Strategic Report
8 Finsbury Food Group Annual Report & Accounts 2018
Market Review
Corporate Governance
Financial Statements
Economic Consumer confidence has been weak for some time, and price and value will remain important. Although consumers will remain cautious and price-conscious, they will continue to want affordable treats, so pricing policies need to reflect household economics.
Grocery Consolidation has started to reshape the grocery market in recent times and this will continue. Online and discount will be the two fastest growing grocery channels, and will account for 22% share of grocery expenditure by 2023 (IGD). The convenience channel is also forecast to see strong growth.
Out-of-home In the out-of-home (OOH) market, volume growth is forecast to be negative as weakening consumer confidence and general consumer caution mean people will eat out less. The casual dining restaurant sector is likely to struggle, but fast-food outlets, coffee shops, supermarket cafés and food-to-go offers will see better growth.
Healthy Eating Consumers continue to pursue more healthy eating options generally, though indulgence is also a key trend in 'sweet-treating'. Media focus and regulatory pressure will continue to drive recipe reformulation and portion size. The ‘Better for you’ market is proliferating rapidly, with protein, gut health, low sugar, vegetarian, plant health, grains and seeds, and slow energy release all growing in popularity over recent years.
Free From The overall Free From market continues to grow, doubling in size in the past five years. Mintel forecasts it to grow by an additional 25% to £899 million by 2022. It's boosted by consumers who don’t cite a specific allergy or intolerance, but choose to avoid certain ingredients as part of a general healthy lifestyle. Dairy-free and gluten-free are the biggest sub-sectors. The Free From bakery market is valued at £129 million and has grown 14.5% year on year.
Artisan Bread The market has grown due to the perceived health benefits, the wider trend of provenance and the ‘craft' movement. Consumers respond well to products they perceive to be less mass-manufactured.
Fragmentation Social and demographic trends have a major bearing on the food sector. These include smaller households, single-person mealtimes, an ageing UK population, urbanisation, and an increasingly mobile population with less time to eat. These are fuelling the growth of convenience, online and out-of-home channels. But the growing fragmentation of consumers, channels, eating moments and needs will also translate into increasing demand for personalised products to meet individual needs. Thus single-serve and individually wrapped products are becoming more prevalent and important.
Technology Technology is fundamentally changing the relationship between businesses and customers, who are increasingly using mobile devices to make purchases. Demand for anytime, anywhere purchasing and access to information will accelerate. Online ordering is not just for the weekly shop, it is also for top-up and 'dinner tonight' shopping.
" The overall Free From market continues to grow, doubling in size in the past five years. Mintel forecasts it to grow by an additional 25% to £899 million by 2022."
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