The Publication For The Grocery Trade

Nestlé Drives Innovation In Ambient Desserts

FThe Ambient Desserts category currently boasts a significant market share in grocery, with a value of £389m. However, despite its past success, the category has reached a plateau, signifying a need for increased investment and innovation by both manufacturers and retailers. Category Insight... Everyday Puddings represents the largest segment within the category and is now worth £341.5m, with an 87.7 per cent value share. Everyday Puddings Everyday Puddings is led by Family Favourites, which has the largest value share of the segment, at 44.9 per cent. The biggest segments within Family Favourites are Custard and Rice, which represent a 32.9 per cent and 17.8 per cent share of this segment respectively. Custard and Rice are currently flat in value, although penetration in this segment is declining. Growth is in fact being driven by existing shoppers, with manufacturers and retailers capitalising on their interest in the segments by encouraging greater frequency and weight of purchase. Following the success of Nestle's Carnation brand in recent years, Nestle has launched Carnation Rice and Carnation Custard. Both are made with real cream and reinforce Carnation’s reputation for creamy and sweet desserts. This sets them apart from other brands in the segment, are made using skimmed milk. By launching these new products, Nestlé hopes to attract a younger audience to the Rice and Custard segment, by appealing to those who are already familiar with, and buying into, the Carnation brand, particularly condensed milk. The continued popularity of the Carnation brand has been driven by a highly successful marketing campaign, highlights of which include an extensive consumer press campaign last summer and a strong ongoing partnership with celebrity chef Phil Vickery. An area of growth in Everyday Puddings is lunchbox /individual serving size ambient desserts (excluding bars), showing a growth rate of 1per cent. These figures indicate an increasing popularity of lunchbox desserts amongst consumers and a growing opportunity for Ambient Desserts in this segment. By responding to the changing needs, such as the trend towards lighter meals, manufacturers and retailers can maximise profit opportunities, whilst helping to add variety to the category. The cream segment is currently flat (-0.05per cent), and is led by brand leader Carnation Evaporated Milk, which commands a 40 per cent share and is growing at 7 per cent. However, penetration is in decline in this segment. Nestlé is focusing on driving the value of the segment by trading shoppers up to the brand, supported by Carnation Evaporated multibuys on smaller and bigger sizes, which serve different shoppers (light users and smaller households for smaller size.) Dessert Creations Dessert Creations holds a smaller share of the Ambient Desserts category (12.3 per cent) and is led by Fillings, which has the largest value share of the segment, at 40.9 per cent. Overall the segment is static, and in need of investment. The leading brand within this segment is Nestlé Carnation, with a share of 46 per cent. Carnation offers a variety of dessert fillings catering for different consumer preferences, including Carnation Condensed Milk, Carnation Condensed Light and new Carnation Caramel (a Dulce de Leche filling.) Carnation’s support of this area has driven the 7 per cent brand growth. Last October, Nestlé widened its consumer audience further by targeting ethnic consumers with a Diwali PR campaign and in-store support to drive sales of Carnation at festival time. Carnation sees a 13 per cent uplift in sales in the lead up to Diwali, mainly driven by sweetened condensed milk, a key ingredient in many Diwali sweets. Nestlé drove this uplift with pallet wraps to create standout in Cash & Carries and wobblers to remind consumers to stock up on Carnation for their Diwali preparations. Nestlé's supporting PR campaign involved the development of five quick and easy traditional recipes. These include Orange Scented Gulab Jaman, Kheer Jewelled with Dried Fruit and Toasted Coconut Burfi, all designed to bring in lapsed consumers to the brand and ideal for second and third generation ethnic consumers who struggle to balance a busy work and home life, whilst also trying to maintain traditional family values. Nestlé Carnation brand manager Anna Maginness believes that awareness of usage of condensed milk is what is ultimately needed to drive growth. Maginness comments: "Although the segment is not growing, consumer interest in desserts and home baking is increasing, as demonstrated by the recent growth in Home Cooking. What is now key for both manufacturers and retailers is that we capitalise on this. Recent consumer research undertaken by Nestlé found that when it comes to puddings, people are often afraid of trying to prepare one, due to a fear of failure. They lack confidence in the kitchen, as well as the time to devote to home baking, and this is holding them back. For example, the research found that less than one in five people in the UK regularly creates homemade puddings, with almost half of people only preparing them for special occasions and 22 per cent of people never making puddings at all. "It’s therefore up to manufacturers to restore this confidence in consumers and offer quick and easy dessert solutions. This is essentially what has driven the success of Carnation. Carnation offers an easy way to create great tasting desserts, without the skill and preparation time needed for other dessert recipes. We are helping to take the fear out of creating puddings, and consumers have responded well to this." The launch of new Carnation Caramel last year has also helped to address this consumer need. A ready-made authentic Dulce de Leche, Carnation Caramel offers the perfect solution for consumers who want to make caramel based puddings quickly and easily. The new dessert filling has gone from strength to strength and is worth in excess of £45k a month. This demonstrates the need to make it easier and more relevant to today's consumers. Major Players... Ambient Desserts is a brand-led category. The top three players are: Premier Foods (32.3 per cent value share), with its brands Ambrosia and Hartleys driving the category; Nestlé is number two in the category, with dessert favourites such as Carnation and Tip Top representing a 6.8 per cent share. Own Label represents a significant value share, at 28.9 per cent. Category Investment... Recent consumer research reveals that dessert consumption is declining in the UK, as people choose to eat lighter meals, which often don’t feature a dessert. Maginness believes that it’s these changing habits in consumer behaviour that is affecting category growth. Maginness comments: "People today are much more health and diet conscious than they ever used to be. However, the Ambient Dessert category is one that is naturally chosen for enjoyment and indulgence, a fact we mustn't ignore. This therefore sets the challenge for the category - generating and maintaining category growth by appealing to increasingly health conscious consumers." One way to overcome this challenge is to focus on the indulgent nature of the category and make this more attractive to consumers. "Although people today are more aware of the benefits of a healthier diet," says Maginness, "people are also aware that eating most things in moderation is acceptable. As a category we need to appeal to people's appetite for indulgence, encouraging them to choose ambient desserts at times when they want to treat themselves or their family to a tasty pudding. This can be done by introducing more indulgent product innovation into the category, to renew consumers' interest in ambient desserts, whilst providing them with quick and easy dessert solutions. In-store Strategy... There are some simple and easy ways retailers can help to drive the growth of Ambient Desserts in-store and maximise their profits. The Essentials: • Merchandise all ambient desserts together • Allocate space according to the segment contribution to the total category (e.g. around 45 per cent to Family Favourites and 12 per cent to Dessert Creations) • Range the best sellers from Everyday Puddings and Dessert Creations in priority order and site in hotspot locations • Ensure shoppers know where to find the category fixture in-store by using clear signage Driving the Category In-store: • Optimise space for the category, allocating space by sales contribution for each product • List main brands as well as private label to drive value into the category • Renovate the category by introducing new products in order to drive trial and maintain shopper interest • Use POS to communicate offers and usage suggestions to consumers • Keep the layout of the fixture simple and follow logical decision making to allow customers to easily understand the category and shop it time-efficiently • Ensure range delivers against consumers' needs across different segments Catering for Consumer Needs... Nestlé strives to offer choice within the Ambient Desserts category, and its current range caters for the needs and preferences of a cross-section of consumers: Nestlé Carnation Condensed Milk Nestlé Carnation Condensed Milk is made from full cream milk and sugar. Nestlé Carnation comes in three formats, 397g tin (RRP £1.26), 450g tube (RRP £1.77) and 170g tube (RRP 74p.) Nestlé Carnation Condensed Light Made with skimmed milk and containing less than 1% fat, it's the lighter alternative to Carnation Condensed Milk. Available in a 405g can (RRP £1.26.) New Carnation Caramel Caramel A ready made authentic Dulce de Leche caramel that helps consumers achieve great results time after time, Carnation Caramel is the quick and easy way to create those home-made favourites like Banoffee Pie or Millionaire’s Shortbread. Available in cans of 397g (RRP £1.69.) Nestlé Carnation Evaporated Milk Nestlé Carnation Evaporated Milk comes in two formats, a 410g can (RRP £0.56) and a 170g can (RRP £0.41.) Nestlé Carnation Evaporated Milk Light Nestlé Carnation Evaporated Milk contains less than 5 per cent fat and comes in a 410g can (RRP £0.56.) Nestlé Carnation Rice A ready-to-eat rice pudding, available in cans of 400g (RRP 63p). Nestlé Carnation Custard A ready-to-eat custard, available in cans of 396g (RRP 63p). Data source IRI Nestlé Carnation Tel: 0800 6378 5385 www.nestle.co.uk