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A posh Pud for one, please: individual portions and falling promotional activity have depressed the hot serve chilled desserts sector but the dine-in trend is boosting brands' performances, says Lisa Riley.

Is Britain's love of hot desserts cooling? As the cold nights draw in, we all love a hot pud. But value sales are static - up just 0.6% to [pounds sterling]157m, and volume sales have slipped noticeably, by 5.1% [Kantar Worldpanel 52w/e 4 September 2011]. How can this be? One reason is the introduction of individual desserts, and indeed this is the only pack format in volume and value growth. While this is good news for makers of the type of indulgent single-serve product that's taken off in recent years, it's from a very small base, just 4.5% of the category.


Another reason for the stagnation is inflation, currently running at 6%. And then there's deals. Or rather, the lack of them. The proportion of hot desserts sold on promotion dropped by 7% to 47% [Nielsen Scantrack 52w/e 1 October 2011], with own label accounting for much of the slump.

"The drop in promotional activity has played a part in the flat total category performance, but the decline has primarily affected the dominating own-label part of the sector," says Jamie Fyne, category manager at Farmhouse Fare.

"We have actually seen an increase in promotions on branded products. Furthermore, we have also seen an uplift in the number of dine-in promotions featuring branded products," he says.

There seems to be no end to the phenomenon that is the dine-in promotion, and branded desserts are reaping the benefits, multipacks in particular, of inclusion by retailers. Own label is still king of des serts, but - in contrast to the cake category, where shoppers are forsaking brands for own label in droves - its share of this category is down by 0.8%, whereas brands recorded 7.7% growth, thanks in large part to dine-in.

A growing number of brands are finding their way on to the dine-in fixture, with consumers increasingly opting for branded products, which they see as premium, yet which still fall within the same deal. "Customers trading down from a restaurant meal are seeking to cushion the blow with the best available on the supermarket shelf, often opting for ultra-premium branded desserts like GU," says consultant Catherine Little of brand agency The Value Engineers.

Another factor fuelling the performance of brands is the demographic profile of the market, which is broadly more affluent (60% ABCi) and more mature (60% aged 45+) than the grocery average, which partially accounts for M&S, Waitrose and Sainsbury's overtrading.

The more upmarket brands are adapting to this environment. GU relaunched its entire range in May, with simpler, updated packaging and the launch of GU Singles, all backed by a [pounds sterling]2m push, including the brand's first national TV campaign. It has also leapt on the limited-edition bandwagon with its baubles (see right), simultaneously targeting the seasonal market.

And last month saw rival Farmhouse Fare's first on-pack promotion, backed by new owner Hain Celestial. The brand will be hoping to capitalise on the success of its Lovetub sharing pots range, which has clocked up [pounds sterling]800,000 in sales since it hit shelves in September 2010, they say. A single pots Lovetub range hit shelves this September.

Brands are clearly enjoying their moment in the sun, but the retailer own labels aren't taking it lying down. Marks & Spencer, one of the most successful proponents of dine-in, is squaring up to Farmhouse Fare and Gii with its new Pud in a Pot range of individual desserts (see right).

"Customers told us they wanted individual hot puddings to enjoy midweek during the winter months, so we came up with a range of delicious desserts for one" says product development manager Emma Broughton.

M&S is by far the biggest retailer when it comes to hot desserts - it increased its market share by 5.6% this year to 31%, while both Morrisons and The Co-operative are struggling to keep up, losing share to the tune of 26.3% and 13.7% respectively. This is in stark contrast to the 30.9% and 39% growth the previous year, when M&S's year-on-year share dropped 183% [Kantar].

Little puts the change in fortunes down to Morrisons and The Co-op catering well for the middle market, while being less prominent in premium own label, and therefore being less geared towards "high-end moments, such as the popular twin pudding occasion".

Morrisons, however, points to its own dine-in initiatives, with fixtures in 250 stores. The supermarket has also relaunched its entire Hot Eat Pudding range, adding new lines and redeveloping existing products, and will offer "a wider range of products on promotion next year".

But it will take more than the retailers to get Britain buying hot desserts again. "Less than half the population currently buys into the category and the challenge remains to encourage consumers to buy on a more regular basis, as well as bringing new people into the market," says Jeremy Hughes, marketing manager at Aunt Bessie's. Desserts are bought as a treat, he points out, adding that feature and display are of huge importance to a product that is rarely a planned purchase.

NPD is crucial, too, says Little, urging producers and retailers to up the ante when it comes to NPD and creating excitement.

"With the renaissance in Great British desserts, I'd expect to see more old-fashioned favourites, but given a luxurious twist - clotted cream rice pudding for example," she says, adding that producers also need to focus on multipacks that cater to a range of tastes within the same family.

But it's not all about tradition, admits Little. She expects the dine-in promotion to rumble on, but predicts that high-end retailers in particular will create excitement and drive the trend by attempting to emulate the restaurant experience more closely.

"This could perhaps be sparklers with the desserts or promotion alongside pudding wines. Celebrity endorsements may also become more widespread," she says.

Bling desserts - the mind boggles.

* Hot serve chilled desserts is worth [pounds sterling]157(11, growing at 0.6%, due largely to an average price rise of just over 6%. Slightly more than half the population buy into the category, but there has been a fall in new shoppers entering and consumers are buying less, and less often.

* While consumers may cut back on luxuries in a recession, in-home treats often thrive.

* Sponge puddings and pies/tarts have the biggest value share of the market, both growing above the total market level. From a small base, rice pudding and spotted dick are in double-digit value growth while souffle and bread & butter pudding are both in significant value decline.

* Own-label desserts account forthe lion's share of the market, with branded - up 7.7% in value - representing less than 20% of spend.

Matilda Phippard



The take-home snapshot is produced by Kantar Worldpanel Kantar Worldpanel monitors the grocery retailer take-home purchasing habits of 25,000 demographically representative British households. Call 020 8967 0007 or visit for details.


The take-home snapshot is produced by Kantar worldpanel. Kantar Worldpanel monitors the grocery retailer take-home purchasing habits of 25,000 demographically representative British households. Call 020 8967 0007 or visit for details.



It's been a busy year at GO - first a brand revamp, then the launch of the Singles mousse range and now limited edition Christmas baubles. The range comes in both sharing and individual formats, with the large version in Splendidly Sumptuous Cherry 8 Chocolate and Gloriously Glam Raspberry 8 Chocolate (rsp: [pounds sterling]15 for eight to 10 servings). The individual bauble, in Fantastically Festive Cherry 8 Vanilla and Deeply Decadent Raspberry 8 Vanilla, retails at 12 for a six-pack. Available from mid-December in key retailers.




The four-strong line-up (rsp: [pounds sterling]1.49) of sticky toffee, hot fudge, apple & blackberry granola, and rhubarb & ginger rice pudding in individual pots mimics moves this year by the likes of Gu and Farmhouse Fare to offer individual pudding portions. So far, the rhubarb & ginger rice pudding has proved the most popular, says M&S.




A combination of raspberry compote-topped sweet sponge with a layer of vanilla iced parfait encased in light meringue (rsp: [pounds sterling]3.99), the dessert takes just five to eight minutes to oven bake from frozen. Available from Tesco, Asda and Sainsbury's, it is being positioned as ideal "for all occasions, from everyday family meals to posh dinners".




This Cumbria-based business made its reputation with Sticky Toffee pudding. This new three-strong premium dessert range offers a modern twist on old favourites: Black Forest Pudding, Sticky Toffee Apple Crumble and Lemon Drizzle Pudding. The range is currently in Waitrose, Selfridges, Harvey Nichols, Fortnum & Mason and independents (rsps: [pounds sterling]1.50 to [pounds sterling]5.25).

Desserts: 52w/e 4 September 2011

 VALUE [pounds sterling]m SHANGE y-o-y

Sponge pudding 47.2 1.3

Pies and tarts 34.7 7.1

All others 20.9 1.6

Crumble 11.9 -3.4

Sticky pudding 9.5 -4.6

Bread & butter pudding 9.5 -10.2;

Souffle 7.8 -12.9

Rice pudding 7.0 10.9

Pancakes 6.0 -1.3

Spotted dick 2.0 13.2

Source: Kantar Worldpanel


Hot serve chilled desserts: 52w/e 4 September 2011

 [pounds sterling] y-o-y % [pounds sterling] y-o-y %
 m (m)

Multipacks 82.0 4.2 105.6 -5.7

Sharing 68.0 -4.8 56.3 -6.0

Individual 6.6 19.6 7.6 12.1

TOTAL 156.6 0.6 169.6 -5.1

Hot serve chilled desserts: 52w/e 4 September 2011

 grocery category overindex y-o-y %

Marks & Spencer 3.1 31 1,000 5.6

Waitrose 4.1 7.7 188 4.7

Sainsbury's 14.9 19.5 132 2.5

The Co-operative 6.0 5.9 98 -13.7

Tesco 27.1 23 85 0.6

Morrisons 11.4 5.1 45 -26.3

Asda 14.8 5.9 40 8.5

Indies & symbols 1.4 0.2 14 35

Iceland 1.9 0.2 11 1.6

Hard discounters 4.9 0.4 8 22
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Comment:A posh Pud for one, please: individual portions and falling promotional activity have depressed the hot serve chilled desserts sector but the dine-in trend is boosting brands' performances, says Lisa Riley.(FOCUS ON: HOT DESSERTS)
Author:Riley, Lisa
Geographic Code:4EUUK
Date:Dec 10, 2011
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