New Covent Garden fresh and chilled soups. In September 2010, Covent Garden brought out its extra-thick chunky range in pots not cans; this product straddles both the premium and thick soup categories and is one such innovation that is affecting both market sectors. As the market size for canned foods increased in 2010, soups held an 18.4% share of the canned foods market.
Table 2.7: The UK Canned Soup Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Standard Premium Thick Low-calorie Condensed Total
% of Total 54.7 20.6 10.3 8.4 6.0 100.0
240.7 90.8 45.3 36.9 26.3 440.0
Source: Key Note
Meat
The canned hot meat sector has grown in both market share and value in recent years, taking over the cold meats market. There have been a number of NPDs in the hot meat category (which includes canned ready meals, pies and mince), which have contributed to the increase.
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Canned Foods
Market Size
Table 2.8: The UK Canned Meat Sector by Value at Current Prices (m at rsp), 2006-2010
2006 Value (m at rsp) % change year-on-year 299 2007 303 1.3 2008 313 3.3 2009 325 3.8 2010 333 2.5

15.3
15.2
14.5
14.1
13.9
Source: Key Note
It appears that the canned pies sector has seen strong growth in 2010 due to several new product innovations. Re-launches, such as that of Princes canned pies, attracted quite a large amount of promotional activity. The success of canned pies has been detrimental to the two categories above it in terms of retail value (canned ready meals and canned pie fillers), a trend that is quite likely to continue in 2011. Ready meals now come in much more convenient formats. Ethnic foods are the most popular type of ready meals and, while those that come in cans do not contain rice (placing their ready meal moniker under scrutiny for some), other formats, such as frozen ready meals, do contain rice and thus the entire meal in one, possibly making the canned ready meals option less popular. Sales of canned pie fillings were down. This is partly due to the fact that there has been a great amount of innovation in the canned pies sector in an attempt to make them more palatable and increase competition between various brands on the market. Due to the convenience and the improved taste of canned pies, consumers are opting to purchase fewer cans of pie fillings because creating a pie from a can of pie filling is much more labour-intensive than simply opening a can with a pie already inside. Hot meat products have helped the canned meat market grow in volume and value; however, the cold meats market is in decline in terms of volume. Despite this, high prices of beef following a recent switch away from cattle farming in Argentina to other, more prosperous farming methods (a trend that is likely to be followed by other countries), plus higher freight costs and an increase in the cost of raw materials for cans have somewhat disproportionately distorted the retail prices upwards. The value of canned mince has increased by a fairly sizeable amount between 2008 and 2010 (from 5m to 11.9m), largely due to Delia Smith popularising the meat in her recipe books and television shows a trend that was slow to catch on but took off when it did.
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Market Size
Corned beef generated the highest levels of retail sales in value terms in 2010. However, the market share of corned beef has not increased considerably since 2008, only rising by 1.4 percentage points, from 22.1% to 23.5%. The majority of the increases come from price inflation. Furthermore, cold meats have an old-fashioned image, turning younger generations away from them to other options, which is likely to affect the market negatively in the future.
Table 2.9: The UK Canned Meat Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Hot Meats Ready meals Pies Pie fillings and stewed steaks Chicken Mince Other Total hot meats Cold Meats Corned beef Ham Chopped pork and ham Other Total cold meats Total
% of Total 19.9 13.5 10.2 7.2 3.6 6.2

60.7
66.4 45.1 34.0 24.0 11.9 20.8 202.2
78.2 28.6 14.0 10.0 130.8 333.0
23.5 8.6 4.2 3.0 39.3 100.0
Source: Key Note
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Market Size
Fruit
The canned fruit sector has been in decline in recent years Key Note estimates that 2010 saw a loss of 1.4% on 2009. This is due to a number of factors. Firstly, canned fruit is often preserved in syrup, giving it an unhealthy perception in an increasingly health-conscious society. Also, the availability of fresh fruit continues to grow and is increasingly stocked all year round by supermarkets from international suppliers. As well as this, canned fruit has come under increasing pressure from plastic snack pots, which are considered lunchbox friendly for children because of the ease with which they can be opened compared with canned fruit. In 2010, the sector represented 5.8% of the markets total value.
Table 2.10: The UK Canned Fruit Sector by Value at Current Prices (m at rsp and %), 2006-2010
2006 Value (m at rsp) % change year-on-year 148 2007 149 0.7 2008 142 -4.7 2009 140 -1.4 2010 138 -1.4

7.6
7.5
6.6
6.1
5.8
Source: Key Note
The pineapples sector is the only one that has shown growth on 2008s levels in terms of value, rising from 33.8m to 35.9m. Canned pineapple is Del Montes flagship canned fruit; the company saw financial difficulties in 2010 which it managed to recover from via rebranding and restructuring. As its flagship fruit, pineapple received a lot of this attention. Also, the other fruits in this category are easy to get hold of, prepare and eat. Pineapples are tricky to prepare and require a lot of slicing and peeling, which means that the tinned, pre-prepared version is going to continue to be popular.
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Market Size
Table 2.11: The UK Canned Fruit Sector by Type of Product by Value at Current Prices (rsp and %), 2010
Value (m at rsp) Pineapples Peaches Fruit cocktail Pears Others Total
% of Total 26.0 18.8 14.9 6.5 33.8 100.0
35.9 25.9 20.6 9.0 46.6 138.0
Source: Key Note
Pasta
The value of canned pasta fell until 2006, the beginning of the review period, and has shown slight growth since. The majority of canned pasta dishes are aimed at children (spaghetti hoops or alphabet spaghetti) and, as parents become more aware of the health risks associated with the amounts of sugar and salt their children are consuming, they are turning away from canned pasta. Similarly, dried pasta also has a very long shelf life and can be kept in the cupboard as a staple and requires very little effort to cook boiling dried pasta would take a similar amount of time to microwaving canned pasta, and it also gives dried pasta a healthier image than canned. However, with the price of wheat rising, the price of durum wheat, used to make pasta, is on the rise too. Even as volume sales fall it is likely that the sector will still hold its share in terms of value in the future because of these price increases.
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Market Size
Table 2.12: The UK Canned Pasta Sector by Value at Current Prices (m at rsp and %), 2006-2010
2007 118 0.9 5.9
2008 122 3.4 5.6
2009 123 0.8 5.4
2010 124 0.8 5.2
117 6.0
Source: Key Note
The canned pasta sector has shown growth, particularly between 2007 and 2008. Growth levelled off in the following years but has still continued marginally. The expansion of the market is down to several factors, including increased awareness by manufacturers of the health concerns of parents, as well as better marketing techniques. Heinz launched a new brand of canned pasta in 2010, Heinz Mini Meals, which capitalise on advertising techniques such as bright colours for children and healthy nutrition for the parents.
Table 2.13: The UK Canned Pasta Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Pasta shapes Pasta meals Smooth spaghetti Other Total
% of Total 46.5 35.1 11.4 7.0 100.0
57.7 43.5 14.1 8.7 124.0
Source: Key Note
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Market Size
Desserts
The market has been in decline in recent years. There are a number of reasons for this; for instance, there has been a large number of NPDs in the desserts sector. Farmhouse Foods brought out a dessert called the Lovetub, a chocolate or caramel sponge pudding, in late 2010. This was designed to be warmed in the microwave and eaten straight from the tub as an alternative to ice cream. There are also now diet versions of ice cream, including R&R Ice Creams Skinny Cow range. Also, Thorntons is branching out into the desserts market with chocolate cake and chocolate puddings. As baking techniques improve, cake products last longer and are a more viable option for desserts, which lessens the need for canned puddings with long shelf lives. Also, the canned desserts market has an old-fashioned image, especially items such as sponge and milk puddings, which means that they are favoured only by older customers and not by the younger generation.
Table 2.14: The UK Canned Desserts Sector by Value at Current Prices (m at rsp and %), 2006-2010
2006 Value (m at rsp) % change year-on-year 82 2007 81 -1.2 2008 84 3.7 2009 82 -2.4 2010 80 -2.4

4.2
4.1
3.9
3.6
3.3
Source: Key Note
The canned desserts sector is declining in value relatively steadily; there was slight growth in 2008, a year Heinz and Premier Foods invested heavily in the market, but after this year it returned to decline. Heinz sold its frozen desserts business at the end of 2009, displaying a lack of confidence in the desserts market in general. Canned desserts accounted for 3.3% of the total market share in 2010, with a value of 80m. Key Note predicts that this market will shrink further in the following years.
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Market Size
Based on 2008s figures, the only subsectors of the canned desserts sector to show growth in terms of market value are canned custards and canned sponge puddings. There are so many aforementioned alternatives to canned sponge puddings available which do not even require the effort of opening a can. Once again, canned milk puddings lost out because of their lack of a young image. Custard has advanced in value and market share purely because it is a condiment to be served with other fresh, un-canned puddings that consumers are now purchasing. Although custard comes in pouch form now, the canned servings are generally enough for one helping, thus eliminating waste.
Table 2.15: The UK Canned Desserts Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Canned milk puddings Canned custards Canned sponge puddings Total
% of Total 57.5 25.6 16.9 100.0
46.0 20.5 13.5 80.0
Source: Key Note
Cooking Sauces
There are so many cooking sauce products on the market; the majority of which are in formats other than cans. The main benefits of glass bottles and jars are that they can be resealed, whereas pouches often contain specific amounts (i.e. just enough for one). These all limit the waste caused by a cans lack of a resealable top and the fact that the canned cooking sauces market is often not as strictly portion-controlled as pouches are. However, canned sauces are managing to hold fairly steady without much fluctuation over the review period.
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Market Size
Table 2.16: The UK Canned Cooking Sauces Sector by Value at Current Prices (m at rsp and %), 2006-2010
2007 16.0 -15.8 0.8
2008 17.0 6.3 0.8
2009 18.0 5.9 0.8
2010 18.0 0.0 0.8
19.0 1.0
Source: Key Note
All cooking sauces have seen positive results as a result of the recession as consumers stay at home and cook for themselves as an alternative to expensive takeaways and meals out in restaurants. Indian curry sauces still had the largest share of the market (51.7%) in 2010, an increase from 50% in 2008. This is due to a rise in popularity of Indian food with the general public. Key Note estimates that pasta sauces have also increased in value, moving from third place in 2008 to second in 2010. This is because of the aforementioned shift away from canned pasta towards fresh pasta, which requires a sauce to accompany it. Oriental and Mexican sauces have also increased their market share, once again due to growing popularity with the public. According to a TGI survey explored more fully in Chapter 7 Buying Behaviour the penetration of canned cooking sauces has risen since 2006. More adults are using them today than previously, although the results of the survey also show a large increase in pouches of cooking sauces. It is further innovation in the pouch format which is making it more popular for a number of factors, including convenience; competition from pouches is the main reason Key Note predicts a static market for canned cooking sauces in 2010, despite them having a higher consumer penetration.
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Market Size
Table 2.17: The UK Canned Cooking Sauces Sector by Type of Product by Value at Current Prices (m at rsp and %), 2010
Value (m at rsp) Indian curry sauces Pasta sauces Traditional/other Oriental Mexican Total
% of Total 51.7 18.9 15.6 7.2 6.7

100.0
9.3 3.42 2.8 1.3 1.2 18.0
Source: Key Note
OVERSEAS TRADE
General Overview
The UK Overseas Trade Statistics publication, published as National Statistics by HM Revenue & Customs, does not break food imports or exports down by type of packaging, and therefore there are no import or export statistics available for canned products. However, the UK is a net importer of canned goods rather than an exporter; a large variety of canned foods (such as pineapples, tomatoes and many types of canned fish) is only widely available abroad and is canned at the source near the place of origin. Nevertheless, the UKs main canning operations do export goods, including Baxters canned soup factory operating in Speyside. Heinz also cans a number of its goods in the UK; it is a large company that exports its goods all over the world. Vegetable-producing areas, such as East Anglia, also contain a number of canning operations that export their goods.
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Canned Foods
Industry Background
3. Industry Background
RECENT HISTORY
When the British used to store food in larders, as was common prior to the Second World War, canned food had an enormous penetration in the grocery market. It was a staple part of the publics diets in this period this is still true now, although to a lesser extent. Canning really took off during the First World War, when thousands of tons of canned goods were shipped to the front line to feed troops, providing a massive boost for the industry. During World War II, canned foods suffered despite their convenience and long shelf life because the metal required for the cans was needed for the war effort. Also, supplies of canned food were essential to feed troops on the frontline, which further limited consumption by the general public. The growth of microwave oven ownership in the 1980s proved a huge boost to the frozen food sector, while chilled food has also become increasingly popular over the past 20 years. This has led to a decline in sales, although the recession may have helped to this. However, it is likely that volume sales if not retail prices will continue to fall in the longer term, reflecting the continuing growth in the popularity of chilled foods and the trend towards alternative packaging such as cartons, jars and pouches.
NUMBER OF COMPANIES
There are no figures available for the number of canners in the UK; however, the number of enterprises engaged in the manufacture of cans has undoubtedly fallen sharply over the past 20 years. This decline is expected to continue due to a fall in volume sales. Furthermore, canners are coming under increasing pressure from rising costs and thus further contraction of the industry is expected. The UKs canning operations are dwindling rapidly in favour of cheaper, overseas operations.
REGIONAL VARIATIONS IN THE MARKETPLACE

There are no real significant regional variations in the marketplace because the canned foods category is popular across the whole of the UK. In terms of canning operations, there are several located in East Anglia, where the bulk of the UKs vegetables are produced.
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Industry Background
DISTRIBUTION
The four leading supermarket chains in the UK dominate the retail distribution of canned foods. The supermarkets sales broadly reflect their positions in the overall market. In the week ending 28th November 2010, Tesco, ASDA, Sainsburys and Morrisons accounted for over three quarters (76.1%) of all UK grocery sales, although Tesco accounted for a huge percentage of this figure. Sales of canned foods are being affected by a number of different factors, including the switching of products that would normally be sold as cans to other packaging such as cartons. In January 2010, Sainsburys switched its Basics Range chopped tomatoes to cartons instead of cans, because they have a more environmentally-friendly image, owing to the fact that they are mostly sustainably-sourced paper-based products and because their square shape allows more to be packed into the same shipment.
Table 3.3: The UK Market for Canned Foods by Retailer Share by Value (%), 2010
Tesco ASDA Sainsburys Morrisons Waitrose Aldi Lidl Iceland Somerfields Others Total Source: Key Note 30.7 17.0 16.4 12.0 4.1 3.0 2.4 1.7 1.0 11.7 100.0
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Industry Background
HOW ROBUST IS THE MARKET?

The market faces a significant threat from the chilled and frozen foods sectors, which are coming up with an increasing number of new innovations, such as resealable packaging formats that cut waste. One method, adopted by Birds Eye for its frozen peas, is a bag with a zip-close top. There is also packaging designed to be put straight in the microwave, such as soups in cartons or pouches, whereas you have to empty a can into a microwavable container. More convenient packaging such as bottles and jars are also taking up an increasing share of the market. Some sectors of the canned foods market appear to be in an irreversible decline canned desserts and canned cooking sauces are likely to disappear almost entirely within the next decade. However, the recession is likely to have bolstered the sale of canned foods as a relatively cheap meal option and it is unlikely that cans, such a major part of the packaging industry, will disappear from shelves altogether. Canning is a well-trusted method of preserving food which should keep it on the publics shopping list for many years to come, even if the sector does appear to be affected by a decline in volume sales.
LEGISLATION
Food Safety Act 1990
The Food Safety Act 1990 is one of the most important pieces of legislation affecting the catering industry in the UK. It applies to everyone who works in the production, processing, storage, distribution and sale of food and aims to make certain that all food produced is safe to eat. Since it came into force on 1st January 1991, the Act has ensured that food reaches quality expectations and is not presented in a misleading manner. It also has legal powers to levy penalties against those who breach it, which are generally handed down to local authorities which are responsible for enforcing the Act through Trading Standards and Environmental Health officers. The Act also deals with the labelling of food, its composition and usually all cases of chemical contamination. The food hygiene sector of the Act covers cases of microbiological contamination and food that, for any reason (including chemical contamination), is unfit for human consumption. Environmental Health officers enforce this. Trading Standards officers carry out work on behalf of most county councils, while environmental health work is carried out by district councils. The London boroughs and the metropolitan authorities carry out both functions. In Wales and Scotland, all work is carried out by the unitary authorities. In Northern Ireland, this work is undertaken by the Environmental Health departments of district councils.
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Industry Background
Among other measures, the Act: gives enforcement officers the power to inspect any food intended for human consumption and to detain and seize food that is suspected of not complying with food safety requirements provides for prohibition orders to be issued by the courts when there is a risk of injury to health and the proprietor of the food business has been convicted of an offence under food-hygiene or food-processing regulations provides emergency prohibition powers for use by authorised officers where there is an imminent risk of injury to health gives Ministers the power to make emergency control orders prohibiting commercial operations in relation to food, food sources or contact materials where there is an imminent risk of injury to health.
Food Labelling Regulations 1996

The 1996 Food Labelling Regulations contain the main set of rules governing the labelling of foods. There is no blanket rule for the application of these requirements; some of them only apply to specific foods. These rules are supplemented by additional requirements. Food labelling is also subject to certain Acts and Regulations that have wider applications. The Food Labelling Regulations 1996 apply in England, Scotland and Wales. A separate but similar law applies in Northern Ireland.
Food Standards Act 1999

The Food Standards Act 1999 received Royal Assent on 11th November 1999. Its main purpose was to establish the Food Standards Agency (FSA), to provide the FSA with functions and powers and to transfer certain functions in relation to food safety and standards under other Acts to the FSA. The Act gives effect to the proposals of the White Paper, The Food Standards Agency: a Force for Change. It sets out the Agencys main objective of protecting public health in relation to food, along with the functions that it will assume in pursuit of this aim, and gives the Agency the powers that are necessary to enable it to act in the consumers interest at any stage in the food production and supply chain. In mid-2010, some of the responsibilities of the FSA were given to other government organisations. The Department of Health now deals with all of the nutritional information to do with food and the Department for Environment, Food and Rural Affairs (DEFRA) handles country of origin labels.
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Industry Background
Other Food Legislation

There are many pieces of legislation attached to being a manufacturer of general, and thus canned foods. These include: Food Labelling Regulations; Miscellaneous Additives Regulation; Quantitative Ingredient Declarations (QUID) Regulations; the Weights and Measures Act; and the Consumer Protection Act. Also included are the Materials and Articles in Contact with Food Regulations, which outline the safety requirements for all materials that come into contact with food (i.e. during the packing process), such as tin and aluminium. Similarly, the Contaminants in Food Regulations (2006) legislation is also relevant to the ethnic foods market, providing a maximum limit for certain contaminants in foodstuffs.
KEY TRADE ASSOCIATIONS

Canned Food UK
Canned Food UK was established in 2001 as an organisation that promotes the benefits of canned foods. Its membership ranges from companies that produce material for cans, to firms that distribute and manufacture canned food products.
The Food Processors Association

The Food Processors Association (FPA) is part of the Food and Drink Federation (FDF) and was formed as an umbrella group for four separate sector associations: Pickles and Sauces Association Soup, Gravy and Produce Processors Association UK Sweet Spreads Association Deserts and Cake Mixes Association. In 2008, these associations were amalgamated into the FPA.
Metal Packaging Manufacturers Association

The Metal Packaging Manufacturers Association (MPMA) deals with the interest of companies engaged in the manufacture of light metal containers, closures and components. The Association covers companies ranging from large international corporations down to small independent specialist manufacturers throughout the UK. In particular, the Association represents members views to government and other regulatory bodies, both at home and in Europe, and develops industry standards.
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Competitor Analysis
4. Competitor Analysis
THE MARKETPLACE
The UK canned food industry is dominated by multinational companies. These all have strong bands and immeasurable buying power, making it very hard for emerging companies to enter the market, let alone compete in it. In the UK, the major players in the canned foods market include Heinz, Princes and Del Monte. Table 4.1 lists the most recent turnover and pre-tax profit figures for the major companies currently operating in the UK in alphabetical order. These companies are profiled in more detail in the following Market Leaders section.
Table 4.1: Selected Leading Manufacturers of UK Canned Food Products by Turnover and Pre-Tax Profit (000), Latest Financial Year End
Turnover (000) Baxters Food Group Ltd Del Monte (UK) Ltd Glenryck Foods Ltd Gondola Group Ltd HJ Heinz Company Ltd John West Foods Ltd Petty, Wood & Co Ltd Premier Foods PLC Princes Ltd Tulip Ltd Source: www.myicc.co.uk 123,981 140,050 15,917 509,300 734,400 171,537 43,644 2,661,000 1,093,217 1,138,945 Pre-Tax Profit (000) 5,031 2,928 -438 -52,400 145,700 35,576 1,563 46,700 40,663 83,559 Year Ending 30/05/09 01/01/10 30/09/09 28/06/09 29/04/09 31/03/10 02/04/10 31/12/09 31/03/10 04/10/09
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Competitor Analysis
MARKET LEADERS
Baxters Food Group Ltd
Company Structure
Founded in 1868 in Scotland by George Baxter, the company remains family-owned. The companys Chairman and Chief Executive (CE) Audrey Baxter is the great granddaughter of George Baxter. As well as soups, the company also produces preserves, condiments, beetroot, chutneys and various other types of food. Baxters first began to produce soup in 1929 with its Royal Game variety. Production remains based in Speyside at the Fochabers factory, where Baxters employs just under 1,000 members of staff. Baxters soup ranges include: Deli Inspired Soups, Favourites, Healthy Choice, Healthy Choice Chunky, Luxury and Vegetarian. The Favourites brand is the second best-selling brand in the canned soup sector, after Heinzs Classic range.
Current and Future Developments

In late 2009 and early 2010, Baxters invested more than 1m in an advertising campaign that included a re-branding of the products with new packaging and the launch of new and improved ranges and recipes. The campaign ran until the end of March 2010 and was projected to reach more than 22 million adult consumers, mainly through advertisements in national newspapers in Scotland and England. In the last quarter of 2010, Baxters began to expand its portfolio into the convenient and healthy lines, introducing the Deli Inspired bowls, which claimed to provide three of a persons five-a-day and came in a microwavable bowl for added convenience.
Financial Results
The year ending 30th May 2009 saw Baxters report a turnover of 124m and a pre-tax profit of 5m. This compares with a 232,000 pre-tax profit and a turnover of 116.4m in the year ending 31st May 2008.
Del Monte (UK) Ltd

Company Structure
Del Monte (UK) Ltd is the leading brand in the canned fruit sector in the UK, holding a quarter of the market in terms of value. It supplies fruit- and vegetable-based products and is also a major supplier in the fruit juice sector.
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Competitor Analysis

In July 2010, Del Monte pledged to reduce the sodium content of its canned vegetables line by up to 20% by 2015. Earlier, in June 2010, Del Monte also announced the launch of small bags of fresh fruit, aimed at parents wanting healthier options for their childrens school lunchboxes. Stocked exclusively at Tesco, the Del Monte Fruitini bags consisted of four varieties: Crinkly Apple Slices, Scrummy Grapes, Juicy Pineapple Slivers and Luscious Melon Bites. The advertising campaign for these was relatively low-key, although it did attempt to tap into the nostalgia produced when parents reminded themselves of eating the brands original fruit pots in the 1980s.
Financial Results
In the year ending 1st January 2010, Del Monte (UK) Ltd generated a turnover of 140.1m and a pre-tax profit of 2.9m. Turnover was up from 112.5m in the year ending 26th December 2008 and pre-tax profit was greatly improved on 2008s pre-tax loss of 1.3m.
Glenryck Foods Ltd

Company Structure
Glenryck Foods Ltd is owned by Oceana Group Ltd one of the largest conglomerates in South Africa. It has been under Oceanas control since 2004. Oceana supplies a wide range of canned fish including pilchards, sardines, anchovies, redeye herring, lobster, horse mackerel, squid, tuna, hake and other deep-sea fish and employs more than 1,200 permanent staff and 1,000 seasonal employees that fluctuate during periods of seasonal fishing activities. Glenryck is best known for its pilchards that are fished, canned and shipped from South Africa and Namibia to Europe, but they also import and distribute products from sources such as the US, Chile, Spain, Thailand and Indonesia. Glenryck has been involved in the fish canning sector for more than 75 years.

Glenryck Foods Ltd has improved many products and introduced new products to its range, such as Alaskan sockeye red and pink salmon packs, which supplements the Glenryck brand skinless and boneless medium red salmon steaks that are already on the market. More new product developments (NPDs) include own-brand sardines in tomato sauce and sunflower oil with a new tin design.
Financial Results
In the 53-week period ending 30th September 2009, Glenryck Foods Ltd reported a turnover of 15.9m and a pre-tax loss of 438,000. Both of these figures are down from the 53-weeks ending 21st September 2008, when the company reported a 22.3m turnover and 1.2m of pre-tax profit.
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Competitor Analysis
Gondola Group Ltd

Company Structure
The Gondola Group is the market leader in the UK casual dining sector, operating PizzaExpress, Zizzi and ASK, together with the smaller brands of Milano (PizzaExpress brand in the Republic of Ireland), Byron and Kettners. The Group employs approximately 14,000 people, serving almost 42 million meals a year in over 600 restaurants. For the purposes of this report, the only company under Gondolas umbrella that is relevant is PizzaExpress, which has a number of options when it comes to products consumers can use in their home, tapping in to the demographic that want restaurant-quality food but cannot afford to go out.

Having been originally sold in glass jars and bottles, Pizza Express re-launched its passata sauce (which is sold as their exclusive pizza topping recipe, but can also be used to create Italian dishes from scratch, such as pasta sauces or Bolognese) in canned format. The well-known brand name has encouraged purchases, as has the products use by a number of chefs on television.
Financial Results
The company recorded a turnover of 509.3m in the year ending 28th June 2009, along with a pre-tax loss of 52.4m. In the year ending 29th June 2008, the companys turnover was reported at 461.7m, with a pre-tax loss of 52.3m.
HJ Heinz Company Ltd

Company Structure
HJ Heinz Company Ltd is part of the US-based HJ Heinz Company, a major supplier of packaged food. Heinz has been selling products in the UK since 1886 and it is a brand leader across several sectors of the UKs canned foods market, as well as in other sectors. Products offered by Heinz include: baby foods; WeightWatchers biscuits, cakes, cereals and snacks; canned pasta products and desserts; chilled desserts and dairy products; frozen desserts; Linda McCartney meals; fruit products; frozen ready meals; salads, salad dressings and vinegar; sandwich fillers, spreads and pickles; sandwiches; sauces and tomato products; soups and soya. Most famously, however, the company produces Heinz baked beans, which hold a massive share of the baked beans market and are pretty much unchallenged by any rival manufacturer in the sector. A survey by Kantar Media conducted in October 2010 revealed that 59% of people questioned in the UK had Heinz baked beans in their cupboards.
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Competitor Analysis

Heinz saw industrial action take place at the tail end of 2010 over a pay dispute at the firms flagship plant at Kitt Green, near Wigan. Workers were angry at the below-inflation pay rise they were offered; strikes are likely to continue in early 2011 and beyond. Estimates from the union Unite warned that the companys output would be cut by 2 million cans of beans and soups for every day the workers were on strike. The companys WeightWatchers brand took a hit in 2010, with the company reporting a small shift away from the WeightWatchers brand, which includes pasta and baked beans. However, it is likely that those who would have previously bought WeightWatchers products are now moving on to other core Heinz branded products which have reduced their sugar, salt and fat content. Heinz is currently combating that decline by refreshing the brand to coincide with the new ProPoints system being introduced across the entirety of WeightWatchers International. As for its soups, Heinz launched a 2m advertising campaign in the run up to the winter soup season. The campaign ran on both television and radio and had the tag-line It has to be Heinz. In September 2010, Heinz tomato soup celebrated its 100th birthday by releasing limited-edition packaging. In 2010, the company made some large changes to its baked beans line. Snap pots in a plastic tub much like yoghurt pots were launched 3 years ago, containing one portion of beans in a microwaveable pot. July 2010 saw the launch of another packaging format: the Heinz beans Fridge Pack, a plastic, resealable jar that is the equivalent of two and a half cans of baked beans, designed for families that get through more than a tin of beans a day or sole-occupancy householders who may only eat part of a can and leave the rest. These new formats offer greater convenience than cans; on 29th October 2010, The Grocer reported Heinz Beanz marketing manager John Alderman as saying that: "The can, Snap Pots and the Fridge Pack all deliver different consumer benefits. The addition of new formats complements the can by providing additional benefits such as resealability and microwavability. However, Heinz envisages that the can will remain the dominant pack format." Despite these NPDs, the company does not appear to be concerned that canned products could lose volume sales as a result of their introduction.
Financial Results
HJ Heinz Company Ltd announced a 734.4m turnover in the year ending 29th April 2009 and recorded a pre-tax profit of 145.7m. Turnover was up from 675.7m in the year ending 30th April 2008, but pre-tax profit was down from 153.7m.
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Competitor Analysis
John West Foods Ltd

Company Structure
John West Foods Ltd is one of the UKs leading brands in the canned fish sector and has been owned by MW Brands since 2006. John West was a Scottish entrepreneur who, on emigrating to the US, set up his first cannery in Oregon in 1868. The rights to use the John West brand name were purchased by two Liverpool-based merchants, TL Pelling and CH Stanley, in 1888. The companys products include canned tuna, salmon, sardines and mackerel, as well as pts and added-value products such as tuna with sweetcorn and pasta.

In 2010, celebrity chef James Martin teamed up with John West to promote a vast range of dishes that could be quickly and easily prepared using John Wests tinned fish range. Its website features a number of free recipes penned by him. Its No Drain tuna, available in both chunks and steak format, won Product of the Year in its category in 2010. Another innovation of 2010 was pre-grilled sardines in a can; it is most common to grill sardines on a barbecue, which requires favourable weather, so John West promotes this new product as an excellent winter or poor-weather substitute for grilled sardines. 2010 also saw pre-mixed tuna sandwich fillings appearing on the shelves for the first time. In 2010, John West bucked the trend of a decline in volume sales, taking the top spot back from Princes, which had taken the crown in 2009.
Financial Results
Although turnover increased in the year ending 31st March 2010 to 171.5m, compared with 165.5m in 2008/2009, pre-tax profit rose from 1.3m to 35.6m, most likely as a result of the companys major re-branding and innovation.
Petty, Wood & Co Ltd

Company Structure
Petty, Wood & Co Ltd provides sales, marketing and distribution services for premium food and drink brands in the UK and Republic of Ireland food retail, wholesale and foodservice sectors. First established in 1816, its main interest in canned goods lies in the Epicure range that covers fish, vegetables, fruit and meat.

In May 2010, Andy Hesling, brand manager at Bundabergs UK distributor Petty Wood, said the following in The Grocer:
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Competitor Analysis
"Quality is good and it encourages the consumer to repeat purchase. Todays consumers are increasingly attracted to traditional, well made, healthier products... it appears that quality is what the consumer considers to be value for money." This was in response to a question asking whether consumers really wanted to buy high-priced, premium-range products such as the Prince of Wales Duchy Range in times of economic hardship.
Financial Results
In the year ending 2nd April 2010, Petty, Wood & Co Ltd reported a turnover of 43.6m and a pre-tax profit of 1.6m, despite distributing and selling products at the top of many sectors price ranges. In the previous year, the company generated a turnover of 46.9m and a pre-tax profit of 1.3m.
Premier Foods PLC

Company Structure
Premier Foods PLC claims to be the UKs largest food producer, releasing the figure that more than 99% of all UK households have a Premier Foods brand in their home. The company supplies both branded and own-label goods in the UK. As well as canned goods, it also supplies products such as bread, cakes, preserves, convenience foods, desserts, cooking sauces, stocks, gravies, flour, chilled ready meals, meat pies and chilled desserts. In its canned foods sector, the companys main brands include Branston (which has a strong presence in the baked beans sector, although not yet strong enough to be a real rival to Heinz), Fray Bentos (under which it supplies meat pies, puddings, corned beef and meatballs) and Hartleys (which supplies canned fruit and fruit fillings). In 2010, Premier Foods added a Just Steak canned pie to its Fray Bentos brand around the same time Princes re-launched its canned pie range.

In March 2009, the company raised 404m from shareholders and private-equity investors to pay of its debts, which were at such a level as to be concerning lenders and investors. At the end of the third quarter of 2010, Premier Foods believed that it was on track to deliver 100m of recurring cash flow for the full year in order to reduce its net debt.
Financial Results
Premier Foods PLC had a pre-tax profit of 46.7m in the 52-week period ending 31st December 2009 and a turnover of 2.66bn. In the same period in 2008, its turnover amounted to 2.6bn, but it made a pre-tax loss of 404.8m.
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Competitor Analysis
Princes Ltd
Company Structure
Princes Ltd is a subsidiary of Japans largest general trading company, the Mitsubishi Corporation. The company has over 200 bases of operation in approximately 80 countries worldwide. Princes Ltd claims to be the leading importer of canned foods into the UK and is also one of the UKs leading grocery brands in its own right. Princes also supplies several other leading food and drink brands, including Napolina, Shippams and Vier Diamanten in the canned foods sector. The company supplies both canned fish and canned fruit and claims that 72% of UK households buy its brand regularly, with its brand of canned tuna being the post popular.

In April 2010, the company began to manufacture canned ready meals for the first time. Its range includes: chicken in white wine sauce; mild chicken curry; hot chicken curry; chilli con carne; hot chilli con carne; vegetable curry; and Irish stew variants. It supported the launch via in-store promotions and public relations (PR) campaigns and it is hoping the move will consolidate Princes position as the leading canned meat brand (it accounts for 26% of the market). 2010 saw sales of Princes-brand canned fruit rise after an 8.8% decline in 2009. In July 2010, the company moved into the Eastern European market by entering into a partnership with ADM to attempt to increase the effectiveness and profits from manufacturing and distributing edible oils throughout Poland and Central Europe. In 2010, Princes re-launched its canned pies range, marketing them as improved recipes, alongside the new addition of canned ready meals. Around the same time, Fray Bentos, under Premier Foods, added a new Just Steak canned pie to emphasise the quality of its pies as competition in the sector grew.
Financial Results
In the 52-week period ending 31st March 2010, the company generated a turnover of 1.09bn and a pre-tax profit of 40.7m, compared with 2008/2009s turnover of 1.08bn and a pre-tax profit of 39.1m.
Tulip Ltd
Company Structure
Tulip Ltd was established in the UK in 2002 and is a subsidiary of Danish Crown, the largest pork producer in Europe and the biggest exporter of pork worldwide. The company employs around 9,000 members of staff in the UK and claims to be the UKs largest supplier of pork in the UK, providing a wide range of products to both the retail and foodservice markets. The companys brands in the canned foods market include Spam (produced under licence from Hormel Foods of the US), Stag (a brand of chilli con carne) and Plumrose (a range of canned meats).
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Competitor Analysis

The Chairman of Tulip Ltd, Carsten Jakobsen, who is also Vice Chief Executive Officer (CEO)/President of the Danish Crown Group, left Tulip Ltd and Danish Crown in November 2010. Tulip claims that Mr Jakobsen has been the driving force behind Tulips current prominent position among the UKs meat suppliers, where Tulip currently operates seventeen sites. According to Niels Mikkelsen, Chairman of Danish Crown, as reported by Meat, Fish & Dairy Processing Industry Latest News on TheMeatSite.com on 4th November 2010: Mr Jakobsen has been responsible for the growth we have witnessed in the UK in recent years. Also, his achievements as Chairman of our US operation, Plumrose Inc, have been invaluable. It is a very prominent figure in the global meat business that has now chosen to leave the Danish Crown Group, but Carsten has made sure that the next generation is in place to carry on his legacy."
Financial Results
In the 52-week period ending 4th October 2009, Tulip declared a turnover of 1.14bn and made a pre-tax profit of 83.6m. In the year ending 28th September 2008, the company had a turnover of 953.9m and a pre-tax profit of 21m.
Other Companies
Although the large companies dominate the UK canned food market, some smaller suppliers are also operating as niche companies, which do not usually have a diverse range and tend to concentrate on one main brand or foodstuff.
Simpson Ready Foods Ltd

Simpson Ready Foods Ltd began in 1911 as a Manchester-based family-owned business. Its canned foods sector supplies puddings (such as spotted dick and chocolate sponge), the Goblin value range (which includes Irish stew, beef casserole and minced beef and onions) and the Goblin ready meals range. The 52-week period ending 31st December 2009 saw the company report a turnover of 10.3m and a pre-tax profit of 146,000. In the previous year, the companys turnover was 13.2m and it made a pre-tax loss of 209,000.
OUTSIDE SUPPLIERS
The canned foods industry is dependent upon a wide range of suppliers. On one hand there are the farmers and fishermen who supply the basic raw food materials to be packaged, and on the other hand there are companies that supply the metal in which the products are packaged.
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Competitor Analysis
Other key suppliers include advertising and marketing agencies, distributors and logistical firms. Much of the food that eventually ends up in UK supermarkets originates from overseas, and therefore supply can be disrupted by the weather or global geopolitical and economic events. The canned foods market has been heavily influenced by global events in recent years. A soaring global demand for food, as well as rising prices for energy and fuel, have caused steep price increases in the canned fish sector in 2008 and 2009, for example. Moreover, although the price of some commodities has tumbled during the global economic downturn that began in 2008, the price of tin has remained high.
MARKETING ACTIVITY
Main Media Advertising
The amount spent on main media advertising varies greatly between the sectors of the market and the companies behind the products. For example, baked beans tend to have a large amount spent on promotional activity, especially by major players such as Heinz. Soup brands owned by various companies are also given a fairly high amount of financial backing. However, the canned fruit sector achieves very little promotional support. In the year ending September 2010, main media advertising expenditure on the leading canned foods brands amounted to 3.8m, considerably less (down by 28.4%) than 2009s 5.3m. Cost-cutting has become the main trend in terms of advertising expenditure, with firms hoping that brand loyalty alone will attract sufficient consumers. Heinzs spend on generic advertising increased exponentially in 2010, covering its entire range instead of specific products, assumingly as a further way to cut costs. This label is a large umbrella, encompassing some products that are not tinned, such as sauces and condiments, which are therefore not relevant to this report. For this reason, Key Note has not included it in the figures shown in Table 4.2. The canned vegetables and pasta category, which includes baked beans, sweetcorn and tomatoes, recorded the highest level of expenditure. It attracted a 2.2m spend in the year ending September 2009, with Heinz baked beans accounting for half of that (1.1m). In 2010, spending in this sector dropped to 1.3m the main reason for this was Heinz withdrawing its support for baked beans specifically and instead spending money on its generic campaign. In 2009, expenditure on the canned fish sector equalled 1.6m. Just over 1m of this was spent on John Wests new innovation No Drain tuna. In 2010, expenditure on canned fish fell to 766,000, with John Wests No-Drain tuna again accounting for a sizeable chunk of this spend (492,000). Princes did not invest in main media advertising in either 2009 or 2010.
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In the canned soup category, 811,000 was spent on advertising in 2008/2009, with the overwhelming majority being spent on Heinzs Farmers Market Soup (745,000). In 2010, once again Heinz shifted to generic advertising instead of focusing on specific products and Baxters took the companys place as the brand spending the most money on their soups (967,000, after spending nothing in 2009). Heinzs Farmers Market Soup attracted one of the highest levels of expenditure of all canned food products in 2009; it was beaten only by the amount spent on advertising its own baked beans and by John Wests marketing budget for its No Drain tuna. However, in 2010 it pulled advertising support for its soup range entirely. The canned meat and poultry sector attracted 645,000 worth of advertising expenditure in 2009; in 2010 this was down slightly to 578,000. Lastly, the canned fruit sector attracted the lowest amount of expenditure in both 2009 and 2010. 19,000 was spent on this sector in 2009, but there was a much larger amount of investment in this sector in 2010, at 56,000, possibly in an attempt to aid the sectors flagging sales figures. Del Monte, in particular, was keen to promote its products.
Table 4.2: Main Media Advertising Expenditure on Leading Canned Food Brands by Sector (000), Years Ending September 2009 and 2010
2009 Canned Vegetables and Pasta Heinz Baked beans Total Heinz Green Giant sweetcorn Napolina canned chopped tomatoes Sub-threshold brands Total canned vegetables and pasta Canned Fish John West No Drain tuna Generic Tinned tuna Total John West 1,012 266 207 1,485 492 492 1,130 1,130 947 137 2,214 1,120 106 36 1,262 2010
Table continues...
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Table 4.2: Main Media Advertising Expenditure on Leading Canned Food Brands by Sector (000), Years Ending September 2009 and 2010
...table continued
2009 Sub-threshold brands Total canned fish Canned Soup Heinz Farmers Market Total Heinz Baxters Canned soup range Healthy Choice soup range Luxury soup range Total Baxters Sub-threshold brands Total canned soup Canned Meat and Poultry Hormel Foods - Spam Spam Fritters Sub-threshold brands Total canned meat and poultry Canned Fruit Sub-threshold brands Total canned fruit Total
does not sum due to rounding at source
2010 274 766
80 1,565
745 745
66 811
454 241 272 967 136

1,102
428 207 10 645
230 284 64 578
19 19 5,254
56 56 3,764
Source: Nielsen Media Research
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Exhibitions and Trade Shows

BBC Good Food Show
This is held annually in November. In 2010, the show took place between 24th and 28th November in the National Exhibition Centre (NEC) in Birmingham.
Food and Drink Expo

The next event will be held between 25th and 28th March 2011, also at the NEC in Birmingham
International Food and Drink Exhibition

This biannual event is one of the largest food and drink exhibitions in the UK; it is due to be held next between 13th and 16th March 2011.
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Brand Strategy
5. Brand Strategy
INTRODUCTION
In certain sectors of the market, volume sales have continued to fall despite the current climate of austerity spawned by the recession and the methods the Government is taking to reduce the budget deficit. These methods are likely to lead to job losses in the public sector; although the Government hopes that an upswing in the private sector should compensate for this loss, it is likely that the general public has quite a period of belt-tightening ahead of them. The canned foods market has shown growth in value recently, mostly buoyed by the baked beans category, which is one of the few canned foods not to have recorded a drop in volume or value sales. A rise in the cost of raw materials has seen price increases across the canned foods sector, which has offset declining sales in terms of volume. New product development (NPD) has both helped and hindered the market in recent months the innovations that involve reducing fat, sugar and salt content from canned foods, as well as those making the products even easier to open and cook, have been beneficial, although NPD has also led to alternative packaging formats which threaten the cans dominance of the market. These alternative formats are resealable, which consumers appear to prefer for the sake of convenience. Alternative packaging is also generally lighter than canned foods and a cuboid shape allows for the maximisation of shelf space, meaning that more of the product can be fitted into a shipment compared with the cans cylindrical format.
RESEARCH FINDINGS
In January 2011, Key Note commissioned NEMS Market Research to conduct an exclusive consumer survey to ascertain consumers reasons for purchasing canned foods. The survey profiled 1,000 adults across the UK, aged 16 and over, and the results are detailed in Tables 5.1 to 5.5.
Convenience
More than half of the survey respondents (55.8%) stated that they purchased canned foods in the 12 months preceding the survey because of their convenience, and percentage penetration was exactly the same for men and women, suggesting that convenience was equally important to both. This was the most popular reason why consumers purchased canned foods.
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By age, 20 to 24 year-olds recorded the highest level of penetration; this age group typically includes many university students, who want quick and easy food to eat to maximise time for other activities such as studying or socialising. Convenience also ranks highly among 16 to 19 year-olds, who also fall into the student age group, while it was least important to those aged over 65, perhaps owing to the fact that this age group tends to be the least time-pressed. Convenience was most important to those in the C1 social grade and least important to Es, although once again this may be because this category is largely made up of the retired. Those who were not working were the most likely to purchase canned foods due to their convenience. Convenience was a fairly important reason to purchase canned foods across the entire country, but those in the South West were the most likely to do so for convenience, while those in the East Midlands were the least likely. Those with three people in their household were the most likely to purchase canned foods for the reason of convenience. Those with children in the house aged between 10 and 15 were the most likely to see canned foods as a convenient option.
Table 5.1: Purchasing of Canned Foods in the Past 12 Months Owing to Convenience by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
All adults Sex Male Female Age 16-19 20-24 25-34 35-44 45-54 55-64 65+ Social Grade A B C1 46.3 57.8 60.5 66.8 67.6 55.1 53.0 63.1 55.9 44.2 55.8 55.8 55.8
Table continues...
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...table continued
Social Grade (cont.) C2 D E Working Status Full time (30+ hours a week) Part time Not working (excluding retired/invalid) Not working (retired/invalid) Region North Yorkshire and Humberside East Midlands West Midlands East Anglia South East Greater London South West North West Wales Scotland Size of Household One Two Three Four Five or more 51.7 57.5 69.3 53.9 41.8 63.0 55.2 44.0 64.9 46.7 53.3 51.3 69.4 50.6 50.6 69.0 58.5 51.3 61.6 49.8 55.7 56.0 41.2
Table continues...
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...table continued
Presence of Children Aged 0-4 Aged 5-9 Aged 10-15 No children
e.g. full-time student, not looking for work, unemployed, etc.
58.6 40.0 63.6 55.3
Source: Key Note
Value
Only 5.7% of adults purchased canned foods because of their value; down from 7.4% when Key Note last conducted a similar survey in May 2009 (not shown). This is perhaps indicative of the recession ending. There was very little difference between men and women using canned foods due to their value (5.4% and 6%, respectively). Those aged 16 to 19 did not purchase canned foods due to their value perhaps this is because many in this demographic do not do the grocery shopping for the household while those aged 25 to 34 showed the highest level of penetration. No one in social grade A purchased canned foods for their value, whereas those in the C2 social grade were the most likely to purchase canned foods for this reason. Part-time workers showed the highest level of penetration for purchasing canned goods owing to their value, while penetration was lowest among full-time workers. Those in the North were the most likely to purchase canned foods for reasons of value, whereas those in the West Midlands were the least likely. Canned foods were most likely to be purchased for reasons of value by those with children aged between 0 and 4 in the house, with penetration tailing off as the age of the children increases and recorded as lowest among those with no children.
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Table 5.2: Purchasing of Canned Foods in the Past 12 Months Owing to Value by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
All adults Sex Male Female Age 16-19 20-24 25-34 35-44 45-54 55-64 65+ Social Grade A B C1 C2 D E Working Status Full time (30+ hours a week) Part time Not working (excluding retired/invalid) Not working (retired/invalid) Region North Yorkshire and Humberside East Midlands West Midlands East Anglia South East 12.6 10.8 8.0 1.4 1.9 6.0 4.0 9.3 6.2 6.1 0.0 5.7 4.9 8.6 5.8 1.0 0.0 5.4 7.4 6.0 5.9 4.9 6.5 5.4 6.0 5.7
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Table 5.2: Purchasing of Canned Foods in the Past 12 Months Owing to Value by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
...table continued
Region (cont.) Greater London South West North West Wales Scotland Size of Household One Two Three Four Five or more Presence of Children Aged 0-4 Aged 5-9 Aged 10-15 No children
1.8 4.5 7.6 11.3 2.7 5.0 5.3 6.8 9.0 1.9 8.2 7.4 6.5 5.0
Source: Key Note
Flavour
A slightly higher proportion of respondents stated that they had purchased canned foods in the last 12 months because of their flavour than their value, at 7.9% compared with 5.7%. However, this is down on the 12% who purchased canned foods for their flavour in 2009 (not shown). Slightly more men than women purchased canned foods for their flavour, but there was very little difference (8.4% and 7.5%, respectively). Again, due to the fact that they rarely do a grocery shop, none of those aged between 16 and 19 bought canned foods for their flavour; furthermore, none of the respondents aged 20 to 24 bought canned foods for their flavour either.
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No-one in social grade A bought canned foods for their flavour, owing perhaps to their affluence opening up more expensive, flavourful options to them, including fresh ingredients, while those in social grade E were the most likely. Those who were not working due to retirement or invalidity were also the most likely to buy canned foods for their flavour, as were those living in Wales. Those living in the South East were the least likely to purchase canned foods for their flavour. Penetration was highest among respondents with five or more people in the household, and among those with children aged 5 to 9 in the household. Those with children aged 10 to 15 were the least likely to purchase canned foods for their taste.
Table 5.3: Purchasing of Canned Foods in the Past 12 Months Owing to Flavour by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
All adults Sex Male Female Age 16-19 20-24 25-34 35-44 45-54 55-64 65+ Social Grade A B C1 C2 D E 0.0 7.7 7.8 7.4 8.3 11.0 0.0 0.0 11.4 7.9 8.0 8.3 10.8 8.4 7.5 7.9
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Working Status Full time (30+ hours a week) Part time Not working (excluding retired/invalid) Not working (retired/invalid) Region North Yorkshire and Humberside East Midlands West Midlands East Anglia South East Greater London South West North West Wales Scotland Size of Household One Two Three Four Five or more 8.6 8.3 3.1 10.2 11.9 12.6 12.9 11.6 5.5 8.1 2.0 8.0 2.1 12.0 14.1 6.4 9.3 9.0 0.4 10.9
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12.3 20.2 6.0 6.5
Source: Key Note
Health
Just 5.6% of the adults surveyed bought canned foods for their health properties, down from 6.7% in 2009. Women were more likely to purchase canned foods for their health properties than men, perhaps due to the fact that women tend to be more conscious about their health and weight than men. Again, those aged 16 to 19 are very unlikely to participate in a grocery shop, hence recording zero penetration, while those aged between 35 and 44 were the most likely to purchase canned foods because of their health properties. Those in the A social grade were the most likely to buy canned foods because of their health properties, despite having a larger disposable income to afford other options, including fresh produce, while C1s were the least likely. Penetration was highest among those who worked full time, while those who were not working (excluding retired/invalid) were the least likely to buy canned foods for their health properties. No-one in the North or the West Midlands bought canned foods for their health properties, whereas the highest penetration was recorded among those living in Greater London. Canned foods were most likely to be bought for their health properties by those with five or more people in the household, perhaps as an economical way to feed larger families their five-a-day, whereas those in single-occupant households were the least likely. Consumers with young children, aged 0 to 4, were the most likely to buy canned foods for their health properties, while those with older children (aged 10 to 15) were the least likely.
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Table 5.4: Purchasing of Canned Foods in the Past 12 Months Owing to Health Properties by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
All adults Sex Male Female Age 16-19 20-24 25-34 35-44 45-54 55-64 65+ Social Grade A B C1 C2 D E Working Status Full time (30+ hours a week) Part time Not working (excluding retired/invalid) Not working (retired/invalid) Region North Yorkshire and Humberside East Midlands West Midlands East Anglia South East 0.0 2.3 4.8 0.0 9.0 3.4 8.2 5.2 2.2 4.5 28.9 6.5 2.4 5.9 4.3 10.2 0.0 4.8 6.2 9.2 5.9 4.2 4.8 3.9 7.2 5.6
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Table 5.4: Purchasing of Canned Foods in the Past 12 Months Owing to Health Properties by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
...table continued
Region (cont.) Greater London South West North West Wales Scotland Size of Household One Two Three Four Five or more Presence of Children Aged 0-4 Aged 5-9 Aged 10-15 No children
11.2 2.3 7.8 9.0 5.9 2.8 4.1 7.4 5.8 11.4 10.3 9.1 4.6 5.2
Source: Key Note
Shelf Life
16% of adults bought canned foods because of their shelf life in 2011 the second-highest level of penetration recorded in the survey. This could be attributed to the fact that cans are seen as an easy way to store cupboard staples, and a long shelf life also serves to protect consumers from food-price inflation. Men were more likely than women to buy canned foods for their shelf life. Consumers aged between 16 and 19 were the most likely to buy canned foods for their shelf life, while a fairly high number of consumers aged 20 to 24, also part of the student demographic, also purchased canned foods for their shelf life. Consumers aged between 45 and 54 were the least likely to buy canned foods for their storability.
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Brand Strategy
Penetration levels were fairly similar across all social grades, although those in social grade E were the most likely to purchase canned foods owing to their shelf life and Ds were the least likely. There is very little difference in penetration between those working part time and those who did not work (excluding the retired/invalid). More than three in ten (30.4%) consumers from East Anglia purchased canned foods for their shelf life, whereas just 6.1% from the North did so. The size of consumers households made a noticeable amount of difference when it came to purchasing canned foods because of their shelf life; those with five or more people in their household were just under three times as likely to buy canned foods for their shelf life than those living with three people in the household. Respondents with no children were the most likely to purchase canned foods for their shelf life, whereas those with young children aged 0 to 4 were the least likely.
Table 5.5: Purchasing of Canned Foods in the Past 12 Months Owing to Shelf Life by Sex, Age, Social Grade, Working Status, Region, Size of Household and Presence of Children in the Household (% of respondents), 2011
All adults Sex Male Female Age 16-19 20-24 25-34 35-44 45-54 55-64 65+ Social Grade A B C1 C2 D E 18.0 16.8 16.0 14.0 12.9 23.0 24.9 15.6 18.9 16.9 9.3 12.7 17.2 18.9 13.3 16.0
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Working Status Full time (30+ hours a week) Part time Not working (excluding retired/invalid) Not working (retired/invalid) Region North Yorkshire and Humberside East Midlands West Midlands East Anglia South East Greater London South West North West Wales Scotland Size of Household One Two Three Four Five or more 17.2 16.8 9.4 12.3 27.1 6.1 9.3 27.3 15.6 30.4 27.0 15.3 11.1 8.0 9.3 11.5 11.7 23.7 22.1 14.4
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10.6 15.1 14.9 17.8
Source: Key Note
COMPANIES BRANDS
Vegetables
The Napolina brand of canned vegetables is the leading player in the canned vegetables sector. Owned by the Princes Group, Napolina has the largest range of branded products in the sector. However, own-label products have a much higher market share and take up the majority of the market. Heinz, of course, is the brand leader in several canned food categories and, thanks to its baked beans, it takes the top spot in the vegetables sector. The company accounts for more than 60% of all baked bean sales. New innovation such as snap pots and the fridge pack are helping Heinz to increase its lead on Branston, whose beans count for slightly less than 11% of sales.
Fish
The largest brand in the canned fish sector by far is John West, followed closely by Princes. These, along with other brands, account for around two-thirds of the canned fish sector. Many of the leading companies continue to promote the Omega-3 content of their products; there have been several new product developments (NPDs) with Omega-3-enriched claims John West launched new canned tuna steaks which claim to be enriched with three times as much Omega-3 than a normal can. Princes responded by releasing a product that claimed to have as much Omega-3 as John Wests enriched brand, but through natural means.
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Soup
Heinz is the leading soup brand just as it is the leading brand in the canned vegetables sector with its beans with its Classics range being its bestseller. Heinz also manufactures a number of soups with other brands, including Big Soup, WeightWatchers, Farmers Market and Taste of Home. In 2010, it released a range of soups that contained 25% less salt. One of its main rivals is Baxters, which produces brands such as Baxters Favourites, Baxters Vegetarian, Baxters Healthy, Baxters Chunky and Baxters Luxury. Another big player in this category is Campbell soups, which is owned by Premier Foods and is best known for its condensed range.
Meat
Princes is the brand leader in the canned meat sector. Other notable brands in this sector include Fray Bentos, which makes tinned pies and ready meals, and Ye Olde Oak, which cans ready meals such as Bolognese, chicken, chicken curries and hotdogs.
Fruit
Through it is own-label brands, which account for the majority of the market, Del Monte is the most prominent of the branded canned fruits, followed by Princes and John West.
Pasta
There are very few labels to consider in this sector other than Heinz the brand counts for around 75% of canned pasta sales. Despite attempting several NPDs over the years, Heinz has been unable to slow the long-term decline of the canned pasta sector.
Desserts
Heinz sold its chilled and frozen desserts arm in 2010 due to its financial struggles. This left its canned desserts range as its sole focus in terms of desserts in its canned products. Premier Foods is also a main player in this category, but the canned desserts sector overall appears to be in terminal decline thanks to the vast array of NPDs that include chilled and frozen desserts for home consumption; frozen desserts, in particular, have just as long a shelf life as their canned counterparts and there is more variety to choose from.
Cooking Sauces
Canned cooking sauces are another area of the canned foods market that is in a state of decline. The largest brands in the sector are Pataks and Homepride, but even these brands are using the canned format less and switching to other forms of packaging such as glass jars and bottles, or cartons and pouches.
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Strengths, Weaknesses, Opportunities and Threats
6. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS
Canning has been a well-known and proven method of preserving food for longer than living memory. Despite new product innovation in terms of other packaging, canned foods are a long-accepted component of the diets of UK consumers. There is an ever-growing trend towards convenience foods in the UK; cans offer this convenience and benefit from strong customer loyalty towards the format. Canned foods have a very long shelf life and can be stored at ambient temperature for months or even years; sales have therefore benefited as consumers concentrated on stocking up on cheap, store-cupboard staples during the recession. As canned foods are very likely to have been canned at a plant close to the particular foods production area, there is no loss of vitamins and minerals, which can occur with fresh produce both during transportation and when on display. In a similar vein, fresh food can often go to waste as it has a very short window for use when compared with canned foods. Canned foods do not generally generate much waste and are therefore a more viable and economical choice in a turbulent economic climate. Canned foods often offer the convenience of single portions, which fresh and even frozen foods do not always do. There is a very strong brand presence in the market; many well-known, strong brands are kept in the publics eye through heavy promotion from the owners. Canned food is cheaper than fresh produce, which is attractive to money-conscious consumers.
WEAKNESSES
Alternative forms of packaging are increasingly being developed which hold advantages over canned foods in terms of cost, space and the environment. Food that comes from a can is sometimes deemed less healthy than its fresh alternative, when this is not necessarily always the case.
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An increasingly health-conscious society is worried about issues such as the salt, sugar and fat content of products sometimes canned foods contain higher levels of sugar and salt, in particular, than fresh or frozen foods, because the ingredients have been added as part of the preservation process. Consumer research indicates that many members of the public believe canned foods do not offer the same taste as their fresh, chilled and frozen counterparts. The dominance of several major brands in the canned foods market makes product innovation or penetration by new companies very difficult. This undermines promotional activity and innovation.
OPPORTUNITIES
The price of canned foods is generally much lower than fresh and frozen products, a fact which can easily be exploited as money becomes tighter for the general public. The retention of nutritional quality in canned foods is a significant advantage of the canned format; however, producers, manufacturers and promoters are yet to fully exploit this fact. Canned foods are very convenient a number of manufacturers began to exploit this trend in 2010. For example, Princes has been promoting recipes by celebrity chef James Martin, which are made much easier and less complex by using canned products instead of fresh. There is room for further marketing on this point. Even premium and value-added canned products, which can be developed to meet consumer demand for products such as ready meals, are likely to be cheaper than other formats. Brazil, Russia, India and the Peoples Republic of China (PRC) are all rapidly developing and emerging economies with a growing desire for western canned foods, which should boost global sales, but is likely to lead to price hikes as demand rises. The use of Bisphenol A (BPA) in the lining of cans (see Threats, below) has attracted a lot of negative press in the past year or so and, as such, could put a number of people off purchasing canned foods. Companies that can innovate a way to can foods without using this chemical in the lining are likely to see a boost in sales if they promote the change properly, because it will boost consumer confidence in their brand and their packaging.
THREATS
Some canned foods across several sectors are skewed in terms of purchasing towards people in an older age bracket, which will affect sales in the longer term.
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Other packaging formats such as glass bottles and jars, pouches and cartons are growing in popularity and taking up an increasing share of many areas of the market where canned foods are dominant. Innovation which allows fresh and frozen products to stay at the peak of quality for longer is going to threaten the cans image as a long-life product. Many sectors are reliant on overseas producers and suppliers, which are often impacted heavily by the geopolitical climate and the global economy, as conveyed in Argentinas move away from farming beef cattle. There has been a lot of controversy of late regarding the use of Bisphenol A (BPA) in the canning of foods. It is currently a chemical used to coat the inside of cans to stop the cans corroding and to slow down spoilage in 80% of all cans containing food. There has been a lot of concern over the health risks of such a chemical, particularly in containers which hold baby food and baby formula. The chemical is also used in the manufacturing process of some bottles for babies. Various scientific authorities have discovered no health risk as a result of the use of BPA, but consumers are still concerned following negative press claiming that BPA could cause cancer and birth defects in children. This will negatively affect the canned foods industry, because many consumers will deem the packaging unsafe, despite authorities such as the USs Food and Drug Administration (FDA) and European Metal Packaging (EMPAC) claiming that levels of BPA in cans are well below the maximum levels allowed.
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Buying Behaviour
7. Buying Behaviour
CONSUMER PENETRATION
In quarter 4 2010 (July 2009 to June 2010), Kantar Media carried out a Target Group Index (TGI) survey which looked into the consumption of baked beans, soups (other than homemade), cooking sauces and baby food.
Baked Beans
Baked beans were eaten by a very large proportion of the population nearly nine out of ten (87.3%) had eaten beans in the 12 months preceding the survey. There was not much difference in penetration among the age groups, but the youngest range (those aged 25 to 34) were the least likely to have used beans in the past 12 months (83.1%), whereas those aged 55 to 64 had the highest level of penetration (91.4%).
Table 7.1: Penetration of Baked Beans in the Last 12 Months by Sex and Age (% of adults), 2010
All adults Sex Men Women Age 25-34 35-44 45-54 55-64 65+ Source: Target Group Index (TGI) Kantar Media, Quarter 4 (July 2009-June 2010) 2010 83.1 88.5 91.1 91.4 87.7 81.4 90.0 87.3
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Soup
Soup in cans and pouches was consumed by 71.5% of adults, up slightly from the findings of a similar survey conducted in March 2008 (not shown), when the figure stood at 70.8%. There is very little difference in the penetration of canned soups by sex, with 71.4% of men claiming usage and 71.7% of women using them. Consumption of soup was high across all age ranges, although it was lowest among those aged 15 to 19 and highest among 44 to 64 year-olds. In terms of social grade, once again the results were fairly uniform, with penetration dipping very slightly below seven out of ten adults only among the Bs. The highest penetration by social grade was recorded among those in C2 social grade (72.7%). The consumption of soup was the highest in Scotland, at 77.2%, perhaps due to the population experiencing one of the longest, coldest winters in the UK. The lowest penetration was recorded among those living in Greater London, where just 58% of adults had used canned and pouched soups in the 12 months prior to the survey.
Table 7.2: Penetration of Soup in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
All adults Sex Men Women Age 15-19 20-24 25-34 35-44 44-54 55-64 65+ Social Grade A B C1 C2 D E 72.5 69.7 71.7 72.7 72.3 71.2 64.9 66.1 68.7 72.2 74.2 74.2 74.0 71.4 71.7 71.5
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Table 7.2: Penetration of Soup in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
...table continued
Region Scotland North West North Yorkshire and Humberside East Midlands East Anglia South East Greater London South West Wales West Midlands
soup in cans and pouches
77.2 76.3 75.6 75.7 72.2 70.0 69.7 58.0 73.6 73.2 74.3
Source: Target Group Index (TGI) Kantar Media, Quarter 4 (July 2009-June 2010) 2010
Cooking Sauces
5.4% of the respondents used canned cooking sauces in the 12 months preceding the survey. In a similar survey conducted in the third quarter of 2006 (not shown), just 1.6% of adults had used this product. Once again, it is likely to be the nature of canned foods that has driven this increase; their long shelf life, combined with consumer desire to cook more meals at home as household budgets are tighter, means that cooking sauces in tins have become a more popular option. Despite the increase in penetration of canned cooking sauces, the real winner in the market has been pouched cooking sauces, which have increased their penetration from 1.3% in 2006 to 6.8% in 2010. This is a format that is posing the greatest threat to the canned cooking sauces market. Women are more likely to use canned cooking sauces than men, at 7.4% compared with 3.2%. The lowest penetration in terms of age was recorded among those aged 15 to 19, while the highest was recorded among those aged 35 to 44. Those in the A social grade had the lowest penetration for canned cooking sauces, while the highest penetration was recorded among the C2s and Es. Those in the South West were the most likely to use canned cooking sauces, with those in the North and Scotland the least likely.
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Table 7.3: Penetration of Canned Cooking Sauces in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
All adults Sex Men Women Age 15-19 20-24 25-34 35-44 44-54 55-64 65+ Social Grade A B C1 C2 D E Region Scotland North West North Yorkshire and Humberside East Midlands East Anglia South East 4.4 5.9 3.7 5.0 5.5 5.2 5.9 3.8 5.0 5.4 6.1 4.9 6.2 0.9 5.6 5.7 6.9 6.4 6.0 4.2 3.2 7.4 5.4
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Table 7.3: Penetration of Canned Cooking Sauces in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
...table continued
Region (cont.) Greater London South West Wales West Midlands
excluding pasta sauces
4.9 6.3 5.4 5.5
Source: Target Group Index (TGI) Kantar Media, Quarter 4 (July 2009-June 2010) 2010
Baby Foods
Only 0.8% of adults used a canned baby food in the 12 months ending June 2010. In the similar survey conducted for the year ending March 2008, 1.3% of adults stated that they had used a tinned baby food in the last 12 months. Statistically, there are more women than men who take care of infants, hence the difference in usage by gender. Those aged between 20 and 34 were the most likely to use canned baby food. Those in the A social grade were the least likely to use canned baby food, whereas the Es were the most likely to use it, perhaps because of the lower price when compared with other types. Those in Wales were the most likely to have used a canned baby food in the 12 months prior to the survey, while those in East Anglia were the least likely.
Table 7.4: Penetration of Canned Baby Food in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
All adults Sex Men Women 0.4 1.3 0.8
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Table 7.4: Penetration of Canned Baby Food in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2010
...table continued
Age 15-19 20-24 25-34 35-44 44-54 55-64 65+ Social Grade A B C1 C2 D E Region Scotland North West North Yorkshire and Humberside East Midlands East Anglia South East Greater London South West Wales West Midlands Source: Target Group Index (TGI) Kantar Media, Quarter 4 (July 2009-June 2010) 2010 0.5 0.7 1.2 0.6 0.9 0.3 0.9 0.8 0.8 1.5 1.2 0.2 0.5 0.7 0.8 1.3 1.8 0.7 2.4 2.3 0.9 0.3 0.2 0
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Current Issues
8. Current Issues
THE GLOBAL ECONOMY
The global economy affects the canned foods market in many ways. The economic downturn saw a general trend towards commodities losing their value, but the price of metals, including tin, have remained high. The price of metal for canning has therefore also increased, pushing up the cost of canned foods. Increases in the cost of food have also driven prices of canned foods up. However, despite being worth more as a market, canned foods are actually displaying very stagnant figures in terms of volume sales. While the economic crisis affected many of the worlds biggest economies, there was little effect felt in four of the fastest-growing economies in the world: Brazil, Russia, India and the Peoples Republic of China (PRC), known as the BRIC countries. These economies are expanding rapidly, as are their populations. This has a number of effects: as the population gains wealth, consumers have a higher disposable income to spend on food, moving away from traditional diets; a growing population requires more food, which these countries will start to import (canned or not), putting pressure on supplies, which in turn pushes the prices up; also, a growing population requires a larger amount of space to live in. Some countries are beginning to give up some land that was previously used for domestically grown crops to house the expanding population. They do not need to rely on this arable land as much anymore, because they can afford to import food from elsewhere, which further increases demand and, in turn, pushes up prices. The price of beef and beef-products (such as corned beef) increased by a fairly large amount in 2010 due to Argentinean cattle farmers switching to other methods of farming that are more profitable to them, instead of having to provide produce that is most beneficial to other countries. Finally, the recession-hit countries have been turning to canned foods as a cheaper alternative than other products, which boosted sales, with tinplate manufacturers commenting that the demand for tinned cans was on the rise purely for the purpose of canning food.
ENVIRONMENTAL ISSUES
The canned fish sector is affected by environmental issues and this is still likely to be the case in the future. The conservation and sustainable use of fish stocks has been greatly promoted recently and new rules, regulations and legislation mean that fishermen cannot catch as many fish as they did previously and cannot do so all year round. There have to be seasons for fishing to allow stocks to replenish themselves. This leads to a smaller quantity of fish which, in turn, can lead to higher prices.
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Current Issues
However, several companies, including Princes, are participating in the International Seafood Sustainability Foundation (ISSF), which encourages the sharing of catch-and-purchase data with regional fisheries management organisations in order to avoid selling bluefin tuna, one of the main species threatened with overfishing to the point of possible extinction, particularly in the Mediterranean. The ISSF also campaigns for stronger regulation when it comes to the bluefin tuna fishery. Companies, such as Princes, that support these rules tend to receive product logos in return, which ensure that their consumers know that the fish inside their cans came from sustainable, monitored stocks. This puts the brand name in a positive light. Less popular fish, including yellowfin and albacore tuna, skipjack and mackerel, have a healthy stock level, but consumers appear to be reluctant to turn to these lesser-known species. This puts bluefin tuna stocks under further pressure. The canned fish industry could do a great deal more to promote these other types of fish, thus preserving stocks of bluefin tuna. However, such a campaign would take time to work and would require a fairly substantial investment for what would be relatively little gain, so it is unlikely companies will choose this path. Instead, they must rely on the dwindling amount of bluefin tuna that is permitted to be caught each year which means that, as demand rises and supply falls, a more expensive product is on the shelves even taking into consideration that some of the costs are likely to be absorbed by the producers as a way of keeping shoppers from turning to own brands.
CARTONS VERSUS CANS

SIG Combibloc is a carton manufacturer that can claim 35 years of experience in the packaging market. It also manufactures and supplies filling systems. In recent times, the company has been switching its focus away from cans and moving towards the carton liquid food market. SIG believes that it is soups and broths, tomato-based products, baby food, cooking sauces and desserts are likely to contribute to the growth of the carton, concomitant with moves such as Sainsburys providing its chopped tomatoes in cartons not tins, and Covent Gardens carton soups being an ever-growing presence in the soup market. Yet cartons are still unable to steal the cans crown as the most trusted longer-life ambient packaging. As cans are sealed before the food is cooked, then heated, this process both sterilises the can and its contents and creates a vacuum. This is a packaging method that extends shelf life to over 2 years, according to Canned Food UKs Chairman Steve Thomas. It is not possible to heat-treat cartons this way because they are less robust than steel or aluminium packaging, meaning a seal on a carton is never as fully guaranteed as a can is, if the canning process is performed properly.
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Current Issues
Another issue in the debate is the ease with which consumers can open cans and cartons. An increasing number of canned foods are being packaged with ring-pulls as a way to improve the ease of opening without resorting to tools, which may be particularly beneficial to the elderly who may struggle with the actions required to use a tin opener. However, cartons remain easier to open; although they require scissors, there are no sharp edges left by them to pose potential danger. Furthermore, SIG recently launched a new design, introducing perforated cartons that allow users to rip off the entire top. These have just debuted in the UK for Tescos chopped tomatoes and ASDAs baked beans. However, one of the arguments for the benefits of the carton over the can is that there is less food waste created by them, but ripping off the entire top of a container leaves the food inside just as exposed as if it were in an open can. Steve Thomas further weighs into the debate by citing the faster fill rates achievable with cans; for example, it is possible to achieve a rate of over 1,000 cans a minute, whereas in the UK, carton fill rates are estimated at about 200 a minute, although higher rates are reached elsewhere. Thomas also champions the robustness of cans. On 6th December 2010, he was reported on Foodmanufacture.co.uk as saying that: Of all the packaging mediums, we regard cans as the most effective. The strength also allows them to be handled within the industry: from factory gate to shop shelf." The food supply chain is under pressure to reduce the energy used in the production of packaging and to reduce packaging waste. The Governments 2005 Courtauld Commitment was a voluntary agreement to reduce food and packaging waste, which originally concentrated on weight. The cartons relative low weight compared with cans appeared to be an ideal solution; lighter products mean a lower carbon footprint for the transportation of the products. Furthermore, the traditional cylindrical can does not tessellate, meaning that fewer cans can be packed into the same space as cartons. The environmental benefits of the carton are further trumpeted by SIG, which has set out a 5-year plan (running from 2010 to 2015) regarding its packaging solutions for the future. According to SIG, its cartons are made out of 75% wood fibre, a material that is completely carbon neutral and renewable. However, in March 2010, the Government introduced the Courtauld Commitment 2, which moved away from its predecessors focus on weight as the important environmental credential, and shifted towards achieving a more sustainable use of resources over the entire lifecycle of product packaging. This was beneficial to the canned foods industry, because both aluminium and steel can be recycled indefinitely without losing quality, whereas cartons have a finite amount of times they can be reused before they fall out of the recycling process and into landfill. There are very few local authorities that do not collect cans, whereas paperboard can be quite difficult to recycle, and a number of councils do not accept it for this reason.
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HEALTH ISSUES
Bisphenol A (BPA)
2010 and early 2011 saw much controversy in terms of the use of the chemical Bisphenol A (BPA), which is used to manufacture the epoxy resin that coats the inside of many cans containing food to slow down spoilage and prevent contaminants from the metal entering the food. It is also used to strengthen hard, clear plastics, such as that used to make bottles for babies. Studies have linked the chemical to a number of health issues. The chemical supposedly mimics the hormone oestrogen, causing endocrinological problems which, in turn, have been linked to a number of issues, including: breast cancer in women; low testosterone levels in men; liver damage; obesity; diabetes; other fertility problems; and endometriosis. Studies go so far as to label BPA as a feminising agent in baby boys. BPA researcher and obstetrician Hugh Taylor of Yale University advises pregnant women to avoid canned food, stating: "The entire life of that individual may be altered by a few months of BPA exposure in pregnancy. This is where the greatest risk lies." Despite a number of studies by government bodies (including the UKs Food Standards Agency [FSA] and the USs Food and Drug Administration [FDA]) publishing results that have deemed BPA levels in the coating of cans safe, this has done little to quell fears and 2010 saw the use of the chemical banned in Denmark, Canada, Connecticut, Minnesota and California. Although this ban was only on products aimed at children aged under 3, the safety of the chemical coming under such harsh scrutiny has left the public concerned over its use in the canned foods that they purchase. The issue will receive greater UK press in 2011, when EU states are set to outlaw the manufacture of polycarbonate feeding bottles containing the compound from March, and ban their import and sale from June. Again, although this ban is only aimed at products for children, such bad publicity for the chemical is likely to affect the canning industry, which is already seeing growth slowing as other forms of packaging rise in volume sales. However, there is definitely a market for manufacturers to eliminate the use of BPA in their packaging process, which would lead to a great boost in sales from health-conscious consumers if the chemicals absence from their products was promoted sufficiently.
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Current Issues
Sugar, Salt and Additives

In an increasingly health-conscious society, in which more and more information is being produced and published on healthy eating, the public is growing more concerned with the levels of additives in food, particularly sugars and salts. Mixtures high in sugar or salt can be used to preserve foods and, although they are not necessary in excessive quantities thanks to the cans success as a long-life packaging medium, they are still present in some canned foods in higher amounts than their fresh counterparts. For instance, fresh carrots have no sugar and salt in them unless these are added during cooking, whereas canned carrots will contain sugar and salt, even if only in trace amounts. However, canned fruits and vegetables are less expensive than their fresh counterparts and, therefore, families impacted by the aftermath of the recession may overlook the nutritional values of canned foods in favour of the lower price. There are claims that, although canned vegetables, in particular, may contain more salt and sugar than their fresh counterparts, as they are harvested and sealed in cans very quickly, this means that they have retained more of their vitamins and minerals than fresh vegetables, which may have lost some of their quality in the supply chain. Premier Foods reported strong growth in 2009 for its Loyd Grossman range of pasta sauces and, although the first half of 2010 showed a slow start, Premier Foods stated that it believes this is due to 2009s higher promotional activity for the brand compared with 2010. Pasta sauces in jars are growing in popularity as families turn their backs on canned pasta, which is decreasing in volume year-on-year. Owing to the increase in wheat prices which has affected durum wheat that is used to make pasta pasta in general has become more expensive, which has helped slow the fall in value sales. However, with pasta sauces in new formats and fresh pasta perceived to be healthier, more people are taking it upon themselves to produce relatively simple pasta dishes with sauce and dried pasta instead of opening tins.
Pregnant Women and Mercury

Owing to the contamination of the seas by industrial waste, there has been increasing scrutiny in recent years with regard to mercury levels in particular seafood, including tuna, and the effects this could have on pregnant women and the foetus they are carrying. In late 2010, the US FDA worked with the Environmental Protection Agency (EPA) to issue guidelines on the amount of particular breeds of fish pregnant women, children and women of childbearing age should eat because of mercury build up in the flesh. Mercury, a neurotoxin, has been linked to arrested development in children and damage to foetuses. Tuna, particularly white tuna, is on the list of fish pregnant women should avoid, according to the FDAs and EPAs joint findings and the subsequent report, due to the levels of mercury found in their flesh that cause a potential hazard. The childbearing age category for women is a particularly wide window, and to advise this demographic to strictly limit their intake altogether could cause possible damage to the fish industry, including that of canned fish.
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CONSUMER DEMAND
Canned Mackerel
Scotland is one of the EUs largest producers of mackerel, which is a big source of Omega-3. However, the majority of Scottish mackerel is exported to the Scandinavian countries, particularly Denmark. According to the International Fish Canners (IFCs) website, Aberdeen has the last remaining canned fish manufacturing plant in the UK, focussing on mackerel and sardines, but very little of this is destined for domestic consumption. Though eating mackerel is very common in Denmark, it is difficult to sell this fish in the UK. Instead, the market tends to be geared towards more expensive, imported fish, namely the fish that are most at risk of overfishing.
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The Global Market
9. The Global Market

TOTAL MARKET SIZE
There are no figures available for the total size of the global canned foods market, but tens of billions of cans of food are consumed around the world each year, ensuring that the market itself is worth billions of pounds. The recession appears to have a positive impact on sales; canned foods are a cheaper alternative to fresh or frozen foods and often cut waste. However, as the global economies recover, volume sales of canned foods may start to decline as consumers are increasingly able to afford the more expensive options again.
EUROPE
Sales of canned foods across Europe appear to be in decline due to the same reasons causing the fall in the UKs market namely that consumers are switching to alternative forms of packaging owing to convenience and practicality. However, the UK market has not seen such a switch and is generally more loyal to the canned format. Also, despite the influx of the carton and other packaging formats, canned foods still remain a staple part of diets across Europe.
THE US
The US is the worlds biggest market for canned foods. In 2008, the FDA cited that 17% of American peoples diets were made up of canned foods. The market for canned meats is particularly large in the US, led by the brand name Spam. New product innovation in terms of packaging seems to be intent on moving away from the can, which can have an old-fashioned image. Many technological advances have their origins in the US, so rebranding products in a new way and format, away from tradition, is likely to make them more popular.
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The Global Market
PEOPLES REPUBLIC OF CHINA

The Peoples Republic of China (PRC) is the worlds fastest-growing economy and, although canned foods have traditionally played a very small part in the populations diet until now, rapid urbanisation and industrialisation has meant a huge change in lifestyles and habits. An increasingly westernised diet is being adopted by the PRC, including an increased consumption of meat, which means demand for canned foods has soared, owing to the fact that cans provide a reliable way of preserving the new foods that are being introduced. A considerable proportion of the population does not yet have the fridges and freezers necessary to store other kinds of produce, but this is rapidly changing; soon white goods will become a much greater presence in Chinese homes, thus causing a switch in demand from canned foods to their fresh and frozen counterparts.
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Forecasts
10. Forecasts
INTRODUCTION
The majority of the sectors of the canned foods market recorded growth in value terms in 2010, but factors such as rising commodity costs (of both the foodstuffs and the metal to make the cans) have contributed to the increase in value terms, even as volume sales fall. The recession slowed the decline in overall volume sales, with canned foods being a cheaper way to provide staples in times of economic hardship, but the UK exited the recession in the last quarter of 2009. The value of the canned foods market is likely to rise in the future, with growth in most sectors. Commodity prices are rising as the UK comes into increasing competition in the food market from emerging economies such as Brazil, Russia, India and the Peoples Republic of China (PRC), which are all consuming extra as their wealth grows. Demand for commodities, including the foods as well as the fuel necessary to transport them, is likely to push costs up as these economies begin to be more serious competitors on a global level. Therefore, despite the brightening economic outlook possibly moving consumers towards more expensive alternatives, there are plenty of factors that ensure that the can will play a large part in the food market for at least the next 5 years, as it will remain a cheaper option than other types of food.
THE ECONOMY
The UK has only fairly recently emerged from the recession, which the National Institute of Economic and Social Research (NIESR) held to be the worse since the 1930s. However, by the end of 2009 the recession lifted, and the UKs economy slowly returned to growth along with many nations worldwide. It is expected to continue expanding in future years. Despite this, the economic crisis has left its mark and there are likely to be poor economic conditions for some time, even as the UKs gross domestic product (GDP) increases. The Governments predictions are that GDP will grow by 1.9% in 2011 and by 2.1% in 2012. There are several contradicting factors to consider when forecasting the UKs canned foods market: for example, economic growth could mean fewer people turning to canned foods as a cheap option, but on the other hand unemployment is expected to rise in 2011 and stay high during 2012, which may once again have a positive effect on the market. Public spending cuts, tax rises and inflation, which are likely to rise faster than wages, especially in 2011, are also likely to put strain on household finances, which again provides opportunities for the canned foods market in terms of volume growth. The tax burden on the population is also likely to increase due to the UKs fragile economic condition, including a large budget deficit.
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Forecasts
Table 10.1: Forecasts for the UK Economy (000, % and million), 2010-2014
2010 UK resident population (000) GDP growth (%) Inflation (%) Unemployment (million)
GDP gross domestic product at retail price index (RPI) actual number of claimants
2011 62,649 1.9 3.6 1.54
2012 63,074 2.1 2.7 1.54
2013 63,498 2.3 3.0 1.50
2014 63,921 2.4 3.2 1.43
62,222 1.6 4.4 1.52
Source: Population Projections Database (2008-based projections), National Statistics website/Forecasts for the UK Economy, November 2010, Treasury Independent Average Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland).
Demographics
The percentage of the population made up of the elderly is likely to increase in the future as living standards improve and healthcare becomes more advanced. A further 2 million people will reach the age of 85 or more in 2033 than in 2008. The ageing population is likely to drive demand for canned foods, as the format is familiar to the older age group. The number of those aged 60 or above is projected to reach 28.6% of the population by 2033, compared with 22% in 2008. Eurostat predicts that the UK will have the second-largest population in Europe by 2050, with 75.1 million people, surpassed only by Germanys projected population of 89.9 million. The increasing size of the population is likely to further drive all markets, including that of canned foods.
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Table 10.2: Projected UK Population by Age (million), 2008, 2013, 2018, 2023, 2028 and 2033
2008 Age 0-14 15-29 30-44 45-59 60-74 75-84 85+ All ages 10.8 12.3 13.0 11.8 8.8 3.4 1.3 61.4 11.0 12.7 12.5 12.7 9.4 3.7 1.5 63.5 11.5 12.3 12.8 13.2 10.0 4.0 1.8 65.6 11.9 12.1 13.8 12.6 10.5 4.8 2.2 67.9 11.9 12.3 14.2 12.2 11.4 5.2 2.6 69.8 12.0 12.8 13.8 12.5 11.9 5.3 3.3 71.6 2013 2018 2023 2028 2033
Source: Statistical Bulletin: 2008-based National population projections, National Statistics Crown copyright material is reproduced with the permission of the Controller of HMSO (and the Queens Printer for Scotland)
FORECASTS 2011 TO 2015

Some sectors of the canned foods market are likely to see growth in the years to 2015, which should keep the market quite buoyant, even as other sectors decrease in value. Key Note predicts fairly sustained growth in value terms in the future, driven partly by a rise in commodity prices and increased consumer demand from developing countries. High unemployment figures are also likely to provide a boost to the market in 2011. While Key Note predicts growth in 2015, the figures for this year indicate a slower growth rate than that forecast for the previous years, partly due to several sectors beginning a decline in value. This is likely to be as a result of a volume decline as consumers turn towards alternative types of packaging; this is especially true of cooking sauces and desserts cooking sauces are under threat from pouches and ambient tinned desserts are being usurped by frozen or fresh alternatives, which are currently experiencing a high rate of innovation. Canned vegetables are likely to show strong growth throughout the 5-year forecast period, mostly due to the popularity of products such as baked beans. However, even growth in this sector will taper off as 2015 approaches, not due to a lack of demand for baked beans but because other canned vegetables on the market are likely to be replaced by alternatives, which have been granted a longer shelf life through technological innovation.
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Forecasts
The canned fish sector is expected to grow rapidly in value to 2015, mostly due to increased pressure on supply and new rules and regulations regarding the amount that can be fished to prevent certain species becoming endangered. Although the rising cost of meat in general would indicate an increase in the value of the canned meat sector, Key Note is predicting a volume decline in the coming years due to the perception of canned meats as being old-fashioned, which will offset any value increases. Furthermore, a greater range of chilled pies is becoming available, a format that offers even greater convenience than canned pies and is likely to negatively affect the sector. The canned fruit sector appears to be in terminal decline as more consumers turn to fresh produce which, like fresh vegetables, are likely to be subject to innovations that extend shelf life, as in the canned desserts market. Although volume sales of pasta are likely to fall, the value of the sector is unlikely to decrease exponentially due to rising wheat prices as the worlds population grows and demand increases, which is driving up the cost of making the pasta.
Table 10.3: The Forecast Total UK Canned Foods Market by Sector by Value at Current Prices (m at rsp), 2011-2015
2011 Vegetables Fish Soup Meat Fruit Pasta Desserts Cooking sauces 795 570 465 340 135 127 78 17 2012 857 620 493 335 130 125 75 15 2013 922 676 520 330 125 125 70 12 2014 960 745 550 321 117 120 59 9 2015 995 788 580 311 109 118 42 6
Total % change year-on-year

2,527 5.4
2,650 4.9
2,780 4.9
2,881 3.6
2,949 2.4
Source: Key Note
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Figure 9.1: The Forecast Total UK Canned Foods Market by Value at Current Prices (m at rsp), 2011-2015
2,950 2,925 2,900 2,875 2,850 2,825 2,800 2,775 2,750 2,725 2,700 2,675 2,650 2,625 2,600 2,575 2,550 2011 2012 2013 2014 2015
Source: Key Note
MARKET GROWTH
Between 2006 and 2015, Key Note predicts that the canned foods market will increase in value by 50.8%, from 1.96bn to 2.95bn.
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Figure 9.2: Growth in the UK Canned Foods Market by Value at Current Prices (m at rsp), 2006-2015
2,900 2,800 2,700 2,600 2,500 2,400 2,300 2,200 2,100 2,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Key Note
FUTURE TRENDS
New Product Development
The major competitors for the can are other packaging formats, such as cartons, jars and pouches, which offer things that cans do not, including the fact that they can be used in the microwave. However, new innovation in the canned foods sector is currently underway and could possibly lead to a new design of can that is microwavable without danger. In early 2011, scientists in the UK announced the innovation of a type of plastic packaging that indicates when food is about to be spoiled, which they are hoping will cut the UKs large amount of wasted food. If consumers know that a product is about to expire thanks to this new packaging, the scientists theory is that the product can be used up before it expires completely and is wasted. Although there have been trials of an indicator that can be inserted into other types of packaging, they are expensive to produce this new product is actually part of the packaging which cuts the cost of the innovation. Cans have a very long shelf life until they are opened, which negates the need for this type of indicator, but once they are opened and stored there is no way of telling when they are about to expire. The very nature of cans does not allow them to use this indicative packaging, and so consumers might opt for this new technology to cut waste in an even more effective way than cans.
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Forecasts
New product developments (NPDs) are likely in the canned soup, vegetables and fish sectors, which, in addition to rising commodity prices and the continuing popularity of products in these sectors, is likely to aid value growth. Innovations such as products with reduced salt, sugar and additives are likely to be popular parts of this overhaul, as well as new items that will continue on from recent developments such as No Drain tuna and flavoured canned fish. However, the majority of NPDs in the market are likely to have a negative impact on canned foods; improved types of alternative packaging, for instance, are likely to damage sales.
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Company Profiles
11. Company Profiles

INTRODUCTION
The following section contains financial profiles of some of the principal companies identified as operating within the market sector discussed in this report. The financial results of some of the important names within the sector may not be reported if: their principal activities are so varied that their results are not considered applicable to the survey they are no longer trading as separate companies their financial data are very out of date.
DEFINITIONS
A company which has a Y consolidated value has filed consolidated accounts for the relevant year. denotes that the growth rate calculation is invalid, because the figures either move from positive to negative or from negative to positive.
Turnover (Sales)
This includes all income derived from the principal activities of the firm, net of VAT. It encompasses UK sales, exports and overseas and intercompany sales.
Pre-Tax Profit
The net trading profit figure after deduction of all operating expenses, including depreciation and finance charges but before deduction of tax, dividends, subventions or group relief, and other appropriations. Where applicable, it will include the share of profits and losses of associated companies. Items described by the company as exceptional are included; extraordinary items are excluded.
Profit Margin
Pre-tax profit expressed as a percentage of sales.
Average Remuneration
Total employee remuneration divided by the number of employees.
Sales per Employee

Sales divided by the number of employees.
FURTHER INFORMATION
For more detailed financial information telephone Key Note on: 0845-504 0452.
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Company Profiles
BAXTERS FOOD GROUP LTD

Registered Office Highfield House Fochabers Moray, IV32 7LD Telephone: 01343-820 393 SC023572 07/11/45 WA Baxter & Sons (Holdings) Ltd WA Baxter & Sons (Holdings) Ltd
Company Registration Number Date of Incorporation Holding Company Ultimate Holding Company
Previous Name(s) and Date(s) of Change

WA Baxter & Sons Ltd (21/12/06)
Principal Activities
A group engaged in the manufacture and supply of ambient, chilled and food products, including soups, savoury sauces, preserves, salad and meat accompaniments.
SIC Codes
15891, Manufacture of soups. 15870, Manufacture of condiments and seasonings. 15899, Manufacture of other food products not otherwise classified.
Structure
Baxters was founded as a family-run firm in 1868 and still remains in the Baxters family Audrey Baxter, the great granddaughter of founder George Baxter is the Chief Executive (CE) of the company.
Brand Information
Deli Inspired Soups, Favourites, Healthy Choice, Healthy Choice Chunky, Luxury and Vegetarian are among Baxters ranges of soups. Its Favourites brand is the second best-selling brand in the canned soup sector, after Heinzs Classic range.
Recent Developments
According to Nielsen Media Research (NMR), Baxters became the most-advertised canned soup range in the year ending September 2010. Its 967,000 advertising campaign included a product rebrand and new and improved flavours. Its canned Deli Inspired soup range, launched in 2008, sparked the Deli Inspired lunch bowls in 2010.
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FINANCIAL PROFILE
Year End Weeks Consolidated 30/05/09 52 Y 31/05/08 52 Y 02/06/07 53 Y 27/05/06 54 Y
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 123,981 6.55 39,483 31.85 116,360 2.12 32,609 28.02 113,942 3.56 22,326 19.59 110,021 21,030 19.11
Profits
Pre-Tax Profit (000) % change year-on-year Profit Margin (%) Operating Profit (000) 5,031 4.06 6,880 232 -96.53 0.20 592 6,695 3.45 5.88 7,504 6,472 5.88 7,043
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 997 20,102 124,354 5,046 89,627 1,047 18,890 111,137 222 86,818 1,041 17,682 107,389 6,310 89,496 1,035 19,278 102,363 6,022 55,432
Balance Sheet/Ratios
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 89,358 5.63 43,147 1.59 0.64 90,898 0.26 44,730 1.70 0.77 93,165 7.05 45,300 1.85 0.83 57,372 10.86 34,024 1.66 0.96
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Company Profiles
DEL MONTE (UK) LTD

Registered Office 240 London Road, Staines, Middlesex, TW18 4JD Telephone: 01977-649 333 02416083 23/08/89 Del Monte BV (Netherlands) Fresh Del Monte Produce Inc (US)

Del Monte Fresh Produce (UK) Ltd (31/10/08) Del Monte Fresh Produce (UK Holdings) Ltd (30/06/95) PPI Del Monte Fresh Produce (Holdings) Ltd (29/01/93) PPI Del Monte Produce (Holdings) Ltd (05/11/91) Legibus 1437 Ltd (09/10/89)
Banana ripeners as well as importers, pre-packers, distributors, sellers of fruit and producer of prepared fruit, salad and dips.
SIC Code
51310, Wholesale of fruit and vegetables.
Structure
Del Monte (UK) Ltd is a supplier of fruit- and vegetable-based products. It holds approximately a quarter of the market in terms of value. The ultimate holding company is Fresh Del Monte Produce Inc, which is based in the Cayman Islands.
Brand Information
Del Monte is the leading brand in the canned fruit sector, both in the UK and worldwide.
Recent Developments
July 2010 saw Del Monte agreeing to cut the salt content by up to 20% in its canned vegetable products. The company also came to a deal with Tesco, which allows the supermarket to exclusively distribute Del Montes new Fruitini lunchbox mini bags.
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FINANCIAL PROFILE
Year End Weeks Consolidated 01/01/10 53 N 26/12/08 52 N 28/12/07 52 N 29/12/06 52 N
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 140,050 24.52 112,469 -24.10 148,171 -9.19 163,162 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 2,928 2.09 2,901 -1,259 -1.12 -1,266 6,186 4.17 6,175 -678 -0.42 -688
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 559 21,058 245,810 5,139 60,562 692 21,478 162,527 -1,819 46,332 750 17,171 197,561 8,248 43,045 901 17,849 181,090 -752 28,966
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 33,854 8.49 31,476 2.10 1.83 32,062 -3.93 28,632 2.13 1.91 32,284 19.16 29,464 1.81 1.59 26,098 -2.60 22,851 1.30 1.08
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Company Profiles
GLENRYCK FOODS LTD

Registered Office 10 Station Road, Henley-On-Thames, Oxfordshire, RG9 1AY Telephone: 01491-578 123 Fax: 01491-573 649 01500044 05/06/80 Oceana Group Ltd (South Africa) Oceana Group Ltd (South Africa)

Glenryck (UK) Ltd (13/03/01) Womelk Ltd (31/12/80)
The import and distribution of fish products.
SIC Code
51380, Wholesale of other food including fish, crustaceans and molluscs.
Structure
Oceana Group Ltd, one of the largest conglomerates in South Africa, has owned Glenryck foods since 2004. The company produces both Gelnryck-branded fish as well as own-label salmon and tuna products.
Brand Information
Glenryck recently added new products to its range, including Alaskan sockeye red and pink salmon varieties. It has also recently created own-brand sardines in both tomato sauce and sunflower oil.
Recent Developments
Glenryck has tried to make the can even more convenient by innovating a new design with an easy-open ring-pull. It has also further capitalised on its sustainable tuna, fished from the Maldives, in order to promote its environmentally friendly image.
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FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 15,917 -28.60 22,294 12.22 19,867 3.31 1,987 10.00 19,231 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) -438 -2.75 -368 1,167 61.63 5.23 1,271 722 -24.87 3.63 795 961 5.00 1,010
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 13 58,566 1,201,283 -33,057 247,462 13 54,415 1,682,566 88,075 284,462 13 43,692 1,528,231 55,538 280,846 13 45,647 1,508,314 75,373 277,769
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 3,217 -13.36 3,108 1.90 0.68 3,698 30.96 3,576 1.54 0.54 3,651 19.78 3,517 2.01 1.01 3,611 27.13 3,461 1.92 1.00
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GONDOLA GROUP LTD

Registered Office Company Registration Number Date of Incorporation Holding Company Ultimate Holding Company 5th Floor 2 Balcombe Street, London, NW1 6NW 05953163 02/10/06 Gondola Investments Ltd Partnership Inc Cinven Ltd

Paternoster Topco Ltd (15/01/07)
A group engaged in the operation of restaurants.
SIC Code
55301, Licensed restaurants.
Structure
The Gondola Group owns many high-street restaurant chains, including Zizzi, ASK and PizzaExpress. The group serves approximately 42 million meals a year out of its various outlets.
Brand Information
The company re-launched its passata sauce, the tomato-based topping it uses on its PizzaExpress pizzas, in canned format instead of glass jars. The company has unveiled a new pasta sauce range under the Pizza Express portfolio as an extension of its passata sauce and salad dressing ranges.
Recent Developments
At the same time as re-branding its cooking sauce into the canned format, the company also publicised the fact that the sauce could be used as a base for Italian dishes, such as Bolognese.
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FINANCIAL PROFILE
Year End Weeks Consolidated 28/06/09 52 Y 29/06/08 52 Y 01/07/07 27 Y
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 509,300 10.31 461,700 202.06 228,500 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) -52,400 -10.29 45,700 -52,300 -11.33 44,500 -35,000 -15.32 12,600
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 13,307 12,009 38,273 -3,938 67,551 12,636 12,567 36,538 -4,139 71,312 11,939 11,518 36,860 -5,646 76,062
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 898,900 -5.83 -772,000 0.96 0.83 901,100 -5.80 -754,000 0.87 0.75 908,100 -7.42 -734,300 0.79 0.71
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Company Profiles
HJ HEINZ COMPANY LTD

Registered Office South Building Hayes Park Hayes Middlesex, UB4 8AL Telephone: 020-8573 7757 00147624 01/06/17 Heinz Europe Unlimited HJ Heinz Company (US)

HJ Heinz Company Ltd (23/02/01)
The development, marketing, manufacture, sale and distribution of processed food products.
SIC Codes
15330, Processing and preserving of fruit and vegetables not elsewhere classified. 15891, Manufacture of soups. 15870, Manufacture of condiments and seasonings.
Structure
The ultimate holding company for HJ Heinz Company Ltd is the US-based HJ Heinz Company, a global corporation that supplies goods to more than 200 countries.
Brand Information
Heinz manufactures a range of canned foods, including soup, baked beans and pasta. It also supplies other products, such as: baby food; WeightWatchers products; cakes, cereals and snacks; canned and microwaveable beans; chilled and frozen desserts and dairy products; Linda McCartney meals; fruit products; frozen ready meals; salads, salad dressings and vinegar; sandwich fillers; spreads and pickles; sandwhiches; sauces and tomato products; and soya.
Recent Developments
Heinzs tomato soup celebrated its 100th birthday in 2010 with a new limited-edition packaging, cashing in on the age of the company as a measure of quality and trustworthiness. The company also released the Fridge Pack of baked beans a plastic, resealable tub of beans that Heinz believes will offer greater convenience than its canned variant.
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FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 734,400 8.69 23,700 3.23 675,700 10.68 610,500 6.97 570,700 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 145,700 -5.20 22.75 138,200 153,700 8.24 23.26 128,600 142,000 14.33 21.76 127,800 124,200 19.81 90,800
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 2,102 51,901 333,679 75,901 120,494 2,025 47,629 308,022 71,645 172,452 1,982 48,269 256,967 55,923 91,372 2,179 40,726 252,944 50,111 61,178
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JOHN WEST FOODS LTD

Registered Office Lancaster House Mercury Court Tithebarn Street, Liverpool,L2 2GA Telephone: 01512-436 200 Fax: 01512-365 465 00200767 01/10/24 UK Seafood Investment Ltd European Seafood Investments 1 Sarl
Company Registration Number Date of Incorporation Holding Company Ultimate Holding Company (Domestic)

None
The purchase, marketing and sale of food for human consumption.
SIC Code
51390, Non-specialised wholesale of food, beverages and tobacco.
Structure
John West Foods Ltd is a name that was established in 1888 by two Liverpool-based merchants: TL Pelling and CH Stanley, named after the Scotsman John West, who emigrated to the US in 1868 and started his first cannery in Oregon. The company has been owned by MW Brands since 2006.
Brand Information
John West holds approximately a third of the canned fish sector by market value. Its products include: canned tuna and salmon; Light Lunch; No Drain tuna; Something Extra; Mackerel; Sardines; Omega 3; Herrings and Kippers; Brisling and Slid; Speciality Fish and Shellfish; and the Reserve range. It also has the rights to distribute WeightWatchers-branded sandwich fillings.
Recent Developments
John West launched an advertising campaign in 2010 using celebrity chef James Martin to promote recipes that could be quickly and easily prepared with its product range. 2010 also saw the launch of pre-grilled canned sardines and pre-mixed sandwich fillings.
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Company Profiles
FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 171,537 3.66 28,544 16.64 165,482 -3.44 25,626 15.49 171,382 20.18 25,906 15.12 142,601 15,293 10.72
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 35,576 20.74 3,695 1,303 0.79 2,713 -3,023 -1.76 -984 5,402 3.79 5,048
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 67 48,433 2,560,254 530,985 1,086,015 70 48,814 2,364,029 18,614 543,514 76 46,158 2,555,026 -39,776 488,895 68 42,632 2,097,074 79,441 577,706
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 72,763 48.89 72,763 5.06 3.35 38,046 3.42 38,046 1.21 0.64 37,156 -8.14 37,156 1.27 0.79 39,284 13.75 39,284 1.35 0.56
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Company Profiles
PETTY, WOOD & CO LTD

Registered Office Livingstone Road, Andover, Hampshire, SP10 5LA Telephone: 01264-345 500 00082419 28/10/04 Seckloe 323 Ltd Brands of Distinction Ltd

Petty Wood & Company Ltd (31/12/79)
The provision of sales, marketing and distribution services on behalf of manufacturers of food, drink, non-food gift brands.
SIC Codes
51390, Non-specialised wholesale of food, beverages and tobacco. 51479, Wholesale of other household goods not elsewhere classified.
Structure
Petty, Wood & Co Ltd was established in 1816 and provides sales, marketing and distribution services for premium foods and drink brands in the UK and the Republic of Ireland food retail, wholesale and foodservice sectors. In August 2007, the company was sold to a Halifax, Bank of Scotland-backed management team.
Brand Information
The company holds the rights to distribute the Prince of Wales Duchy Range. The companys main interest, however, is in the canned foods market with its Epicure range, which covers fish, vegetables, fruit and meat.
Recent Developments
The company recently forged an exclusive deal with the Waitrose supermarket chain. The company supplies Waitrose with the Prince of Wales Duchy range and has given Waitrose the exclusive right to sell it.
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FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 43,644 -6.85 3,519 8.06 46,855 32.36 3,906 8.34 35,400 -2.15 2,755 7.78 36,178 2,312 6.39
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 1,563 23.75 3.58 1,539 1,263 70.22 2.70 1,210 742 -35.76 2.10 688 1,155 3.19 1,072
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 101 29,832 423,966 15,183 47,010 104 27,731 360,423 9,715 38,885 112 26,214 316,071 6,625 34,911 111 27,811 325,928 10,405 38,676
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Company Profiles
PREMIER FOODS PLC

Registered Office Premier House Centrium Business Park Griffiths Way St Albans Hertfordshire, AL1 2RE Telephone: 01727-815 850 05160050 22/06/2004 None None

Premier Brands Foods PLC (02/07/04)
A group engaged in the manufacture and marketing of ambient grocery products for major multiple retailers, cash and carry and convenience stores and foodservice operators.
SIC Codes
15330, Processing and preserving of fruit and vegetables not elsewhere classified. 15870, Manufacture of condiments and seasonings. 15519, Manufacture of other milk products. 15810, Manufacture of bread; manufacture of fresh pastry goods and cakes. 15899, Manufacture of other food products not elsewhere classified. 51380, Wholesale of other food including fish, crustaceans and molluscs.
Structure
Premier Foods was formed by the US-based private-equity firm Hicks, Muse, Tate & Furst following the companys purchase of Hillsdown Holdings PLC for 822m in 1999. In 2007, Premier Foods completed the acquisition of the UK food giant RHM, giving it ownership of well-known food brands such as Hovis, Sharwood and Bisto.
Brand Information
In its canned foods sector, Premiers main brands include Branston and Fray Bentos. The company claims that more than 90% of UK households have a Premier Foods product in their home.
Recent Developments
Premier Foods added a Just Steak canned pie to its Fray Bentos brand around the same time as Princes relaunched its canned pie range with what they described as an improved, crustier top. The company is also currently undergoing a financial overhaul in an attempt to take control of its net debt.
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Company Profiles
FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 2,661,000 2.20 162,700 6.11 2,603,600 22.51 170,100 6.53 2,125,200 152.79 133,600 6.29 840,700 54,000 6.42
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 46,700 1.75 176,500 -404,800 -15.55 -41,400 -77,600 -3.65 72,000 59,000 7.02 100,500
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 16,099 28,244 165,290 2,901 175,837 15,913 26,972 163,615 -25,438 190,002 17,937 21,525 118,481 -4,326 186,224 5,114 22,781 164,392 11,537 214,314
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 2,830,800 1.65 -1,414,900 0.67 0.43 3,023,500 -13.39 -1,539,100 0.71 0.49 3,340,300 -2.32 -1,427,100 0.80 0.52 1,096,000 5.38 -408,800 0.92 0.55
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Company Profiles
PRINCES LTD
Registered Office Company Registration Number Date of Incorporation Holding Company Ultimate Holding Company Royal Liver Building Pier Head Liverpool, L3 1NX 02328824 15/12/88 Mitsubishi Corp (Japan) Mitsubishi Corp (Japan)

Princes Holding Ltd (12/10/89) Mitopen Ltd (08/03/89)
A group engaged in the import, manufacture and distribution of food and drink products to the grocery trade.
SIC Codes
51390, Non-specialised wholesale of food, beverages and tobacco. 15209, Other fish processing and preserving. 15980, Production of mineral waters and soft drinks.
Structure
Princes Ltd is owned by Japans largest general trading company, the Mitsubishi Corporation, a global company with more than 200 bases of operation in approximately 80 countries worldwide. As part of the Princes Food and Drink Group, the company supplies mainland Europe and has around 3,300 employees worldwide.
Brand Information
Princes is a main supplier to several other leading food and drink brands, including Napolina, Shippams and Vier Diamanten in the canned foods sector.
Recent Developments
In the second quarter of 2010, the company began to manufacture and market a range of canned ready meals for the first time, including chicken in a white wine sauce, chilli con carne, vegetable curry and Irish stew. It followed up this foray into the canned meat category with a new and improved canned pies range. The company also teamed up with ADM to move into the Eastern European market and is now producing edible oils for sale across Poland.
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Company Profiles
FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 1,093,217 1.13 160,547 14.69 1,081,003 14.22 197,240 18.25 946,392 -14.78 171,283 18.10 1,110,540 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 40,663 4.04 3.72 40,401 39,085 2.95 3.62 36,958 37,966 -5.52 4.01 34,817 40,185 3.62 34,145
Employees
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Company Profiles
SIMPSON READY FOODS LTD

Registered Office Link House Stretford Road Urmston Manchester Lancashire, M41 9WH 00114121 08/02/1911 None None

None
The manufacture and supply of prepared foods.
SIC Codes
15899, Manufacture of other food products not elsewhere classified. 15820, Manufacture of rusks and biscuits; manufacture of preserved pastry goods and cakes.
Structure
Simpson Ready Foods Ltd was founded in Manchester in 1911 as a family-owned business. Simpsons is still a family-run business, led by two third-generation Simpsons, brothers William and Andrew.
Brand Information
Its canned products include desserts such as spotted dick and chocolate sponge, as well as the canned Irish stew ready meal, manufactured under the Goblin name.
Recent Developments
In recent decades it has expanded into new packaging formats away from cans, enabling it to develop a broad range of own-brand and private-label products, but still insists that its canned products are a valuable part of its business.
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Company Profiles
FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 10,328 -21.73 99 0.96 13,196 146 1.11 -
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 146 1.41 180 -209 -1.58 -441 -95 -29 -124 -79
Employees
Number of Employees Average Employee Remuneration () Sales per Employee () Profit per Employee () Capital Employed per Employee () 104 25,173 99,038 1,404 23,683 124 27,637 106,419 -1,685 19,145 153 19,444 -621 17,190 126 18,087 -984 21,865
Capital Employed (000) Return on Capital (%) Net Worth (000) Current Ratio Liquidity Ratio 2,463 5.93 2,432 1.07 0.70 2,374 -8.80 2,279 0.95 0.65 2,630 -3.61 2,423 0.99 0.66 2,755 -4.50 2,462 1.01 0.71
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Company Profiles
TULIP LTD
Registered Office Seton House Warwick Technology Park Gallows Warwick, CV34 6DA Telephone: 01842-851 600 00608077 16/07/58 Tulip International (UK) Ltd Danish Crown AmbA (Denmark)

Tulip International (UK) Bacon Division Ltd (07/10/02) Ess-Food Danepak Ltd (19/11/90) Danepak Ltd (30/12/83)
The processing, packing, distribution and sale of meat products.
SIC Code
15131, Bacon and ham production.
Structure
Tulip was established in the UK in 2002. It is a subsidiary of Danish Crown, the largest pork producer in Europe and the biggest pork exporter in the world. Tulip currently has 4 sites in the UK and employs around 9,000 members of staff.
Brand Information
The companys brands in the canned foods market include Spam (produced under licence from Hormel Foods of the US), Stag (a brand of chilli con carne) and Plumrose (a range of canned meats).
Recent Developments
The company sources its pigs from British farms, appealing to those who want to buy British food to support local farmers.
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Company Profiles
FINANCIAL PROFILE
Sales
Sales (000) % change year-on-year Exports (000) Exports/Sales (%) 1,138,945 19.40 35,952 3.16 953,899 1.51 26,739 2.80 939,681 -1.30 20,767 2.21 952,039 26,795 2.81
Profits
Pre-Tax Profits (000) % change year-on-year Profit Margin (%) Operating Profit (000) 83,559 298.85 7.34 37,748 20,950 12.10 2.20 33,834 18,689 -0.22 1.99 30,129 18,730 1.97 29,055
Employees
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Company Financials
12. Company Financials

The following companies, listed in alphabetical order, are taken from the myICC database. ICCs links with Companies House mean that when the latest accounts for a company are made available, they can be incorporated on our database and be ready for inclusion in Key Note Market Report Plus. A short delay occurs at Companies House between receipt of documents and their public release. As this delay can be longer, the availability of accounts can sometimes be affected. It should be noted that the financial results for certain companies are not restricted to sales of the products covered by this report.
Turnover (000) Company AB World Foods Ltd RH Amar & Co Ltd Anchor Seafoods Ltd Baxters Food Group Ltd Del Monte (UK) Ltd Enco Products Ltd Glenryck Foods Ltd Gondola Group Ltd HJ Heinz Company Ltd Heley International Ltd HL Foods Ltd International Fish Canners (Scotland) Ltd John & Pascalis Ltd John West Foods Ltd Lovering Foods Ltd Martin Mathew & Co Ltd Mediterranean Growers Ltd Natco Foods Ltd Nestl UK Ltd Northern Foods PLC 124,631 35,525 94,349 123,981 140,050 24,891 15,917 509,300 734,400 20,376 529,881 12,516 13,156 171,537 26,403 25,426 55,527 1,451,200 977,000
Pre-Tax Profit (000) 3,905 535 6,751 5,031 2,928 65 -438 -52,400 145,700 108 16,993 -44 170 35,576 -4,849 803 72 794 74,000 7,400
Year End 12/09/09 30/09/09 31/12/09 30/05/09 01/01/10 31/12/08 30/09/09 28/06/09 29/04/09 31/12/09 31/12/09 31/03/10 31/12/09 31/03/10 27/03/10 30/09/09 30/06/10 31/12/09 31/12/09 03/04/10
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Company Financials
Turnover (000) Company (cont.) Petty, Wood & Co Ltd Premier Foods PLC Princes Ltd Sco-Fro Group Ltd Simpson Ready Foods Ltd S&B Herba Foods Ltd Tulip Ltd Unilever Bestfoods UK Ltd Wanis Ltd Westler Foods Ltd VA Whitley & Co Ltd Ye Olde Oak Foods Ltd 43,644 2,661,000 1,093,217 22,728 10,328 94,914 1,138,945 142,788 43,020 16,364 17,786 40,501
Pre-Tax Profit (000) 1,563 46,700 40,663 352 146 8,927 83,559 15,530 478 -31 310 85
Year End 02/04/10 31/12/09 31/03/10 30/04/10 31/12/09 31/12/09 04/10/09 31/12/09 30/06/09 30/11/09 30/11/09 31/12/09
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Further Sources
13. Further Sources

Associations
The Association of European Producers of Steel for Packaging Avenue Ariane 5 Building Integrale E3 4th floor BE-1200 Brussels Belgium Telephone: 0032-253 791 51 Fax: 0032-253 786 49 E-mail: info@apeal.be http://www.apeal.org Canned Food UK PO Box 145 Birmingham, B24 8WR Telephone: 0800-243 364 E-mail: info@cannedfood.co.uk http://www.cannedfood.co.uk The Food Processors Association C/o Food and Drink Federation 6 Catherine Street London, WC2B 5JJ Telephone: 020-7420 7106 Fax: 020-7836 0580 http://www.fdf.org.uk The Metal Packaging Manufacturers Association The Stables Tintagel Farm Sandhurst Road Wokingham Berkshire, RG40 3JD Telephone: 01189-788 433 http://www.mpma.org.uk
Publications
Foodmanufacture.co.uk The Grocer William Reed Business Media Broadfield Park Crawley, RH11 9RT http://www.foodmanufacture.co.uk The Can and Aerosol News Impress Australasia 169 Burwood Road Hawthorn Victoria, 3122 Australia http://www.can-news.com.au The Grocery Trader Grandflame Ltd Unit 12, Flame House 12 King Park Kings Langley Hertfordshire, WD4 8ST http://grocerytrader.co.uk
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Further Sources
General Sources
Dun & Bradstreet Marlow International Parkway Marlow Buckinghamshire, SL7 1AJ http://www.dnb.co.uk Kantar Media Ealing Gateway 26-30 Uxbridge Road Ealing London, W5 2BP Telephone: 020-8433 4000 Fax: 020-8433 4001 http://www.kantarmedia.com NEMS Market Research 22-23 Manor Way Belasis Hall Technology Park Billingham, TS23 4HN Telephone: 01642-373 355 Fax: 01642-373 350 http://www.nemsmr.co.uk Nielsen Media Research Atrium Court The Ring Bracknell Berkshire, RG12 1BZ Telephone: 01344-469 100 Fax: 01344-469 102 E-mail: mediacommunicationuk @nielsen.com http://www.nielsenmedia.co.uk
Government Publications
Department of Health Richmond House 79 Whitehall London, SW1A 2NS http://www.dh.gov.uk Food Standards Agency Aviation House 125 Kingsway London, WC2B 6NH Telephone: 020-7276 8000 http://www.food.gov.uk Government Actuarys Department Finlaison House 15-17 Furnival Street London, EC4A 1AB Telephone: 020-7211 2601 E-mail: enquiries@gad.gov.uk http://www.gad.gov.uk
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Further Sources
HM Treasury 1 Horse Guards Road London, SW1A 2HQ Telephone: 020-7270 4558 Fax: 020-7270 4861 http://www.hm-treasury.gov.uk Forecasts for the UK Economy Treasury Independent Average
National Statistics 1 Myddelton Street London, EC1R 1UW Telephone: 0845-601 3034 Fax: 01633-652 747 E-mail: info@statistics.gov.uk http://www.statistics.gov.uk
Other Sources
Environmental Protection Agency Ariel Rios Building 1200 Pennsylvania Avenue, NW Washington, DC 20460 US Telephone: 001-202 272 0167 http://www.epa.gov European Metal Packaging Avenue Louise 149/24 B-1050 Brussels Belgium Telephone: 0032-253 576 51 Fax: 0032-253 575 75 E-mail: info@empac.eu http://www.empac.eu Eurostat Government Buildings Cardiff Road Gwent, NP10 8XG Telephone: 01633-813 369 E-mail: eustatistics@ons.gsi.gov.uk http://epp.eurostat.ec.europa.eu GreenBoxDay http://www.greenboxday.co.uk International Seafood Sustainability Foundation PO Box 11110 McLean, VA 22102 US Telephone: 001-7032 268 101 Fax: 001-7032 268 100 http://iss-foundation.org National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London, SW1P 3HE Telephone: 020-7222 7665 Fax: 020-7654 1900 http://www.niesr.ac.uk SIG Combibloc Blackthorn Way Tyne and Wear Houghton-Le-Spring, DH4 6JN Telephone: 01913-853 131 Fax: 01913-854 713 E-mail: info.cbuk@sig.biz http://www.sig.biz
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Further Sources
TheMeatSite.com 5M Enterprises Ltd Benchmark House 8 Smithy Wood Drive Sheffield, S35 1QN http://www.themeatsite.com
US Food and Drug Administration 10903 New Hampshire Avenue Silver Spring, MD 20993 US Telephone: 001-8884 636 332 http://www.fda.gov
Key Note Sources

Key Note Ltd
5th Floor Harlequin House 7 High Street Teddington Richmond Upon Thames, TW11 8EE Telephone: 0845-504 0452 Fax: 0845-504 0453 E-mail: sales@keynote.co.uk http://www.keynote.co.uk
Key Note Market Reports Plus

Biscuits & Cakes Chilled Foods Confectionery Ethnic Foods Fast-Food & Home-Delivery Outlets Frozen Foods Ice Creams & Frozen Desserts Ready Meals Restaurants Sauces & Spreads Snack Foods 605 each Concentrating on more dynamic consumer markets, these offer the same incisive market intelligence as Market Reports, but include additional chapters and primary research data.
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Further Sources
Key Note Market Assessments Key Note Market Focus Reports Coffee & Sandwich Shops
Condiments & Sauces Cooking & Eating Habits Diet Foods Functional Foods Healthy Eating Low-Fat & Low-Sugar Foods Nutraceuticals Organic Foods Pet Foods Sweet & Salty Snacks Trends in Food Shopping Vegetarian Foods 899 each Providing in-depth strategic analysis and including primary research, these premium reports examine the scope, dynamics and shape of key UK and European markets, with a particular focus on financial services, consumer and lifestyle sectors. 699 each/999 set of 10 volumes Please contact sales@keynote.co.uk for sector-specific individual volume prices. Top Markets and Market Forecasts add a further dimension to the Key Note range, providing an in-depth, strategic and global view of key industries. Compiled using Key Note Market Reports, Market Report Plus and Market Assessments published in the previous year, Top Markets and Market Forecasts are an indispensable and authoritative mini business library, providing a one-stop shop for all your research needs. Other Market Focus reports are created in conjunction with specialist authors, consultancies and industry experts whose wealth of knowledge is vital in publishing this type of report.
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Further Sources
Key Note Financial Survey Reports

Agricultural Growers & Merchants Animal & Pet Food Industry Baking Industry Catering Equipment Industry Fish Industry Food Processors Frozen Food Industry Fruit, Flower & Vegetable Growers & Merchants Grocery Wholesalers & Supermarkets Meat, Egg & Poultry Industry 420 each For each key industry sector, there is a detailed Financial Survey report, bringing you invaluable financial information and contact details. You can choose from approximately 90 industry sectors where thousands of companies are profiled in each report.
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UKplc is an indispensable guide for managers and for those interested in gaining a greater insight into the financial performance of an average company operating in each of the main industries in the UK. Providing up-to-date information and analysis, the publication will allow the reader to gain a greater level of market intelligence as well as a good knowledge of the current state of the UK industry.
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Further Sources
Key Note Regional Leads Reports

420 For each region of Great Britain, there is a detailed Regional Leads Report, bringing you invaluable financial information and contact details for thousands of companies, which are profiled in each report. You can also choose from these further services:
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As well as choosing the companies you want to analyse, you can also choose exactly what performance information you need on them with our Bespoke Data Service. We will be able to provide you with information covering the companies, sectors, performance figures, ratios and other data items specific to your individual requirements alone. Even historical figures can be provided. Contact us for more information: sales@keynote.co.uk
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TGI tables, produced by Kantar Media, are generally based on one of the following groups: Households a private household consists of either one person living alone or a group of people, usually, but not always, members of one family, who live together and whose food and other household expenses are managed as one unit. Adults any person aged 15 or over. Housewives a member of a private household who is solely or mainly responsible for the household duties.
Number, Profile, Penetration

Tables used in Key Note reports may give figures for the Number, Profile, and/or Penetration. These terms are explained in the following table.
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TGI data used in Key Note reports are broken down by age, social grade and standard region.
Social Grade
This is normally based on the occupation of the Head of the Household, or if the Head of the Household is retired, their former occupation. If this information is not available, social grade is based on environmental factors such as type of dwelling, amenities in the home, presence of domestic help, etc. Social grade is assessed by the interviewer when collecting the information and is, therefore, based on information given personally and verbally by the respondent. Social grade is checked by Kantar Medias coding and editing office. The following table broadly defines the six social grades used. The relationship between social grade and net income of the Head of the Household is a complex one and readers should note that income is not determinant of social grade.
Social Grade A B C1 Social Status Upper middle class Middle class Lower middle class Head of Households Occupation Higher managerial, administrative or professional Intermediate managerial, administrative or professional Supervisory or clerical and junior managerial, administrative or professional Skilled manual workers Semi and unskilled workers State pensioners or widows
C2 D E
Skilled working class Working class Those at lowest levels of subsistence (no other earner)
Standard Region
This is as defined by the Registrar-General.
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Key Note Research
Key Note Research

Key Note is a leading supplier of market information, publishing an extensive range of consumer, industrial, business-to-business and services titles. With over 25 years experience, Key Note represents clear, concise, quality market information. For all reports, Key Note undertakes various types of research: Online searching is carried out by product code or free search method, and covers the period from the last edition of the report to the current day. Trade sources, such as trade associations, trade journals and specific company contacts, are invaluable to the Key Note research process. Secondary data are provided by Kantar Media (TGI) and Nielsen Media Research for consumer/ demographic information and advertising expenditure, respectively. In addition, various official publications published by National Statistics, etc. are used for essential background data and market trends. Interviews are undertaken by Key Note for various reports, either face-to-face or by telephone. This provides qualitative data (industry comment) to enhance the statistics in reports; questionnaires may also be used. Field research is commissioned for various consumer reports and market reviews, and is carried out by NEMS Market Research. Key Note estimates are derived from statistical analysis and trade research carried out by experienced research analysts. Up-to-date figures are inserted where possible, although there will be some instances where a realistic estimate cannot be made or external sources request that we do not update their figures. Key Note Editorial, 2011
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Financial Services Marketing to ABs Financial Services Marketing to ABC1s Financial Services Marketing to BCs Financial Services Marketing to C1C2DEs Financial Services Marketing to DEs Financial Services Marketing to Over 60s Financial Services Marketing to the Affluent Financial Services Marketing to the Retired and Elderly Financial Services Marketing to Start-Up Businesses and the SelfEmployed Financial Services Organisations on the Internet The Fish Industry Forecourt Retailing Functional Foods Funding in Higher Education
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Lifestyle Magazines 2006 2000 2009 2006 2009 2004 2009 2007 Low-Fat & Reduced-Sugar Foods The Luggage Market
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The Newspaper Industry 2010 2009 2001 2010 2010 2002 2010 2007 2007 2008 2009 2008 2009 2008 2009 2000 2008 2005 2008 2009 2005 2002 2006 2010 Non-Food Sales in Supermarkets Nutraceuticals
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2010 2002 2009 2008 2004 2009 2010 2001 2001 2001 2000 2009 2007 2010 2008 2009 2003 2008 2007 2005
Utilities
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2007 2009 2010 2009 2000 2007 2009
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Market Report Plus 2011

18th Edition February 2011 Edited by Katie Hughes ISBN 978-1-84729-702-0

James Donovan Managing Director Key Note Limited

Key Note Ltd 2011

Key Note Ltd 2011

THE TOTAL MARKET................................................................................................................10

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HOW ROBUST IS THE MARKET?...........................................................................................28 LEGISLATION...............................................................................................................................28

KEY TRADE ASSOCIATIONS....................................................................................................30

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Tulip Ltd.........................................................................................................................................38 Other Companies.........................................................................................................................39

OUTSIDE SUPPLIERS..................................................................................................................39 MARKETING ACTIVITY.............................................................................................................40

INTRODUCTION..........................................................................................................................44 RESEARCH FINDINGS................................................................................................................44

Key Note Ltd 2011

6. Strengths, Weaknesses, Opportunities and Threats

9. The Global Market

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INTRODUCTION..........................................................................................................................76 THE ECONOMY...........................................................................................................................76

FORECASTS 2011 TO 2015......................................................................................................78

11. Company Profiles

12. Company Financials 13. Further Sources

Key Note Ltd 2011

Understanding TGI Data

Key Note Research The Key Note Range of Reports

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Key Note Ltd 2011

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Key Note Ltd 2011

Table 1.1: UK Resident Population Estimates by Sex (000), Mid-Years 2005-2009

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Gross Domestic Product

2006 1,328,363 5.9

2007 1,404,845 5.8

2008 1,445,580 2.9

2009 1,392,634 -3.7

Key Note Ltd 2011

Table 1.3: UK Rate of Inflation (%), 2005-2009

Table 1.4: Actual Number of Unemployed Persons in the UK (million), 2005-2009

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Household Disposable Income

Table 1.5: UK Household Disposable Income Per Capita (), 2005-2009

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60,627 1,955 3.2

67,125 1,996 3.0

74,790 2,162 2.9

83,813 2,298 2.7

88,365 2,398 2.7

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2007 531 445 353 303 149 118 81 16

2008 629 475 380 313 142 122 84 17

2009 700 490 420 325 140 123 82 18

2010 739 525 440 333 138 124 80 18

Key Note Ltd 2011

2006 Total % change year-on-year

2007 1,996 2.1

2008 2,162 8.3

2009 2,298 6.3

2010 2,397 4.3

Source: Key Note

rsp retail selling prices