There is wide range of companies operating in this sector, from large multi nationals to small independent sandwich parlours. However only large manufacturers and suppliers are profiled.
Greencore Group Plc
It is Europe’s biggest manufacturer and supplier of not only sandwiches but also other convenience food to industrial sector, food service and retail segment.
Greencore was sandwich supplier of starbucks, but recently they have lost the contract , however greencore now supplies sandwiches to spur and londis and hence have minimised their losses considerably.
Gregg’s is the UK’s biggest bakery retailer. It operates more than 1200 stores in the country. Each store of Greggs prepares fresh sandwich in the respective store. Wide ranges of savoury and sweet products are sold as well. Local specialities of the region are also offered.
Greggs have massive expansion plans for the future.Greggs have opened four stores in Belgium as well. Greggs is investing £ 150,000 to open a store at Glasgow airport.
In the year 2006 Greggs launched its Healthier option range of sandwiches, to target the share of health conscious consumers, as the sale was on decline in that period. Following the launch steady increase in sale was noted, in just nine weeks strong growth of 3.9% was seen.
The subway is a fast food retailer with over 28,000 stores in the world, employing more than 150,000 employees. In UK and Ireland subway have more than 1100 stores and is opening around 20 stores every month.
The Subway’s ‘under 6gms of fat’ sandwiches experiences cult following among consumers because a student Jared Fogle lost 17.5 stones by just eating Subway’s sandwiches for an year, combined with exercise.
Pret A Manger (Europe) Ltd
It is an independent food and drink retailer, specialising in sandwiches made from natural and preservative free ingredients. Everyday it donates left over sandwiches to charity, and makes sandwiches fresh everyday.
Pret A Manger Operates more than 150 restaurants in the UK and have recently opened more a dozen restaurants in New York to test possible expansion to USA.
Other Big sandwich manufacturers and suppliers in UK are
Northern Foods plc
Samworth Brothers Ltd
Buckingham Foods Ltd
Food Partners Ltd
Freshway Foods Ltd
Gibson’s Foods Ltd
The Sandwich Factory Ltd
two companies dominates retail sandwich market of UK, Greggs and The Subway controls more than 60% of the market share. Prêt A Manger is also one of the big players, apart from these companies the market is highly fragmented.
Greggs have recently lost some market share due to slower expansion rate and on the other hand The Subway has been rapidly gaining the market share
Consumer is increasingly becoming aware of the fact that white bread is not good for health. The consumer is gaining more and more information on what is healthy for the human body and what is not. Number of consumers claiming who eats lot of bread declined from almost 50% to 43% in the year 2003. As consumer’s understanding of healthy and unhealthy food is increasing this trend of decline could continue.
Consumer is also becoming aware of the ill effects of additives and preservatives on health. Consumers are looking for options which are prepared using natural ingredients and are preservative free.
Healthy eating options are widely offered to the consumers. 25% of the consumers are always looking for lite/diet versions of the popular foods and drinks. Healthy fillings, low fat dressings, whole wheat breads etc are incorporated so as to target these consumers.
Going out for lunches requires spare time and most consumer are time poor these days, this means consumer are switching to other alternatives like take away. Consumers have limited time to act and decide and appreciate the brand they could identify gives them selected choice option. For example, a brand with only health friendly products, gives consumer confidence to consumer to choose anything from their range.
Consumer is increasingly wishing to cook at home. The number of TV food shows and books which introduce consumer on how to cook quality quick food at home are one of the biggest reason behind this rise.
As more people cook at home they leave more leftovers which can be consumed as a lunch on the next day.
Health concerns also play big role in deciding what consumer is having for lunch. Consumer make sure they are having either healthy sandwich or opting for other healthy lunch option.
Consumers are becoming more ethical by the day in terms of environment and animal welfare. Consumer are looking for packaging which does not harm the environment, and in fillings they are looking for free range meats and eggs. Companies will to have to consider these aspects so as to make sandwich an everyday option. Sourcing local products may satisfy some customers ethical responsibility regarding CO2 footprints of a product.
Inflation of food prices has great impact on the sandwiches, as prices of meat, bread and dairy products rises.
Although sandwiches are not high priced food items, but if purchased regularly it accounts significant cost and consumer may look out for option of bringing packed lunch from home.
Various global factors have led to increase in price of wheat. Growing populations of developing world are consuming more grains and some proportions of crops are kept apart for bio fuels have led to the increase.
As meat and dairy animal are fed on grains so increase in the price of grain will lead to increase in the price of meat and dairy products as well.
The proportion of population above the age of 65 is increasing. As consumer retires they will have more time to cook so the sale of sandwiches will decline.
The change in the employment in the working population have been noticed, now more jobs are based in the offices situated in the cities, which are in the easy reach of sandwich retailers.
Consumer is also working longer, this gives a potential advantage to sandwich segment, as consumer become hungry more than once and will be looking for quick meal to fill up until they reach home.
One of the biggest competitors of sandwich segment is soup, especially in winter months. Soup segment has shown considerable growth since 2002. Soup is seen as a healthy option. Key innovation in this segment includes chilled and frozen soups in pouches and cups. In addition to that increasing number of eateries are selling soups at lunch time.
Selling small portions of soup with small sandwiches for lunch will help in retaining the sale of the sandwiches. Offering soup as an accompaniment with sandwiches in the stores may lead to sandwich purchase and may also encourage non-sandwich consumer to visit the store.
Portraying that soup and sandwich combination is healthy eating option. Informing consumer that vegetables from soup, protein and carbohydrates from sandwich makes for an ideal meal, will lead to higher sales.
Ready meals have grown 30% from 2002-2007 and are now £ 1.5 billion dollar industry. It is a big competition to sandwich segment. Though ready meals are convenient but can not always be consumed as they are difficult to eat in office desk, and sometime have strong smell.
Salads have shown tremendous success as consumer look out for healthier eating options. Salads could be combined with sandwiches to make a lunchtime solution.
New trend that is in its growing stage is Sushi, with its introduction to the supermarket shelves and growth of few chains like Yo! Sushi. However this trend has not affected sandwich sector a lot but in the future it can be a threat.
Takeaway sandwich dominates the market completely, with over 90% of the share. Time poor consumers drives takeaway segment as they are looking for something that can be taken back to their desk and eaten quickly.
Takeaway segment has evolved a lot and now offer products which were available only in eat-in. consumers view eating-in as expensive option. As the time pressure increases, takeaway segment of sandwiches is bound to increase.
Consumer is becoming aware of the various cuisines and flavours that it come with. And these options can now be seen in the market such as oriental style sandwiches, falafel sandwich, and chicken tikka sandwich.
25% of consumers think about the calories in their food. The potential market of healthy sandwiches is not targeted by the companies. Almost one in three sandwich consumer looks for healthy sandwich option but still only around 10% of the new launches were targeted towards these customers.
People working for longer hours may opt to eat sandwich on more than one occasion.
The variety of stuffing and fillings makes it more attractive. Hot and cold option fills the gap in between.
Shorter lunch times means limited consumers going out to eat, means they need something that can be eaten on the desk.
Sandwiches are portable and can easily be eaten on the go.
Three out of four people in UK buy sandwiches, which make it, established part of their daily food.
Only 25% of peoples think that eating sandwiches daily are not good for health, which means it enjoys healthy and wholesome image.
The number of people working is on the rise, this provides the base for an expansion.
Inflation of food prices means rise in the price of the raw material.
Sandwiches can be perceived as unhealthy, containing lot of salt, fat and simple carbohydrates.
Rise in other lunchtime options such as ready meals, soups and sushi are becoming favourites.
Rise in home cooking means consumer preparing their own lunch.
As the prices rise, consumer might want to save money by making sandwiches themselves, as it is not very difficult to prepare them. 40% of people feel that it is pointless to buy a sandwich because they can make it at their home.
Shorter lunch breaks may force consumer to either skip lunch or get their own lunch from home.
Only one fourth of the consumer is ready to pay more for the tailor made sandwiches, which makes it difficult to do business for the speciality sandwich retailers.
Economic downturn and limited availability of credit is forcing small sandwich shops to close the business.
Popularity of sandwiches decrease with age, and as the population of retired people is on the rise, it may lead to less business.
Innovation and new product development (NPD)
Various retailers lead NPD, innovation in these categories is led by Marks and Spencer’s, accounting for almost 40% of the new product development in the year 2008. Somerfield and Waitrose have also been showing steady growth in product development.
Activity in NPD in sandwiches and wraps, % by company , 2006-08
During the period of 2006-08, healthy products were showcased in different ways; avoidance of preservative and additives is the most popular way, followed by use of wholesome ingredients. The use of no/less fat or calorie claims has not been very significant during this period.
Health oriented positioning in new launches for wraps and sandwiches, 2006-08
The use of limited edition claim has been popular during this period, though growth in premium sandwich sector is on decline. Limited edition sandwiches provide consumer new flavours and combinations, most of the time using seasonal ingredients.
% of limited-edition and premium positioning in new launches for sandwiches and wraps, 2006-08
Major increase has been seen in where new launches of sandwiches and wraps are positioned as having environment friendly packing. These claims are based on the use of recyclable material. Sandwiches have been long criticised for the material and the amount of packaging used.
% of new sandwich and wrap products with environment friendly packaging, 2006-08
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Consumer purchase pattern
Mintel commissioned research in November 2009 reveals that three quarter of the people bought sandwiches in the last three months. Sandwich buying decreases with the increase in age and rises with household income.
Following are the socio-economic who are more likely to buy sandwiches:
Nine out of ten students are likely to buy sandwich followed by eight people who are working.
82 %Parents, particularly with a kid under the age of five are likely to purchase sandwich.
Eight out of ten singles.
More than 80% of co-op and marks and spencer’s shoppers.
Figure 26: Buying, by gender, age and household income, November 2009
Buying sandwiches, by gender, age and household income, November 2009
Base: 1,000 internet users aged 16+
Where do they buy sandwiches from?
Grocery stores and sandwiches stores are the most important channels for purchasing sandwiches, used by 45% and 52% of adults respectively, which leaves independent and local stores far behind.
Grocery stores dominate in terms of number of stores as top five grocers operate 6800 stores and only half the number of stores are operated by sandwich chains, but despite that specialist sandwich stores appears successful in the competition.
Only greggs and subway have national presence, with around 3000 stores in the country. And these two chains lead the sale of the sandwiches followed by Pret A Manger with 232 stores until November 2009.
Where people buy sandwiches, November 2009
Base: 1,000 internet users aged 16+
In the last decade, sandwich sector has grown tremendously. The market is now worth over £4 billion and still growing at steady pace of around 8%. The current growth in the sector is drive by expansion plans of the sandwich chains. Consumer’s desire to eat healthy food is also a big factor behind the growth of this sector.
£m at 2002 prices
Retail sales of sandwiches, 2002-07
Sandwich sale by specialist sandwich shops have also increased sharply, almost half of the total sale of the sandwiches is through these sandwich shops and is trend is expected to continue and growth of 43% is expected in the period of 2009-14. Infact the sale of sandwiches from the specialist shops has seen more growth than the sandwich sector overall.
Figure 21: UK sales of sandwich shops, at current and constant prices, 2005-14
At 2009 prices
Between 2003 and 2004 limited growth was seen in the segment, but industry has recovered by rapidly implementing different strategies like focussing on new product development.
The chain sandwich restaurants have influenced growth tremendously by opening new stores rapidly.
The sale has been revitalised by offering huge range variety and choice to the consumer.
The strong growth witnessed in the sandwich sector is set to continue in the near future. The sale is expected to cross £5 billion by the year 2012.
Personal disposable income is set to grow in next five years but slower than the last few years, so the lower priced sandwiches will have competetive edge over others.
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