Hard times bite

The commercial sandwich market in the UK is worth £5.25bn annually, which means we are munching our way through a whopping 2.8bn shop-bought sandwiches each year, according to the British Sandwich Association (BSA).

The growth in the sandwich market has been quite healthy until now, with the figures to February 2008 running at 4.4% annual growth in value for a 1% growth in volume. This indicates that even this most basic of lunchtime staples has not been immune to the megatrend shift towards premium foods in recent years. Whether it will be the same story by this time next year is another matter, however.

"The market is obviously fairly slack at the moment because of the economy," says BSA director, Jim Winship. "Undoubtedly there is some element of concern about keeping costs under control, so we're likely to see more economy ranges emerging. On the other hand, we see the sandwich bars in London still scoring a big hit with sandwiches priced at £4 or £5."

And while he is understandably cautious about predicting what will happen next, Winship says the sandwich industry has a history of being pretty resilient to changes in the economy. "Some customers will drop out at the bottom end as they try to economise by making their own, but they are replaced at the top end by people who might previously have gone to a restaurant for lunch," he says.

Food Partners is one of the country's biggest commercial sandwich manufacturers, making a wide range of own-label products, as well as selling under its own Taste4life brand. It is therefore well placed to see which way the wind is blowing among its many customers.

Development director Liz Earl says that it will take a lot to put the foodies off their premium sandwiches entirely, but Food Partners is increasingly being asked to find ways of maintaining the quality while tightening the control on costs: "People still want mature cheddar, but they're not asking for Aunty Emily's crumbly cheddar from the little farm down the road. So provenance is one area that's changing in product development."

At the other end of the scale, West Country-based baker WC Rowe provides a range of bakery products to the multiples, but sells its sandwiches only within its own outlets. When it chose late summer to launch a new premium range, the timing was "horrific", says marketing manager Paul Pearce: "We used premium, locally-sourced ingredients on speciality breads such as horseradish bread, saffron bread and cheese and onion bread, but they haven't been going too well. At the moment, people might want to pick one up as a treat once a week, but they can't afford to do it every day."

This forced the company to drop the price of its premium range, but Rowe has also responded by getting back to basics with a new Rowe's Savers range, offering simple, traditional fillings in a card and flow-wrapped package. "They're good but they're nothing fancy," says Pearce. "We're trying to cover all the bases."

Earl says that packaging is another way that companies are looking to keep costs down. Packing sandwiches in card makes, very approximately, a 5 to 10% difference to the price of a sandwich, compared with thermoformed plastic packs. "Some customers had previously moved to packing their entire range in card, but now they're reintroducing thermoform for parts of the range," she says.

Whatever their budget, consumers are still looking for variety, and companies are responding with new recipes based on seasonal ingredients. For instance, Food Partners is using seasonal vegetables such as butternut squash and golden beetroot within its autumn recipes. "The most successful sandwiches are often based on a sound formula but with a twist," says Earl.

If the short-term future of new product development (NPD) at the premium end looks doubtful, the growing consumer obsession with health is one megatrend that seems unstoppable.

Market research company TNS reported that, when asked about which factors determined their choice of sandwich, 11% of consumers would have named health as their top priority 10 years ago, whereas 23% of people are looking out for a healthy choice today.

Even so, enjoyment remains an even bigger influence, up from 34% 10 years ago to 42%. So healthy sandwiches also need to be tasty or they will fall at the first post. "Gone are the days when it was all about low fat and giving things up," says Earl. "Now people want things to taste good and be good for them."

The new supermarket labelling systems for guideline daily amounts (GDAs) and traffic lights make everything much more visible to consumers and are having a big impact on sandwiches aimed at the multiples. With fat, salt and sugar all on the agenda, healthy eating is about more than calorie counting. "Things are much more visible and people can make their choices more easily with on-pack GDAs," says Earl. "Before we finalise any recipe we have to look at what the traffic lights are going to be." She adds that a lot of potential recipes now fall at this hurdle.

In technical terms, the biggest challenges in developing new products for the health conscious are presented by reductions in fat and salt. Winship says that 90% of manufactured sandwiches now conform to Food Standards Agency guidelines on healthy salt levels, although this may not be true in cafes and sandwich bars where food is made to order.

While the challenge with salt removal is taste, cutting down on fat raises the twin issues of taste and texture. According to Earl, a lot can be achieved by using products such as crème fraiche in place of mayonnaise, but removing the spread or butter from a sandwich also removes a valuable barrier between the wet filling and the bread. "We can get soggy issues," she says.

Rowe agrees that healthy eating is still a big driver, and Pearce says it's the next thing on its NPD agenda, along with portion control and child-friendly products. "We're looking at bite-size sandwiches aimed at children, but we'll also be looking at our portion sizes in general," says Pearce. "Not everyone wants a big sandwich, especially if they're watching their weight."

For others, a sandwich just wouldn't be lunch without a snack on the side. And increasingly, snack manufacturers are looking to provide healthy choices. "In 2005 I saw a Mintel report that predicted an 11% increase in healthy snacks versus a 7% decline in standard crisps," says Gareth Smith, md of Crips. "Since then the healthy snack market has increased in percentage terms and now stands at the 13-14% mark."

Crips' answer was to develop a baked product made from wheat and potato, which contains 75% less fat than standard crisps. The company launched five flavours of Crips in 35g bags in April and is now poised to launch three of these flavours as 140g sharing bags.

Smith says that Crips target a small but rapidly growing niche, helped by some rather unlikely promoters: "British people love their crisps but the general awareness of baked alternatives is still very low," says Smith. "When the big guys like Walkers spread awareness by launching their own baked products, it actually helps us a lot."

Buoyed by early success in Waitrose, Selfridges and some 400 independent outlets, Crips is looking to develop more flavours and lunchbox sized bags over the next 12 months. But one thing the company is not looking at for the time being is reducing the salt content of Crips. According to Smith, getting consumers to opt for lower fat snacks is a big enough leap for now.

Other companies think the time is right to lure snackers away from crispy products entirely. For example, Oloves are foil bags of flavoured olives that are conveniently packed without fluid, thanks to a novel preservation regime.

"It's going to take a while to persuade the consumer to pick up a bag of olives rather than a pack of crisps," admits Hayley Whitham, director of Olove producer Brand Stand, "but it's going really well. People know olives contain healthy fats and we've kept all the packs under 100 calories."

Unfortunately, Oloves won't fit the bill for anyone on a low-salt diet. "All olives are soaked in salt water to cure them. If people need to reduce their salt for health reasons, they shouldn't really be eating olives," says Whitham. "For everyone else, there's a health benefit." FM