MarketLine Blog

Posts about Food

Food Waste in the UK: Government and retailers must do more

MarketLine

In recent years, there has been a growing awareness of food waste in the UK and a number of initiatives developed in an attempt to reduce this. Several retailers in the UK have pledged to drive down food waste from stores, while numerous campaigns have aimed to educate individuals and cut the amount of food waste from households. UK charity, Waste & Resources Action Programme (WRAP), has been at the forefront of campaigns. In 2007, WRAP launched its ‘Love Food Hate Waste’ campaign backed by the government. Results from some… Read more

Brazilian meat scandal: Confidence in $14bn industry is returning

MarketLine

The scandal to hit the meat industry in Brazil at one stage threatened to result in the sort of bans on a food product not seen since the BSE crises occurred in the United Kingdom in the 1990s. Although the more salacious accusations reported in the press have come to nothing, many serious accusations resulted in the erection of import bans; China stopped all imports of Brazilian meat, whilst the EU only prevented access from the affected plants. But now the worst consequences appear to have been avoided and the… Read more

Tesco-Booker: The Squeeze on Small Businesses

MarketLine

Tesco, one of the largest retailers in the world, is the most dominant supermarket in the UK market. Its recent announcement to merge with Booker was a surprise to all. Booker occupies a very different area of the market, primarily offering bulk-purchase supply to small retailers, both independent and franchised stores under brands it owns, such as Londis and Budgens. At first glance then, this seems an odd target for Tesco; to merge operations with a company whose target market is so different to its own. Indeed, no one considers… Read more

Sequencing Quinoa: Food for thought

MarketLine

The pharmaceutical industry has been growing at a strong rate in recent years. One aspect of this market is that of the food supplement. The growing trend especially amongst the older populace and with the hectic lifestyles that are led in developed countries lends support to the supplement industry. The ability of scientists to understand the functions of different genes have assisted in the growth of specific markets and also in the changes to specific plant species. When looking at some of the historic plant species and how they have… Read more

KFC China: New facial recognition software is more offending than ground-breaking

MarketLine

Poor industry performance due to bad food ratings and hygiene issues has been severely damaging for the KFC brand over recent years in China. With a significant share in the Chinese market, KFC’s parent owner Yum! have some important decisions to make in order to build back growth for the franchises once again. It is clear that the technological vanguards are forefront to many industries who wish to make their services more efficient, cost saving and increase its customer satisfaction ratings, while of course keeping consistency across its brand. With… Read more

Sorry for any inconvenience caused? Morrisons expected to sell off its M local convenience stores

MarketLine

Morrisons, Britain’s fourth-largest grocer, is in advanced talks to sell its convenience stores to investment firm Greybull Capital as new chief executive David Potts seeks to focus the business on its traditional supermarket estate. Greybull was working with a team of industry executives to take over about 150 stores that trade as M local and generate annual sales of about GBP 300m (approximately $494m). The convenience sector has become a primary focus for many UK retailers reeling from the discounter industry disruption, which has seen Aldi and Lidl wrestle market… Read more

General Mills sees gluten-free products as major drivers of sales

MarketLine

General Mills has successfully entered the tricky gluten-free food market. It can be difficult for a major existing corporation to successfully enter the gluten-free food market. Such companies may find it difficult to adhere to strict regulations that gluten-free foods must adhere to, as most have produced, and will continue to produce, gluten-containing foods in their manufacturing facilities. What’s more, developing gluten-free foods is expensive and time-consuming. Companies must often undergo trial-and-error to retain a food’s flavor, texture, and consistency without including gluten, which is often used to give structure… Read more

Chipotle outgrows McDonald’s and puts the “fast” in fast casual, leaving its former parent in its wake

MarketLine

In just 21 years, Chipotle has fast become one of America’s major success stories, growing from a single restaurant in 1993 to over 1,700 restaurants (1,715 as of June 30, 2014). However, the company had a little help along the way. In 1998, fast food giant McDonald’s took a minority stake in the fledgling Chipotle, owning 90% of the company by 2006. During McDonald’s’ stewardship, Chipotle grew its restaurant network from 14 restaurants to over 500, with 100 a year being added. When Chipotle went public in 2006, McDonald’s took… Read more

Superfood powders are the latest alleged panacea of the health-conscious world

MarketLine

Superfood powders are marketed for their myriad of supposed benefits, from improved skin and increased energy, to preventing conditions and diseases such as diabetes, cancer, and dementia. Superfood powders contain ground down superfoods, freeze dried and fine milled. Products which use the powders include the Super Elixir, boasts strong content and an equally eye watering price. Superfood powders have seen strong growth, although remain only a modicum of the wider market. Vitamix, a smoothie maker has also received celebrity endorsements and a loyal customer base despite its expensive price. Increasing… Read more

Supermarket price wars: A race to the bottom?

MarketLine

Grocery retailers in the UK have been experiencing the effects of a noticeable shift in consumer behavior in recent years. The recession, and the accompanying squeeze on incomes, has led to many consumers becoming shrewd in their purchases and increasingly looking to find the cheapest option. This has led to a climate in which discounters, and in particular Aldi and Lidl, have been able to thrive. Loyalty to supermarkets has been affected, with consumers more willing to shop around for their goods. This has had a detrimental impact on the… Read more

The driving force behind Aldi’s success: Phantom Brands

MarketLine

Discount supermarket Aldi reported a 65% jump in pre-tax profits in September 2014. More than 95% of Aldi’s products are own label, but many of its products lack direct reference to the retailer. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn; market share for retailer brands has increased rapidly over the years, most notably in the UK, Spain, Germany, Italy and the Netherlands.  After years of consistent market share increases, private label now has its strongest competitive position ever. Of particular interest is the… Read more

Natural sweeteners market – Stevia

MarketLine

The global diet soda beverage market has been on the decline for the last six years. The last 10 years were hard for producers of diet drinks, especially carbonated ones. In March 2014 the diet soft drink market declined further, by about 7% compared to February’s figures with Coca-Cola recording a 6% decline and PepsiCo hitting almost 7% decline in volume terms. Stevia’s leaves are remarkably 300 times sweeter than plain white sugar while containing no calories, has been heralded as the answer to changing diet habits. Global stevia sales… Read more

Halal: The new organic

MarketLine

The global halal market, which includes products and services complying with Islamic laws and regulations, was valued at $1.7tn in 2012, growing faster than other consumer markets despite the recent global recession. At a time when many Western markets are reaching their saturation point, Muslim consumers are becoming a target audience, and the halal market is emerging as one of the fastest growing consumer segments in the world. Despite the common belief that the term “halal” is limited to meat and poultry, opportunities in the halal market go way beyond… Read more

Improved quality and packaging narrows gap between private and branded products

MarketLine

Consumers are becoming increasingly inquisitive about where their products are being manufactured. Private labels now have a similar quality to other renowned brands; and more consumers are now aware that many private label ‘generic brands’ foods are actually made by the same companies that produce higher priced name brands. Such Knowledge has aided growth in this sector. As discussed in the MarketLine case study, Supermarket private labels: growth following economic downturn, supermarkets are changing consumer perception. Consumers are not having to compromise on the quality of products if they purchase… Read more

Independent retailers and restaurants are small but growing organic food sellers

MarketLine

Sales of organic food through independent outlets rose by 6.9% in 2013 to a value of £513m (approximately $801m). Independent outlets include box schemes; farm, health and wholefood shops; farmers’ markets; and online purchases. Most independent retailers have seen strong growth: a Soil Association survey found that 75% grew, with three quarters of these retailers reporting sales growth of more than 10%. Only 6% experienced a decline in sales. Home delivery schemes have been doing particularly well: sales grew by 11% in 2013 to reach £193.6m (approximately $302.6m). Abel &… Read more

Whole Foods: A victim of its own success?

MarketLine

Whole Foods, the US-based organic food retailer, is not now nor will it ever be a cheap shopping experience. Despite its high prices, the company has seen its revenues rise in recent years, as demand for healthy, natural foods has constantly increased. However, despite a whole paycheck being needed to shop at this organic food giant, recently only a fraction of one has been needed to buy the company’s stock. The company has seen its shares fall almost 35% in 2014. The main reason for the stock’s poor performance is… Read more

Burger King shows franchising is the way to be profitable

MarketLine

The FRANdex is a stock market index that tracks the market cap of a basket of companies which act primarily as business system franchisors. The latest (Q1 2014) report on its performance reveals that it has outperformed the S&P 500 index since 2006. It looks like these companies are doing something right. In fact, learning how to “do something right”, and then passing on the knowledge, is central to the business model of successful franchisors. Take Burger King, for example. Founded in 1954 as a quick service burger restaurant, there… Read more

Nothing fishy about the global aquaculture industry’s performance

MarketLine

Overfishing across the world’s oceans is becoming an increasingly serious problem, causing fish stocks around the globe to become depleted. Furthermore, fishing fleets are estimated to be two to three times larger than is necessary, causing further unsustainability in fish stocks. Fishing rights disputes have also become increasingly common; as a result aquaculture is becoming increasingly important as a solution to sustainability in the fish industry. This is reflected in the global aquaculture industry’s growth of 5.4% in 2013, to reach a value of $121 billion (with almost 60 million… Read more

Arla’s Lactofree increases its consumer base

MarketLine

With an increase in self diagnosed cases of lactose intolerance; sales of lactose free products are expected to grow at a strong rate between 2012 and 2016, according to findings from Food and Health Innovation Services. Arla’s brand Lactofree specializes in offering complete lactose free products which are not readily available in the market.  The Lactofree brand offering includes milk, butter, cheese, cream, yogurt, ice-cream and many more. According to the UK’s National Health Service (NHS), lactose is a sugar found in milk. It cannot become absorbed by the body… Read more

Starbucks: Expanding beyond coffee

MarketLine

In recent years, Starbucks has embarked on a growth strategy known as the ‘accelerated growth plan’ in an effort to grow the business. A key part of this initiative, as discussed in the case study ‘Starbucks Corporation: Accelerated Growth Plan’ , has been the expansion of in-store offerings beyond coffee. In order to aid this expansion Starbucks made a number of acquisitions, namely of Evolution Fresh, La Boulange, and Teavana. Following the purchase of Evolution Fresh in late 2011, the company set out aggressive growth plans with the plan being… Read more

Industry Analysis – Food Retail

MarketLine

Introduction Despite the financial differentiation of wealth in the continents the food retail industry is almost equally spread between Americas, Europe and Asia-Pacific. This is due to food production surpluses in North America, Australia and Western Europe that the global food market is close to equilibrium. The global food retail industry grew by with compound annual growth rate (CAGR) of 4.8% over last five years, to reach a value in excess of $5.5tn. The greater amount of food is being sold by Supermarkets and Hypermarkets, with the distribution share of… Read more

Emphasis on food is shifting from nutrition to function

MarketLine

Scientific research has typically focused on the primary role of food as a source of energy and nutrients to build up the body. However, in recent years there has been a shift towards the impact that certain food components can have on human health. There has been a wealth of research to support the idea that diet and lifestyle contribute to health and may play a role in some human diseases. The concept of food being linked to human health is not new and has been reported throughout history. During… Read more

Cadbury investing heavily in sales to expand market in India as sales slip

MarketLine

According to the Indian Times, Cadbury brand owner Mondelez International is investing heavily in sales and route-to-market expansion in India, a priority market for the American food giant where sales have slumped to their lowest since 2005. Cadbury’s factory was set up in India in 1948 and the brand is a significant player within the confectionery market with a value market share of over 70% (in the chocolate category). Cadbury Dairy Milk is considered the ‘gold standard’ for chocolate in India.  Cadbury has six company- owned manufacturing facilities in India… Read more

Savory snacks market comfort eats its way to growth despite difficult economic conditions

MarketLine

Despite the residual effects of the 2008 financial crisis still being felt in many nations around the world, particularly in Europe, consumer demand for savory snacks has continued to show growth, not only in developing countries but also developed nations. The global savory snacks market grew by 5.3% in 2012, to reach a value of $89.6 4illion, representing a compound annual growth rate of 5.0% for the period spanning 2008-2012. The Americas proved to have the largest share of the market, with 44.7% of the total value in 2012, Asia-Pacific… Read more

McDonald’s is going to pumpkin battle with Starbucks

MarketLine

To maintain profitability in the face of higher labor, occupancy and operating costs, McDonald’s is responding by adding more premium and also expensive, items to its menu. After introducing wraps and smoothies, the company is now looking to take a sip of the coffee market and win some of the Starbucks crowd. Pumpkin spice-flavored latte is the new battlefield. According to Starbucks spokeswoman Alisa Martinez, Starbucks has sold more than 200 million pumpkin spice-flavored lattes within the ten years since they were introduced in 2003. A 16-ounce pumpkin-spice latte sells… Read more

Costa Coffee’s journey to become UK’s largest coffee shop chain

MarketLine

My colleague Nick Wyatt’s recent MarketLine blog paints a sombre picture of the UK high street, with bricks-and-mortar retail hit hard by the rise of online shopping and lack of consumer confidence. However, some high street outlets are experiencing a more positive performance: coffee shops, for example. The UK coffee shop sector has seen strong expansion in revenue and outlet volume for several years. Chief beneficiary of this trend has been Costa, currently the largest branded chain in the UK as measured by the number of outlets. It’s been around… Read more

Frito-Lay SunChips: When Sustainable Packaging Conflicts With Consumers’ Sensory Needs

MarketLine

Savory snack giant Frito-Lay re-launched its popular SunChips healthier snacking range in the US and Canada in plant-based, 100%-compostable packaging, but the noise created when the product was used led to a significant consumer backlash. As a result, the company has reverted to conventional packaging for most of its SunChips lines in the US, although it has retained the compostable packaging in Canada. This article examines how a lack of attention paid to the packaging’s sensory qualities, to consumers’ key needs from snack packaging, and to managing potential problems in… Read more

Müllerlight: A Successful Attempt to Tackle the Clash of the Health and Indulgence Trends

MarketLine

Dairy manufacturer Müller’s Müllerlight Inspired By cheesecake brand extension has sold over 9 million units in the UK since its launch in mid-2010. The brand appears to have been effective in solving consumers’ conflicting desires for healthy foods and indulgent foods – which is still one of the most important unmet needs for the food industry to address. The success of Inspired By highlights several ways to overcome the problem, and the rewards available to companies that do. Datamonitor’s 2010 Consumer Survey found that across all parts of the world,… Read more

Rustlers Hot Subs: The Successful Transfer of a Foodservice Concept to Retail

MarketLine

In September 2009, UK-based company Kepak Convenience Foods extended its Rustlers line of hot snacks to include a range of Rustlers Hot Subs microwaveable sandwiches. Sales over the first 12 months of the line’s launch exceeded £10m, accounting for around 10% of the UK’s retail hot snacks market. Thanks in no small part to the expansion of the Subway chain from 300 outlets in 2005 to 1,400 outlets by 2011, the UK fast food market has been reshaped: sandwiches are no longer seen solely as a lunchtime item for office… Read more

Mentos -Turning Unexpected Online Attention to Your Advantage

MarketLine

In 2006, an online filmmaking duo called EepyBird posted a video featuring an explosive mixture of Diet Coke and Mentos candy. The video rapidly became immensely popular. Mentos’ manufacturer, Perfetti Van Melle, rapidly capitalized on this sudden fame to promote the candy brand, while Coca-Cola lagged behind in its online marketing efforts. Even at the time of the initial Mentos and Diet Coke video in 2006, it was clear that online viral marketing was a vital part of the marketer’s toolbox, and the basic rules have not changed since. If… Read more