Back to school can be a lucrative category for retailers if they get balance right. Aidan Fortune looks at how retailers can swot up on sales.
While school’s out for millions of schoolkids across the UK, with six blissful weeks of freedom to look forward to, for retailers it’s time to get your head down, do your homework and prepare yourself for September and the back-to-school market.
The first lesson to learn is that it’s important you stock a range that will appeal to both children and their parents. It’s likely that the former will have a big sway over the choice of products, while the latter will be paying for them, so you can’t risk alienating either party in the buying process.
According to Selena Taylor, trade communications manager at Coca-Cola Enterprises, health is still a priority for shoppers when buying products for children’s lunchboxes, especially when it comes to the soft drinks element. “Parents are growing increasingly conscious of what they put into their children’s lunchboxes, and health, vitamins and nutrients are still the main focus,” she says.
“They will be packing lunchboxes full of fruits and healthy snacks, but will also be keen to choose products their children will enjoy the taste of. This often leads families to opt for pure fruit juices or flavoured water variants that appeal to a younger market, while also providing them with the vitamins they require.”
Taylor points out that if retailers can fulfil the health need as well as the taste test, they can take advantage of this lucrative market. “About 5.5 billon packed lunches are prepared for schoolkids every year - it isn’t surprising that in 2010 parents spent £736m on back-to-school shopping,” she adds. “This presents a great opportunity for retailers to drive sales of back-to-school lunchbox favourites such as juice drinks.”
If your customers are making the effort to make sandwiches at home, they’ll want to keep them fresh and mess-free on their journey into work or school.
Richard Shonn, managing director at 151 Products, says sandwich bags is one product line that is easily forgotten and that retailers can cash in if they stock a suitable range.
“Back to school is a key focus for retailers who are looking to maintain a topical and timely offering to their core customer base,” he says. “In order for local shops to keep up their reputation for being the one-stop shop for general grocery and non-grocery needs, it’s important that they adjust to trends by stocking up on seasonal products such as sandwich bags.”
Shonn believes that practical and colourful items are the way forward when it comes to attracting both parents and children to non-food products in the back-to-school category. He adds: “151 Products has launched the kids’ coloured sandwich bags product under the popular Sealapack brand, presented in a brightly coloured box to create maximum shelf appeal. The box of 40 bags features an illustrated monkey character and includes fun stickers to appeal to children and increase pester power.”
Another big player in the kids’ soft drinks arena is Robinsons Fruit Shoot from Britvic. But be warned: Robinsons Fruit Shoot and Fruit Shoot Hydro packs are currently being recalled due to a design fault with the bottles’ Magicap, and must be removed from shelves immediately.
However, Fruit Shoot My 5 is unaffected by the recall, and is certainly worth making shelf space for, given that it puts a big tick in the health box. “The consumer trend towards health and wellbeing has significantly affected the school lunchbox market, with parents opting for healthier drinks for their children, and schools creating lunchbox guidelines,” says Britvic impulse commercial director Kate Fletcher. “Products such as Robinsons Fruit Shoot My 5 that clearly communicate the ‘one of your five a day’ message are ideal for retailers to stock, as they not only provide a healthier solution with hydration benefits, but also satisfy children’s demands for taste and enjoyment.”
Vimto certainly isn’t missing a trick. Next month, the brand will be launching an extension of its summer cordial campaign with a nationwide ‘back to school’ initiative in women’s magazines to promote its 250ml Original Still Tetrapak carton to mums. “Format has a major impact on lunch time purchase decisions, and the Vimto Tetra carton is compact enough to fit in a packed lunch box and contains the right amount to satisfy children’s needs on their breaks,” says Vimto Soft Drinks head of marketing Neil Gibson.
Helen Cridge of FrieslandCampina, which manufactures Yazoo, points out that parents will be on the lookout for products that meet school guidelines. “A healthy school lunch should contain a mix of foods, and by including products such as Yazoo it helps towards the recommended daily calcium intake for children,” she says. “We always ensure that our products comply with the relevant Education Nutrition legislation and are labelled to communicate this.”
To coincide with the back-to-school season, Yazoo will be launching a pricemarked pack of three x 200ml bottles for £1.
“As a university store, we sell a lot of stationery - about 5% of turnover throughout the year. This doubles in Freshers’ Week and we’ll sell up to £6,000-worth of it then.
“We sell about 1,500 sandwiches and 1,000 filled baguettes on a weekly basis. From 11am, when the first lectures finish, till 1pm, the store is extremely busy with sandwiches and snacks being the biggest sellers. I trialled sushi in a £2.99 tray earlier this year and it flew off the shelves. I sold 140 trays in the first week. The company unfortunately went out of business so I’m still on the lookout for a new supplier.
“Any business keen on making the most of the back-to-school trade should make sure they review their ranges and get rid of slow sellers in the weeks leading up to it.”
John Cuthbertson, Premier, Dundee University
Ivan Cross, snacks market strategy and planning director at UBUK, says that retailers who don’t heed the health warning may be losing out. “A few years ago consumers were specifically searching out healthier snacks, but now they simply expect them,” he says. “Convenience retailers who don’t stock a good range of healthier lunchbox fillers will miss out.”
In order to take full advantage of this trend, brands have been changing their recipes to suit. Between 2005 and 2011, the average saturated fat content of UB’s range of snacks dropped from 14% to 4%, for example.
And it isn’t the only one making adjustments. Kraft has been working hard to make its Dairylea range better for kids. “Dairylea has always been a lunchbox favourite for kids and mums alike, whether it’s as a spread in sandwiches, or a lunchtime combination,” says Susan Nash, trade communications manager at Kraft Foods UK.
“The past two years have seen us working hard to improve its ingredients and nutritional qualities, reducing salt and emphasising the absence of added artificial colours, flavours and preservatives, in response to a consumer shift towards fresher, more natural products.”
To convey this health message, Dairylea packs have also had a makeover, with a new design that alerts consumers to the benefits of the product’s updated recipe.
New cheese on the block Chedds, from Cathedral City, was launched last year and is now worth £5.5m (Nielsen Total Market MAT week ending March 28, 2012). It is currently backed by a TV campaign designed to attract more mums.
Another new savoury product hoping to make the cut into kids’ lunchboxes is Mini Ritz. Nash believes that lunchbox treats can be a little different. “Snacks and treats don’t have to be sweet, and Mini Ritz can be a great alternative to crisps in the lunchbox,” she says. “It’s a growing brand that customers love, and convenience retailers should make the most of this by including it as part of the back to school occasion.”
Premier Foods director of commercial strategy and planning Richard Martin believes that convenience will be key to a successful back-to-school season. The company recently invested £10m to support its new Ambrosia rice snack pots which were released earlier this year and have aims to become a lunchbox staple.
FrieslandCampina’s Cridge believes retailers need to get in early with their back-to-school offerings in order to make the most of the market. “Mums like to be prepared and often start shopping for uniforms as early as July,” she says. “Stationery is next on the timeline, with food and drink items targeted from the middle of August onwards, just before children go back to school. Mums are always looking for new ideas so it is essential retailers capitalise on back to school throughout the summer.”
Vimto Soft Drinks marketing manager Emma Hunt also advocates an early start and recommends showcasing your range with a dedicated back-to-school display. “Retailers should be ramping up their back-to-school range as soon as the holidays begin, to capitalise on early shopping habits. Shoppers will be automatically drawn to an eye-catching visual display, particularly if this includes well-known brands. And cross-purchasing is just as relevant for back to school as any other seasonal event. Shoppers will be looking to stock up on a wide range of items - from soft drinks and food, to stationery and lunch boxes.”
Is stationery a neglected and overlooked section in your store? If so, you aren’t alone, as Henkel managing director Simon Duggan-Hill says that the stationery offering in stores often leaves a lot to be desired.
“We have increasingly identified convenience as an important part of our business, but a typical c-store tends to have an irregular, indisciplined range, dominated by a big over-index on private label,” he says.
“Shoppers are looking for brand leaders such as Pritt and Sellotape, but there isn’t enough space given to them in this market.”
He adds that even at the main selling times the category is overlooked. “The key times of year for stationery are Christmas and back to school, yet you can walk around some c-stores at these times and see nothing going on,” says Duggan-Hill. “There are also lots of other occasions where crafting, creative play, or home-made items can be huge: Halloween, Mother’s Day, Easter and so on. These occasions are a fantastic opportunity for c-stores to sell the right materials.”
For the 2012 back-to-school season, stationery brand 151 Products has expanded its Chiltern Wove range to include A4, A5 and A6 notepads, and drawing and sketching pads, retailing from £1. It has also unveiled a new Arty Crafty range of crayons, felt tips, colouring pencils, paints and modelling clay for primary school children.
Of course, what would a lunchbox be without a sandwich? Time for a little history lesson. In 1762 the fourth Earl of Sandwich called for one of his servants to prepare some beef in between toasted bread so he could continue playing cards with one hand, and thus the first official sandwich was served. Some 250 years later and the sandwich remains a staple of lunchboxes around the country, with more than 11.5 billion consumed in the UK every year (British Sandwich Association).
Chicken is the most popular filling, while egg and ham have made progress over the past 12 months and feature in the top half of the list of most popular ingredients. For sandwiches made at home, ham and cheese are the most popular.
While the Earl of Sandwich may have had enough cash to spare to spend his time playing cards while servants prepare snacks for him, it’s not the case for the rest of us. According to research by Pilgrims Choice and Censuswide, more than 60% of the population now regularly choose to make their own lunches with 45% stating saving money as the main reason for it. The average consumer saves £29 a month making their own packed lunch and eating ‘al desko’ - that’s the equivalent of £13bn collectively a year.
Warburtons category strategy controller Martin Baptie says that in these cash-strapped times, consumers will look to save money by preparing lunches at home, and that retailers can benefit from this.
“Lunchboxes and sandwiches become even more important during difficult economic times as consumers seek to save money and work to tighten budgets by bringing food in from home,” he says. “Sandwiches continue to reign as the UK’s number one meal, featuring in almost 80% of weekday lunches. They remain a popular choice for parents, with sandwiches featuring in 80% of children’s packed lunches.”
It’s also important to note that this has grown over the past two years. According to Kantar data, the number of children eating bread as part of their lunchbox has grown 9% over the past two years.
And with this level of penetration in the lunchbox market comes solid sales for retailers. “Seeded, brown and half & half breads are all sectors that are in positive value growth, 1.7%, 1.5%, and 11.7% within impulse stores respectively (Nielsen Total Impulse 52 weeks ending May 26, 2012).
Good to go
It’s not all about the kids as the adult lunch market offer retailers a big opportunity, too.
CCE’s Selena Taylor points out: “Some 56% of shoppers use convenience stores for their lunch and research reveals that 75% of shoppers would buy into a full meal deal, but currently 70% only buy into one lunch category such as sandwiches.
“The key reason for shoppers not buying into meal deals during lunchtime is that they don’t notice them and are looking for quick ‘grab and go’ food, so offers and deals must be clearly communicated to be effective.”
She adds: “Almost 90% of shoppers say meal deal items must be positioned together to encourage purchase - ideally in a dedicated bay.”
UBUK’s Ivan Cross urges retailers to think carefully about their meal deal offering. “Cross-selling products with meal deals can be easily implemented within any store, regardless of size. The opportunity to cross-sell products can enable convenience retailers to significantly increase sales, but it’s important for them to ensure that any meal deals or promotional offers are clearly signposted.”
Country Choice marketing controller Stephen Clifford also advises any retailer who does stock meal deals to make sure customers know about it. “Ensure you have oversized shelf-talkers and posters near all the host products in the meal deal,” he says. “Other methods could include the use of window vinyls and A-boards outside. If the retailer is near a busy office or factory then they might consider a leaflet drop or a coffee loyalty card that offers every sixth cup free.”
It’s also vital you don’t neglect traditional white bread. According to Nielsen data, the Warburtons 800g Toastie was the biggest-selling SKU in the category, worth £113m.
In order to further sales in the white bread sector, Warburtons has introduced White Plus Wholegrain and White Plus Milk & Calcium, designed to appeal to consumers looking for a healthier white bread option.
Sandwich alternatives such as pittas and wraps are growing in popularity and are the main drivers behind the growth of bakery goods at lunch. Indeed, they are the fastest growing sectors within bakery, growing at 31.6% in volume and 37.7% value year on year within impulse stores (Nielsen).
To capitalise on this growing demand, Warburtons has unveiled Sandwich Pittas and has extended its Square(ish) wraps and thins range to include brown and seeded variants. Baptie comments: “Lunch is the biggest meal occasion for bakery and while demand for bread continues as a staple for the traditional sandwich, shoppers are increasingly seeking convenience and choice, as they search for new and exciting alternatives.
“Reasonable promotional levels combined with the correct mix of products and mechanics, and a secondary display, can capitalise on this key shopping mission. Achieving the best combination of these will deliver great service for shoppers and culminate in positive sales growth for the category.”
Allied Bakeries category director Guy Shepherd agrees that customers are looking for diversity. It launched the Kingsmill sandwich alternatives range in 2011 and it is now worth £8m annually in impulse. The range includes Kingsmill Pockets, Wraps and Deli Softs.
Shepherd points out that rolls have also grown in popularity of late. “Rolls are a great lunchbox option, as they’re not only easy to prepare but easy to store and eat too,” he says. “Inclusion of Kingsmill rolls in lunchboxes has leapt by 17 million consumption occasions in the past two years. Products such as these offer retailers a great way to give consumers an ‘all under one roof’ shopping experience in their local convenience store and capitalise on growing demand for products in this category.”
“For my lunch I normally eat a cheese and ham sandwich, a snack bar, Pom Bear crisps, and squash. The school gives me fruit every day for my morning snack. I’m not allowed chocolate, sweets, cake or fizzy drinks - if you bring in things like that the teacher will take it from you and give it back later. Some days I have school dinners, but I prefer having a packed lunch because lots of my friends do.”
Finlay, aged 5, Lewes, East Sussex
Cuisine de France retail communications manager Laura Smith believes that retailers should be using the back-to-school rush to capitalise on bakery products. “Back to school is a great time of year for retailers to optimise sales of bread and bakery products,” she says. “These can also be filled with interesting and healthy fillings, which offer something other than the staple square bread sandwich.
“Retailers can merchandise their bread offering with linked deals and back-to-school offers, alongside a variety of filling options to try and upsell and inspire parents with new ideas. This will help to not only drive sales at the bakery fixture, but also create more shopping choices for customers and encourage children to both look forward to and enjoy their lunch.”