Welcome to our ‘weekly news in brief’, covering the latest from UK retailers and manufacturers.
RETAIL NEWS
Waitrose launches summer holiday virtual cookery classes for children
Waitrose has launched a series of virtual cooking classes for children to help pupils learn new skills during the summer holidays and inspire a love of food.
Each week, chefs from the retailer’s cookery school will teach a range of new techniques – from pastry making to basic knife skills – and talk about different ingredients and seasonality. Each virtual cook-along class will be limited to a maximum of eight households and will take place from Tuesday to Thursday at 10am for one hour during the school summer holidays. The chefs will teach a different recipe each week, from sausage rolls to apple & cinnamon cakes.
“We are looking forward to joining families in their own kitchens and helping to teach the next generation new skills and sharing our love of food,” said Kirsty Scott from the Waitrose Cookery School. “Our online cookery school courses have been incredibly popular through lockdown, so we’re thrilled to be opening these up to children as well.”
Source: The Grocer 24th July 2020
Nisa launches Christmas pre-sell event with focus on own brand
Nisa has this week launched its festive food catalogue for its retailers to pre-order their fresh and frozen products for the key trading period. The pre-sell event comes after a successful pre-sell for seasonal ambient lines and again includes an extensive range of Co-op own label alongside branded options.
The range covers all eating occasions from party treats, snacking, and the main meal. It offers a choice of starters, meats, side dishes, and desserts. The group stated that there is a strong focus on Co-op own brand so that independent retailers can offer an extensive range that it is competitively priced.
Tracey Redfearn, Own Brand Manager at Nisa, said: “A lot of people have spent much of this year living on a reduced income and we’re facing a recession and high unemployment rates, so value for money is going to be key for many shoppers this Christmas and stocking a credible range of own brand products is going to be more important than ever.
“Almost half of shoppers believe Christmas lunch is the main part of the day and with 60% of total spend on Christmas Day food spent on own brand products last year, there is a brilliant opportunity for Nisa partners to make the most of the Co-op range available to them.” Nisa partners have until 19 August to submit their online orders.
Source: NamNews 22nd July 2020
Tesco named top brand for positive contribution during Covid-19
The British public has picked out Tesco as the brand that has made the most positive contribution through its actions during the coronavirus pandemic. Research from IAB UK and YouGov, which questioned 2,123 adults on their thoughts on brand behaviour and messaging during lockdown, found that 79% of participants were likely to favour brands that have behaved well during the pandemic.
Tesco was spontaneously mentioned by 15% of respondents, Asda ranked as the nation’s second-most favoured brand, followed by fellow supermarkets Morrisons, Sainsbury’s and Aldi.
Clear and frequent communication (noted by 75% of those surveyed) and enforcing safety measures (62%) were cited as contributing factors among participants.
At the beginning of lockdown (27 March), Tesco was one of the first brands to launch a campaign promoting its social-distancing measures – a campaign that was hailed by Leo Burnett London’s chief creative officer Chaka Sobhani as a turning point for Covid-19 creativity. Other works released during the pandemic include a revamp of Tesco’s "Food love stories", which included a "Nan’s ‘long distance’ Easter lamb recipe".
Marks & Spencer, Amazon, Waitrose, Co-op and Boots were also named in the top 10 (see below for the full list). More than half (59%) of participants said the crisis had highlighted the importance of
supermarkets and other essential services such as online retailers, food shops, banks and delivery companies. However, four-fifths (80%) of participants claimed they were less likely to buy from brands that were perceived to have behaved poorly during the pandemic.
Source: Campaign 23rd July 2020
Morrisons launches meal kit box
Morrisons is capitalising on the success of its food box scheme during the pandemic with the launch of a new box that offers ingredients and recipes for five family meals for £30, including delivery. The supermarket took on the likes of Gousto and HelloFresh with the launch of a meal kit delivery service back in 2018. However, the ‘Eat Fresh’ scheme was halted at the start of the coronavirus outbreak due to raised demand for food.
Morrisons subsequently introduced an essentials food box option aimed at self-isolating, elderly or vulnerable customers that were not able to visit a shop. The range has been expanded in recent months to include a Vegetarian Food Box, Gluten Free Food Box, BBQ Food Box, Market Kitchen Takeaway Favourites Box and British Farmers Food Box.
The latest box, called Five Meals to Feed a Family of Four, is designed to provide “quick and easy” homemade evening meals that shoppers can cook from scratch. Morrisons said each meal will cost around £1.50 per head but unlike other recipe boxes on the market will contain full retail-sized packs of ingredients where any leftovers can be used for other meals. The box contains 22 different products and weighs 14kg.
Tessa Callaghan, head of food boxes at Morrisons said: “Many of our customers enjoy eating meals as a family and we have seen customers do this more during the pandemic. It can be difficult to constantly cook up new dishes that please everyone. So, we wanted to create a great value box that contained high-quality produce and recipe cards – to make it easier to try new things.”
Recipes in the boxes include spaghetti bolognese, vegetarian pasta bake, cottage pie, sausage tray bake and mixed bean chilli with wedges.
Source: NamNews 20th July 2020
MANUFACTURING NEWS
Procter & Gamble extends Olympics partnership
Procter & Gamble (P&G) is extending its partnership with the Olympic and Paralympic movements until 2028, when Los Angeles will host that year’s summer games. As a global partner, P&G will continue to support the Olympic and Paralympic Games Tokyo 2020, as well as the Olympic and Paralympic Winter Games Beijing 2022, Paris 2024, the winter 2026 Milano-Cortina games and Los Angeles.
“As a top partner of the IOC for the past 10 years, we are extremely proud of the work we’ve done together,” says P&G chief brand officer Marc Pritchard. “As we look forward to the next decade, we recognise the opportunity and the responsibility to use our sponsorship of the Olympic games for broader impact.
“In the spirit of the Olympic movement, we’re making a shared commitment through our partnership to create positive change in the world in the areas of equality and inclusion, environmental sustainability
and community impact.”
IOC president Thomas Bach adds: “Procter & Gamble has been a true partner to the IOC and a powerful force in supporting the ideals of the Olympic Movement. As we mark one year to go until the Olympic Games Tokyo 2020, we are delighted to announce that we will be ‘stronger together’ with P&G until 2028. Looking to the future, we have prioritised clear purpose-led initiatives that support the IOC’s vision of building a better world through sport.”
Source: Marketing Week 23rd July 2020
Less is more? Lush slashes product line up
Lush has announced that it is set to discontinue a plethora of products after Founder Mark Constantine had the chance to reflect on the ethical beauty chain’s range during lockdown.
Products were evaluated using three criteria, namely: Does it serve the customer’s needs? Is it number one in its category? Is it part of a cosmetic revolution? And as a result, a considerable number of
products across the bath bombs, bath oils, bubbles, shower, body, face, make-up, oral care, hair care and soap categories will be sidelined.
Lush says that the cull will allow it to make room for new creations it has in the pipeline, and that it will also enable subscribers to petition for their favourites to be reinstated. In the meantime, the news could prompt fans of the products due to be given the boot to stock up, boosting sales.
Source: Global Cosmetics 22nd July 2020
Coca-Cola to cut ‘zombie brands’ as it looks to ‘weed out’ the poor performers
The Coca-Cola Company will cut a number of its “zombie brands” as it looks to focus its resources on its biggest, most profitable lines in the wake of the “toughest and most complex” period in its history. Speaking on an investor call today (21 July) CEO James Quincey said: “We need to do a better job of nurturing and growing smaller and more enduring propositions and exiting zombie brands, not just zombie SKUs.”
Coca-Cola currently has around 400 master brands but admits that more than half are country brands of little to no scale. They also account for just 2% of the company’s total revenue, with the rest accounting for the remaining 98%. Yet despite their small size, they still require resources, which Coca-Cola believes is pulling time and money away from its bigger, more profitable businesses. “They are going slower than the company average but each one still requires resources,” Quincey added. Quincey promised that Coca-Cola will “weed out” smaller brands that “have not worked” in order to redirect resources to those with more opportunity to grow.
He explained: “What we want to see is a steady pipeline of progression of creating ever stronger brands. We have got to launch a series of explorers to get there knowing most of them won’t make it. But we have not been assertive enough and directive enough at weeding out the explorers that have not worked so we can redirect resources onto explorers and challengers that have the most opportunity.”
Coca-Cola has adopted a three-tier system for its brands since 2019. These include leaders – its biggest brands; explorers – with which it looks to disrupt markets; and challengers – those that have the ability to grow to become leaders. It is not doing away with this system but rather being brutal in its assessment of whether brands can make it to the next level or not.
Quincey said: “The question is are they succeeding or not? Success criteria for explorer is very fast growth and starting to gain a core of very engaged and loyal consumers, making waves in the category although small. For challengers, it is being able to gain enough market share that over time we believe they can get to leadership – where there is both scale and more favourable margins.”
This also does not mean Coca-Cola wants to stop innovating or launching new brands. But it will be “streamlining” its innovation pipeline and skewing it towards initiatives that can scale regionally or globally. “It would be a sign of weakness to have no smaller brands in the portfolio because it would mean we are not nurturing the future,” said Quincey.
Source: Marketing Week 21st July 2020
Kellogg’s unveils Crunchy Nut peanut butter
Kellogg’s UK has partnered with family-owned peanut butter manufacturer, Duerr’s, to launch new Crunchy Nut Peanut Butter. With both businesses headquartered in Manchester, the collaboration involved a merging of expertise, resulting in a launch that combines two breakfast favourites.
Crunchy Nut Peanut Butter rolled out to Sainsbury’s stores this week with a RRP of £2.50. It is said to have a smooth texture combined with crunchy, honey-coated roasted peanuts. With the peanut butter market currently estimated to be worth £104m and the retail sales value of Crunchy Nut standing at over £100m, Kellogg’s stated that the new launch provided an opportunity to penetrate a wider range of occasions with the cereal brand, in addition to breakfast.
Ben Simpson, Revenue & Channel Director at Kellogg’s UK commented: “Crunchy Nut is regularly hailed as the UK’s favourite cereal and we have seen huge sales increases over the last few months,
with more shoppers having breakfast at home.
“Knowing the popularity of the cereal, launching Crunchy Nut Peanut Butter allows us to meet a wider range of consumer occasions and it’s been great to work with another Manchester-based business in Duerr’s to make that possible. With recent data revealing peanut butter sales have overtaken jam, we’re confident that the launch of Crunchy Nut Peanut Butter will prove to be a popular one.”
Richard Duerr, Sales and Marketing Director at Duerr’s, added: “The peanut butter category is a huge area of growth, with sales currently booming. We’re extremely proud to have teamed up with another Manchester giant to create this exciting product that marries together two hugely popular breakfast staples to create the ultimate treat.”
Source: NamNews 21st July 2020
WIDER INDUSTRY NEWS
Retail sales rebound as lockdown lifts
British retail sales grew by 13.9% in June, compared to May, according to the Office for National Statistics, almost returning to pre-lockdown levels as non-essential stores reopened.
Sales were down by just 1.6% compared to June 2019 and 0.6% compared to February, the last full month before the coronavirus lockdown. Excluding fuel, which has been hit by less commuting, sales were 2.4% up on February.
Non-food and fuel sales showed strong monthly growth – up 45.5% and 21.5% respectively – but have not returned to pre-Covid levels. Food sales, meanwhile, reached a new high with sales 5.3% higher than February. The proportion of shopping done online dropped back slightly to 31.8% but that is much higher than the 20% seen in February. And ecommerce retailing was 53.6% higher than February.
Retail Economics CEO Richard Lim says,: “The retail sector bounced back as the reopening of shops released pent-up demand for some retailers. But the recovery is being felt unevenly across the sector with clothing retailers remaining under significant pressure.”
Across the second quarter, retail sales were down 9.5% compared with the first thee months of the year.
Source: Marketing Week 24th July 2020
England yet to embrace reopened restaurants and pubs, data suggests
People have not embraced an easing of lockdown restrictions in England’s pubs, bars and restaurants, according to figures that showed a drop in sales of about 40% among venues that opened their doors at the beginning of the month. Pubs that were open in the week beginning 6 July posted a 39% decline in sales compared with the same period last year, while bars were down 43% and restaurants down 40%.
“Trading at almost 60% of pre-Covid norms is actually a better performance than many other markets internationally, such as the US, experienced on reopening,” said Karl Chessell, director of CGA, a consultancy which produces the tracker data along with The Coffer Group and the accountancy firm RSM. The data was collected from 44 companies including nationwide pub, bar and restaurant groups.
“The sector still has a long way to go, but this sets the benchmark against which the speed of recovery will be judged,” Chessell said. Hospitality venues have been gradually reopening since lockdown restrictions were loosened, and just over half of chain-owned sites have reopened for eating and drinking inside. Pub and restaurant operators are taking a “phased approach to reopening”, said Chessell.
Pubs were more enthusiastic about welcoming back customers than bars and restaurants. Almost three-quarters of pubs or pub restaurants (70%) surveyed had reopened their doors, compared with under half of bars (42%) and just 17% of restaurants.
Hospitality venues will be hoping the chancellor’s temporary cut to VAT from 20% to 5% on goods and services including meals in restaurants, cafes and pubs, which came into effect on 15 July, will attract customers back to dine or pay a visit to their local. There is no VAT cut on alcohol.
Source: The Guardian 17th July 2020
CPG demand remains elevated in major European markets
IRI has updated its FMCG/CPG Economic Indicators that measure consumer demand and pricing changes in grocery retail, highlighting key trends in the wake of the coronavirus outbreak in markets such as France, Germany, Italy, the Netherlands and the UK.
Latest insights show that consumer demand for consumer packaged goods (CPG) remains elevated in the UK, France, Germany and the Netherlands compared to a year ago. In Italy, demand has remained stable for the past week compared to last year. In the UK, the Netherlands and Germany, demand for grocery is outpacing non-edible, while in France and Italy, non-edible is growing more than edible. In Germany, demand for non-edible is decreasing, driven by lower demand for hygiene products, cosmetics/body care products and laundry detergents.
Each country shows different trends in edible categories but figures overall suggest demand is slowing down as markets begin to return to some kind of normality. In the UK, demand is ahead of last year for beers, wines & spirits, fresh meat and frozen, although sales growth is down. Meanwhile, in France, frozen, alcohol and beverages are down vs. a year ago but up week-on-week. In Italy, every category saw demand slow down compared to a year ago, dropping into negative except for packaged food.
Highlights in consumer demand for non-edible categories include beauty care products in France, which remain lower than last year, and in Italy where there is lower demand for perfumery, make-up and body care vs. the previous year. In the Netherlands demand for facial and body care is back to growth. Prices continue to increase in all countries. The UK being the country with the highest inflation. In the Netherlands, UK and France, alcoholic beverages are leading price increases. Frozen food also has strong inflation in Italy and the UK (with a peak in the country for ice creams/frozen desserts).
Source: NamNews 23rd July 2020
Economy has recovered half of losses, says Bank chief Andy Haldane
The economy has recovered half of the output lost during lockdown, according to the Bank of England’s chief economist. Andy Haldane told the Treasury select committee yesterday that the economy had enjoyed a bounce-back in activity since output plummeted by a quarter after social distancing measures were introduced in late March. “Roughly half of the roughly 25% fall in activity during March and April has been clawed back over the period since,” Mr Haldane, 52, said. “We have seen a bounceback. So far, it has been a ‘V’.”
Mr Haldane’s view contrasts with that of Andrew Bailey, the Bank’s governor, who was more cautious in comments that he made last week. Mr Haldane, the only member of the nine-strong monetary policy committee to oppose expanding the Bank’s asset purchase programme last month, said he believed that the economy was growing by about 1% a week on average, based on business surveys and other less conventional figures, such as traffic and mobility data.
Many economists fear that the nascent recovery will lose momentum if economic demand does not pick up in the coming months. This could lead to a second increase in unemployment when the chancellor’s job retention scheme, which is supporting the incomes of about a quarter of the workforce, closes in October.
Britain’s economy returned to growth in May, expanding by 1.8%, but economists had been hoping for a much bigger rise of 5.5% and warned that the figure dampened hopes of V-shaped recovery. Mr Haldane said that the latest data suggested that the economy did enjoy a boost in June and July, but he warned that the future was still uncertain.
“The V is a description of the past, not a prediction of the future,” he said. “[But] there plainly has been a recovery, and a pretty sharp one. So far it has been a V. That, of course, doesn’t tell us about where we might go next and we have still seen a daily diet of news about redundancies across industries.”
Silvana Tenreyro, an external member of the MPC, told MPs that she was less optimistic. The recovery would look more like an “interrupted V- shape” and could be compromised by rising unemployment, cautious consumer behaviour and continued social distancing, she said. Professor Tenreyro, 46, said that much of the initial recovery had been the natural consequence of policy easing, but she warned that voluntary social distancing could continue to undermine growth. Unlike Mr Haldane, she judged demand to have fallen behind supply in June.
Source: The Times 21st July 2020
MERGERS AND ACQUISITIONS
Euro Food Brands purchases The Food Doctor brand
UK distributor Euro Food Brands has acquired healthy snack brand The Food Doctor from William Jackson Food Group for an undisclosed sum. Following the acquisition, The Food Doctor will join Euro Food Brands’ portfolio of exclusive worldwide partners including Reese’s, Barilla, Campbell’s Soup, Ainsley Harriott and Voss.
Source: Foodbev Media 24th July 2020
Deliveroo sparks IPO speculation after appointing new CFO
Deliveroo has sparked fresh speculation that it is considering an IPO after appointing a new chief financial office, Adam Miller Deliveroo’s founder and chief executive Will Shu informed staff that “Deliveroo’s vision is to be the definitive food company,”
Source: The Grocer, 15th July 2020
Unilever's tea demerger leaves questions brewing over Lipton
Unilever has also completed the review of its global tea business, which will result in the sale of the majority of the business. The company will retain the tea businesses in India and Indonesia and the partnership interests in the ready-to-drink tea joint ventures. A process will now begin to implement the separation, which is expected to conclude by the end of 2021.
Source: The Grocer, 23rd July 2020
