Surely, ’always leave room for dessert’ is one of life’s truest lessons. It’s certainly one that the pudding brands manufacturers will be hoping buyers keep front of mind as they sharpen their pencils, with an eye to revving up under-performing own-label puddings possibly at the expense of the brands.
"Certain supermarkets have been taking stock of their own category and organising themselves to potentially streamline next year; 2010 will be a lot tougher for brands like ours," says Roberta Herd, assistant brand manager at Farmhouse Fare, which supplies both branded and own-label pudding pro-ducts. "We’re looking to retain our position as a quality brand, and also to look again at foodservice options."
The traditional pudding market in which it operates accounting for about a fifth of total chilled desserts sales has dipped in the last year, with promotions hitting value perception. "There has been a lot of work on deals, especially twin-packs, with a focus on promotion for the last year," she continues. "This is driving down price and expenditure. That’s why traditional puddings are tracking slightly behind in value on last year. But Farmhouse Fare has seen really good growth about 56% in the last quarter (Nielsen, week ending 3 October 2009)." This is on the back of a new 10-strong range going into 52 more upmarket Tesco stores, as well as healthy promotional activity.
News of the renewed focus on own-label comes with the latest figures from TNS, showing retailer own-labels faring worse than the brands (see overleaf). But the biggest winner after a year in recession has been the frozen desserts category. Manufacturers supplying foodservice also report gains for frozen products, though this is offset by the struggling hotel and restaurant sector, with the latter seeing a 25% rise in insolvencies in the last nine months compared to last year (PriceWaterhouseCoopers).
"There is definitely a trend back to frozen due to reduced wastage," says Angus Allan, MD of Indulgence Patisserie, which supplies a number of chilled and frozen private-label products. "But if there is such a trend in foodservice (towards supplying frozen products), they are overwhelmed by the reduced number of people eating out. My gut feeling is this will last until after the election. Retail is very buoyant, foodservice is flat, but the coffee shop sector is doing fine."
Clean-label declaration continues to be a priority, which has benefited the frozen sector. "The retailers always go after the chilled, but immediately you have a life and a wastage problem," says Doug Chapman, MD of frozen supplier Speciality Desserts, which focuses on developing bespoke desserts to fit a brand concept in the hotel, pub and restaurant markets. "With frozen, you’ve got more flexibility. Certainly in our marketplace it’s about zero wastage."
Frozen moves upmarket
While people become more conscious of wastage, there is also a shift away from the snootiness that saw frozen as inferior. "Caterers just need to look into high-quality, pre-prepared frozen alternatives to premium-priced, chilled options; while there may be a reluctance to accept it, sceptics will be genuinely surprised at the serious product development and premiumisation over recent years," says Emily Frank, brand manager for Alveston Kitchens, Heinz Foodservice’s recently rebranded frozen desserts range.
Meanwhile, manufacturers are having to tiptoe around risk-averse consumers. "What we’ve found from customer feedback is that they don’t want new and different desserts, as this would be too risky for them," she says. "So our focus is on finding new twists on traditional favourites, looking at new formats, flavours and portion sizes."
"Product-wise, it’s all a bit retro at the moment," agrees Allan of Indulgence Patis-serie. There was a definite drop-off in new product development during 2009, but that appears to be returning, "mainly in the core rather than premium ranges", he observes.
But Herd of Farmhouse Fare thinks that, while NPD is creeping back, value compromises may hamper uptake. "Elsewhere this winter, we’ve seen own-label innovation geared towards restaurant-style fancy foods, such as make-your-own-cheesecake, possets, patisseries and tarts," she says. "Time will tell, but I’m not confident the quality is there for it to work. As a brand, we stick to what we know and do best, which is luxury traditional nursery-style puddings, such as lemon, syrup, gingerbread and rice puddings."
Meanwhile, the puddings sector is having to reassert its premium values. "We have seen a growth in multi-saves ie, two for £10 and even two for ones," says Chapman of Speciality Desserts. "As a result, it is now almost an expectation from the consumer, so the industry will find it difficult to move away from this as the economy recovers. We are starting to see a development where consumers are becoming bored of these ’safe’ choices and are looking for better quality and something a little different new ideas and concepts to excite, not just pre-cut gateaux from an ageing portfolio of dated desserts."
Some suppliers are reinforcing their value point of difference in foodservice with brand credentials. "We are driven by innovation and we’re finding that especially in the current climate there has to be a genuine point of difference for people to actually buy a dessert," says Paul Stewart, marketing director of Aulds Delicious Desserts, which supplies frozen foodservice desserts through wholesalers, from independents up to 3663 and Brakes Group, as well as coffee shops including Caffè Nero. As such, Aulds has launched six new desserts, including a Rhubarb and Custard dessert using Courvoisier. "Spirit flavouring is something we’ve dabbled with before, but this is the first time we’ve gone with a major brand, and it has gone really well; as well as enhancing the flavour of the product, Courvoisier is adding value to the caterer’s menu and allows them to put a premium on the product."
Even so, with hotels and restaurants struggling, suppliers are finding new channels of growth. "We’ve recently seen a slight decline in the market, driven by the tough time the hotel channel is having, but we’ve seen growth coming from some channels, notably the health and welfare channel," says Alveston’s Frank. "In 2010, when the economy starts to turn around and the fortune of hotels returns, we’ll see a direct effect on the frozen desserts market. Our consumer research showed us that, although dessert sales are declining slightly, two-thirds of consumers claim the current economic climate has not affected their dessert eating habits at all."
Meanwhile, buyers are turning away from expensive imports towards home-grown products. UK puddings and desserts manufacturers like Indulgence are benefiting from the weak pound. Allan says: "If you are a desserts manufacturer in the Eurozone, it’s increasingly hard to supply to the UK, because your pricing is uncompetitive. We’ve been asked to replace French, Italian and German manufacturers recently."