The effects of the slowing economy on the smoothie sector could boost sales for cheaper own-label and ambient brands, according to a new Mintel report. The research company says that the sector will continue to grow until 2010 when it may shrink.
It estimates that the smoothie market will be worth £282m by the end of this year, which will be an increase from £252 last year. Although the sector will continue to grow, though at a slower rate, to £305m next year, it is likely to fall to £304m by 2010.
In other findings, ad spend this year among the smoothie brands saw record growth. While main media spend for smoothies in 2006 was £4.3m, when Mintel last carried out its research, in the first six months of this year ad spend has already topped £3.7m.
TV has increasingly played a big part in the promotion of smoothie brands, with market leader Innocent, PepsiCo’s Tropicana Smoothies and Ella’s Kitchen all investing in the medium.
Innocent took a dominant 66% share of sales in the market last year, while PepsiCo’s PJ Smoothies had a 12% share. Earlier this month PepsiCo confirmed the PJ Smoothies brand would be axed by the ed of the year. Combined own-label brands recorded a share of 21% last year.
The report says own-label and ambient products can expect to benefit from tightening consumer spending, as some consumers look for a cheaper alternative to the leading chilled brands. Tropicana’s new smoothie brand, backed by a £5m advertising budget, could erode Innocent’s share. Tropicana Smoothies launched in February this year.
PepsiCo says its focus for the brand will be to take the smoothie market from niche to mainstream and reach the 70% of UK households that do not currently buy smoothies.
The Mintel report points out that the challenge now facing manufacturers will be convincing increasingly cost-conscious consumers that healthy eating should continue to be a priority.