• Canned food has suffered
    from an old-fashioned, processed image compared to alternative fresh, frozen
    and chilled foods.
  • The canned food market
    has been characterised by rampant price discounting, with many products used
    as “loss leaders”.
  • Product developments
    are focusing on 100% natural, low-fat/lean and organic ingredients in an attempt
    to respond to health concerns amongst many populations.
  • Packaging developments
    revolve around cartons, particularly in the soups sector, and ring-pulls for
    easy access to cans.
  • Vegetables form the
    largest sector in the majority of key markets as they constitute the basis
    for meals in many traditional diets.
  • The versatility and
    health attributes of tuna have combined with high prices caused by shortage
    of supply to give the fish sector a relatively high value share in most key
    markets.
  • The Bovine Spongiform
    Encephalopathy (BSE) scare, emanating from the UK, negatively impacted the
    meats sector and meat-based ready meals.
  • Soups proved to be one
    of the most dynamic sectors as new products were marketed as complete meals
    and greater confidence amongst consumers underpinned trading up.
  • Ready meals, particularly
    non-pasta-based varieties, offer “meal solutions” as the trend towards light
    meal occasions intensifies.
  • The canned food market
    is largely fragmented, with a number of multinational players present in each
    key market, although their presence tends not to extend across all sectors
    of the market.
  • Private label penetration
    is high in most key markets due to the strength of multiples and the commodity
    status of many canned food products.

Canned Food by Volume

  • The US market, at 3,780,000
    tonnes in 1999, was the largest of the seven key markets for canned food,
    approaching three times the size of the French and UK markets. In terms of
    per capita consumption, the popularity of canned food, particularly vegetables,
    in France was more evident in 1999, when the French consumed over 24kg per
    head, almost double that of US consumers.
  • Only two of the seven
    key markets recorded positive volume growth over the period 1995-1999, respectively
    9% and 5% in Spain and Japan. The stagnant nature of many canned food markets
    is reflected in the contraction in volume terms evident over the review period,
    with consumption falling by some 6% in the US, the UK, France and Italy.
  • Spain was the best performing
    key market over the review period, with volume growth of 9%. New product development,
    which included the introduction of new varieties of canned food and the repackaging
    of established products, served to stimulate consumer interest and boost demand
    throughout the latter part of the 1995-1999 period. Other important factors
    stimulating growth included consumer trends favouring convenience products,
    as Spanish lifestyles became increasingly hectic and more women entered the
    workplace.
  • The increasing westernisation
    of the Japanese diet has had a significant influence on market demand. The
    popularity of Western types of products has been the impetus for recent launches
    and has afforded continued, if slow, volume growth. As more and more Japanese
    have travelled abroad in recent years, they have demanded similar dishes in
    canned form, leading to a rise in demand for canned ready meals and pre-prepared
    side dishes.
  • The German market for
    canned food was stagnant over the review period. Under increased competition
    from related products such as frozen food, volume sales of canned food declined
    by 3.5% between 1995 and 1999. Cans are one of the oldest ways of preserving
    food industrially, dating from a time when not all households had refrigerators
    or freezers. Today, frozen and chilled foods which compete against cans tend
    to be considered more convenient and of higher nutritional value. Hence, competition
    from these related markets has had a detrimental effect on sales of canned
    food.
  • Canned food in the US
    experienced a 5.6% decline in volume terms between 1995 and 1999, due chiefly
    to a fall in consumer demand. Rising disposable incomes in recent years have
    resulted in shifts in consumer preference from canned foods to, primarily,
    fresh foods. In essence, the heart of the problem of sluggish growth in the
    canned food industry is the consumer perception of canned food as old-fashioned
    and having commodity status. The increased availability of fresh foods at
    all times of the year has exacerbated this negative consumer perception.
  • As an industry based
    on an innovative post-war method of stabilising fresh products and affording
    them a greater shelf life, canned foods have continued to suffer an outdated
    image in the UK. The attractiveness of canned foods has been further dampened
    by increasing health concerns on the part of the consumer, most dramatically
    portrayed by the drop in sales sparked by the BSE scare of 1996. Consumers
    have stepped up their efforts to maintain a healthy diet and as such are increasing
    their consumption of chilled and fresh products, to the detriment of canned
    counterparts. Renewed growth in the frozen food market, a much closer substitute
    for canned food, has served to exacerbate the already poor image of the can.
  • The French canned food
    market is considered to have reached saturation, with consumers mainly buying
    cans as a store cupboard standby, rather than using them in everyday cooking.
    More recently, canned food has suffered from its “processed” or artificial
    image at a time when the general trend is towards traditional food, and all
    things natural. Canned food has thus faced increasing competition from frozen
    and chilled foods, which are looked upon as higher quality, fresher products.
  • The market for canned
    food in Italy has been lagging behind other food markets in terms of innovation.
    Frozen, chilled and dried food are all perceived as more modern by consumers
    and are characterised by a much greater degree of innovation. In addition,
    some dynamic segments related to canned food, such as tomato paste and passata,
    are excluded from this report, which adds to the negative picture.

Volume Sales of Canned
Food by Country 1995-1999

‘000 tonnes 1995 1999
France 1,511 1,419
Germany 1,300 1,255
Italy 522 488
Japan 637 669
Spain 409 446
UK 1,480 1,391
US 4,003 3,780

Source: Euromonitor
Market Direction

Canned Food by Sector
– Volume and Value

  • Vegetables constituted
    the largest sector of the canned food market in volume terms in five of the
    seven key markets in 1999, with shares in these five markets ranging from
    29.2% in the US to 63.2% in Italy. In the remaining markets, fruits formed
    the largest sector in Japan, with a volume share of 32.8% in 1999, and fish,
    a major component of the traditional Spanish diet, accounted for the largest
    volume share, 55.2%, in Spain in 1999.
  • Vegetables constituted
    the largest sector of the canned food market in value terms in four of the
    seven key markets, with shares ranging from 23.1% in the US to 36.9% in France
    in 1999. The vegetables sector is most prominent due to the presence of well-established
    subsectors such as tomatoes and pulses, and the use of vegetables as the base
    ingredients for more complex meals. The fish sector claimed first position
    in the remaining three key markets with market value shares ranging from 36.9%
    in Japan to 65.2% in Spain. The ready meals sector claimed second position
    in three of the seven key markets with market value shares ranging from 17.2%
    in the UK to 27.0% in France. The higher value share taken by both the fish
    and ready meals sectors reflects the added-value nature of many of the products
    which comprise these sectors and their higher average unit prices.
  • Within the vegetables
    sector, “other vegetables” which exclude both pulses and tomatoes, tend to
    account for the largest share of sales in both volume and particularly value
    terms. There are a couple of exceptions, namely Italy, where tomatoes dominate
    the vegetables sector due to their widespread use in traditional Italian cuisine.
    The UK and the US are the only key markets in which pulses outsell tomatoes,
    and in the latter pulses comprise the largest subsector. In the UK, pulses
    maintain a strong position due to the enduring popularity of baked beans,
    despite declines in value share as a consequence of a price-busting “beans
    war” in the mid-1990s.
  • The versatility and
    universal popularity of tuna is responsible for this type of fish dominating
    sales of the overall fish sector in all seven key markets. Value shares have
    generally increased due to demand outstripping world supply, leading to a
    hike in prices.
  • Segmentation within
    the meats sector varies across the seven key markets, with canned products
    leading ahead of jars in France, and hot packs comprising the larger subsector
    in the UK, ahead of cold packs. The scare surrounding BSE had a major impact
    on the meats sector in all key markets, with red meats losing out to white
    meats, particularly poultry.
  • Salads and cocktails
    lead the fruits sector in Italy and the UK, whilst citrus fruits lead in Japan,
    and peaches comprised the largest subsector in the US in 1999. Fruits in syrup
    are the larger subsector in France and the UK, although in both instances
    the alternative “in juice” subsector was the better performer over the review
    period.
  • No apparent segmentation
    exists in the soups sector that can be applied to all seven key markets. Thus
    cartons lead in France following the format’s success in other food markets,
    such as milk. Attempts to revitalise the Italian soups sector have also involved
    the introduction of carton packaging. Carton packaging forms a growing element
    of the soups sector in the UK, as chilled products have not emerged as a direct
    substitute for canned versions. Chilled soups tend to be consumed within a
    few days of purchase, whilst ambient products can be consumed later.
  • The ready meals sector
    is generally dominated by other canned ready meals ahead of pasta-based products,
    although in Italy fish-based products outsell all other subsectors. Traditional
    dishes tend to account for the bulk of ready meals, with products such as
    tripe with chick peas particularly popular in Spain. In the US, “other” ready
    meals have been promoted as “meal solutions” and have benefited from the increasingly
    hectic lifestyles of consumers and lack of time for home-cooking.
  • Desserts account for
    the bulk of the “other canned food” sector in most key markets, although in
    Japan and Spain, more traditional products such as omelette-style meals in
    Spain form the largest subsector. Cream desserts constitute the leading subsector
    in France and the UK, whilst both the German and Italian markets are characterised
    by the complete absence of an “other” canned food sector.

Volume Sales of Canned
Food by Sector and by Country: % Analysis 1999

% volume
France
Germany
Italy
Japan
Spain
UK
US
Vegetables
58.8
50.4
63.2
25.0
27.3
46.7
29.2
Fish
7.7
5.8
23.6
22.2
55.2
6.4
7.2
Meats
1.6
11.9
4.5
5.3
4.6
6.8
10.2
Fruits
5.7
14.0
7.4
32.8
1.8
8.1
10.0
Soups
6.1
4.5
1.1
5.1
0.5
16.0
18.1
Ready meals
18.7
13.5
0.3
1.4
10.3
12.3
17.6
Others
1.3
8.1
0.2
3.7
7.6
TOTAL
100.0
100.0
100.0
100.0
100.0
100.0
100.0

Source: Euromonitor
Market Direction

Note: Figures may not sum
due to rounding

Canned Food – Trends
to Watch

  • The burgeoning popularity
    of fresh, chilled and frozen alternatives will have an adverse impact on demand
    for canned food.
  • Changing eating habits
    with fewer traditional meal occasions and increased eating away from the home
    will hit sectors of the canned food market which fail to respond and evolve.
  • New product innovation
    will need to focus on packaging formats for modern lifestyles and recipes
    with traditional aspects.
  • Continuing health concerns
    will underpin demand for organic products, which is likely to be met only
    by the major players, and those with the resources to develop sales in niche
    areas such as organic produce.
  • Packaging developments
    will revolve around cartons, in sectors such as soups, and ring-pulls in most
    sectors.
  • Many canned products
    occupy niche sectors, and therefore low demand and high prices form a significant
    barrier to dynamic growth.
  • Intense competition
    between manufacturers, and rising private label penetration will combine to
    keep price increases to a minimum over the forecast period.
  • The ongoing dominance
    of distribution by multiples and discounters will also have a negative effect
    on value growth, as the commodity image of canned products becomes all-pervading.