7 out of 10 shoppers now rely on price-marked packs for a guarantee of quality and value, and storeowners are realising PMPs are a purchase driver
Price-marked packs (PMPs) are now chosen by seven out of 10 impulse shoppers over non price-marked. More manufacturers are therefore price-marking their products and independent retailers are increasingly understanding the importance of PMPs.
PMPs became increasingly important during the pandemic. Now, over the course of 2023, which has been characterised by an ongoing cost-of-living crisis, PMPs have found a renewed relevance for retailers and consumers – especially as a way of countering inflated ticket prices and as a way to guard against shopper dissatisfaction. These clearly labeled products can provide shoppers with a sense of value and transparency.
Matt Collins, trading director at KP Snacks, says the growth in the PMP format is expected to continue increasing in both relevance and popularity.
“Not only do PMPs offer consumers great value for money, the clear pricing also gives them assurance that they are not being over charged,” Collins adds.
The impact of the cost-of-living crisis on consumer behavior manifests mainly as reduced spending on non-essentials, actively seeking deals and discounts and prioritising nearby convenience stores over larger supermarkets to save time and money. It's essential to keep these factors in mind when devising strategies to maximise sales of PMPs.
Soft drinks
Price-marked packs continue to play a strong role within soft drinks, as 66.9 per cent of sales in the convenience channel now go through as PMP, an increase from 66 per cent in 2021 [IRI, 52w/e 23.10.22].
Ben Parker, retail commercial director at Britvic, says this not only offers the reassurance of value to shoppers, but also creates confidence in local retailers and how they price their products.
“As shoppers navigate the cost-of-living crisis, shopping habits will continue to change. Consumers are looking to make their money stretch as far as possible for them and as part of this, we expect to see smaller transactions and smaller pack sizes come into play,” comments Ben Parker, retail commercial director at Britvic.
“However, we also expect to see growth in at-home family dining and at-home socialising, both of which are important occasions for soft drinks.”
He suggests that retailers stock market-leading brands in a variety of PMP formats to meet these shopper needs, recommending Pepsi MAX six-pack PMPs, which will give shoppers an easier way to buy into the soft drinks category in a multipack format, and Robinsons, which offers a 900ml price-marked bottle at £1.49, creating a cost-effective solution to family shoppers at just 6p per serve.
“For shoppers looking for on-the-go solutions, Robinsons ready to drink, our great-tasting juice drink, is available in a 500ml bottle at a £1 price-marked pack, helping to drive impulse sales,” he adds.
Significantly, Parker confirms that the profit on return percentage (POR%) will be maintained across the Britvic range, ensuring increased cash margin as the price-marked packs increase in price.
“On a selection of our core price-marked pack lines including our 500ml formats of Pepsi MAX and Lipton Ice Tea, as well as Fruit Shoot, we will look to increase the price-marked pack in line with inflationary pressures as well as the POR%, to create more shared margin and an even stronger translation to cash margin,” he informs.
“This is as a result of recognising the importance of listening to retailers, as part of our role as a responsible trade partner, ensuring we reflect the challenges in the market at the moment.”
Milk drinks have shown themselves to be a resilient consumer-favourite, continuing to grow in popularity, both as a take-home treat or to be enjoyed whilst out and about. This has largely been supported by the trend for premiumisation in flavoured milks that has brought new consumers to the category and helped wider growth.
“In the face of the current economic uncertainty, consumers are savvier than ever before whilst also refusing to compromise on taste. In line with this sentiment, FrieslandCampina’s PMP formats offer value, taste and convenience by the bottle, and continue to perform extremely well at this time,” comments Katie Chadd, business unit controller at the dairy major.
Chocomel, which has introduced an inaugural PMP value offer for its 250ml cans (£1.69) this April, has plans to continue this offer across its share pack this summer, she reveals.
“The PMP format is designed to help retailers boost their on-the-go beverage sales, drive impulse purchases, and bring incremental shoppers into the category, whilst ensuring a positive price perception among shoppers,” she says.
Additionally, YAZOO offers permanent PMP variants of all core flavours as well as across its limited-edition flavours, meaning the range can be tailored to whatever best suits the store.
“Retailers can stock the flavours and sizes they know sell well in their locale, whilst communicating great value to shoppers and maintaining that point of difference – e specially as the weather heats up and consumers are looking for a milk drink fix to quench their thirst whilst getting the benefits of dairy goodness,” Chadd notes.
YAZOO’s larger format 1 litre bottles are available as a £1.99 PMP, perfect for take-home and sharing moments, whilst the core 400ml bottle, a great option for the impulse and drink now occasion, is available in a £1.49 PMP.
Earlier this year, YAZOO returned its Choc Mint flavour to shelves nationwide. Previously available as a limited-edition, Choc Mint flavour was a smash hit with shoppers and Chadd says demand has driven its return to the range with a consumer-driven bottle design increasing visibility in-store.
“Choc Mint was a huge hit with YAZOO fans when it first launched. It sold the most volume out of home of all our limited-edition flavours and we know it attracts up to 30 per cent incremental shoppers and purchases across the category,” she says.
The fan favourite variant is available in standard and price-marked packs of 400ml in convenience and wholesale, with an additional one-litre larger pack also available.
Sports & Energy
Sports & Energy is a key sector for PMPs, delivering £56.3m in value growth YOY, up 9.3 per cent. Within soft drinks, Sports & Energy contributes to over a fifth of total PMP performance (+21 per cent), and Red Bull delivers more than half (53 per cent) of Sports & Energy PMP growth, adding £29.5m in value, up 17 per cent vs YA [Nielsen Scantrack, MAT, w/e 31.12.22].
“For retailers that are concerned with margin, Red Bull is the No.1 energy brand with the highest demand vs other energy brands, presenting a compelling proposition to help drive PMP sales value,” a Red Bull spokesperson said.
Red Bull Energy Drink 250ml is the best-selling PMP sku in sports and energy, worth £67.8m and drives the highest demand in the Red Bull portfolio and Energy Drink 355ml and 473ml are the top two fastest growing PMP skus in sports and energy, +£8.9m (+24.0 per cent) and +£7.4m (+18.0 per cent) respectively.
“Meal deals are also a great way to provide value to your shoppers, selling key soft drinks alongside a sandwich and snack for a complete lunch,” the Red Bull spokesperson added.
“Red Bull is the favoured energy brand for meal deals, with 19 per cent of shoppers buying Red Bull if in a meal deal and ED 473ml is the key choice of sku, with 25 per cent of Red Bull shoppers choosing this can size when it is in a meal deal.”
Britvic launched Rockstar Juiced El-Mango and Tropical Punch, in a PMP format (£1.29) last year, designed to further drive impulse purchases and bring new shoppers into the category.
“Rockstar Energy already offers great value to shoppers with its extensive range of flavours in a price-marked format and Juiced El-Mango and Tropical Punch are set to drive excitement and interest by adding to the range,” Parker says.
Meanwhile, Lucozade Energy has enhanced its Original and Orange flavours, following 18 months of extensive research and development and input from 6,500 consumers. The enhancements to the drinks are live now, available in both standard and PMP formats.
“The new recipes deliver a more ‘zingy’ taste, with a bolder taste for the unique Original flavour and more citrusy, orange note for Orange, giving consumers more of what they love,” said Matt Gouldsmith, channel director, wholesale at Suntory Beverage & Food GB&I.
“The changes are subtle but further elevate the drinks’ flavours, giving Lucozade Energy drinkers more of the unique notes they associate with the brand. Marketing plans, set to be unveiled in the coming weeks, will work to bring in new consumers to trial Lucozade Energy and help drive retailer sales.”
The evolution is part of SBF GB&I’s Core Brand Innovation (CBI) programme, an approach to growing brands created by its global parent company Suntory which has proven success across markets in Japan and Europe. The agile process involves continual prototyping and testing, putting the consumer at the very heart of the insight and solution.
The Orange and Original flavours are also getting a fresh pack design that reveals more of the liquid to shoppers, creating greater appeal by allowing for more taste, flavour and refreshment cues.
“The extensive consumer research revealed that the new-look sleeves help increase purchase intent among shoppers, as well as making them more likely to spot the new bottle design on shelves,” Gouldsmith says.
The changes are effective across all Lucozade Energy Orange and Lucozade Energy Original 380ml, 500ml and 900ml bottles for individual sale and inclusion in multipacks.
Ultimately PMPs help to drive rate of sale, with one in three shoppers more likely to buy soft drinks if in a PMP and 75 per cent of convenience shoppers more inclined to buy PMP [Lumina Intelligence]. In times of financial pressure, when shoppers are more careful about what they spend their money on, and looking for savings on premium brands, PMP is a purchase driver, delivering a perception of value.
Snack packs
Worth £325m in the Crisps, Snacks and Nuts (CSN) category [NielsenIQ, MAT 22.04.23], the PMP format is now the largest format within CSN across symbols and independents.
“PMPs are a hugely versatile format that caters for multiple missions and occasions, whether that be hunger fill or sharing. 70 per cent of bagged-snacks shoppers purchase items on impulse and PMPs drive these sales through clear messaging and displays [Lumina, 2022],” commented Matt Collins, of KP Snacks.
“At KP Snacks, we help retailers by ensuring we offer the right product range in the right formats, boosted with the right promotions and in-store merchandising.”
Worth £108.1m and growing in value at 53.4 per cent, KP Snacks’ portfolio of large format PMPs is extensive, designed to excite shoppers and drive impulsive purchases for retailers. They also offer a wide range of smaller format PMPs, such as Space Raiders, which are sold in 40p formats.
“Smaller format PMPs are perfect for consumers looking for a quick and affordable snack throughout the day. We also offer other classic heritage brands in singles format, including Skips, Discos, and Wheat Crunchies, which are available as 50p PMPs,” Collins adds.
Claire Hooper, marketing director at Calbee UK, says Seabrook’s PMP range is a true testament to the brand’s commitment to providing great value, as well as great-tasting crisps and snacks.
“The crisps and snacks category is highly impulse-driven, so we offer a range of price-marked grab bags, as well as household staples like multipacks. With over a quarter of the UK population stating they are struggling financially now, price-marked packs are a great way to offer visible value to shoppers,” she comments.
As more than two thirds of the consumers (69 per cent) plan to shop at many stores to take advantage of offers, with 60 per cent actively looking out for and trying to buy products when on promotions [Nielsen, January 2023], this creates an opportunity for convenience retailers to appeal to shoppers.
“PMPs continue to provide a vital reassurance of value, with all of Rustlers’ bestsellers available in this format, however, value isn’t just confined to the price of a single product. Product promotions also highlight good value and drive impulse purchase, such as an on-pack promotion giving shoppers something extra,” said Elaine Rothballer, head of marketing consumer brands at Kepak.
“Savvy shopping is no longer just the domain of those on a tight budget. For many shoppers, the stigma once associated with finding a bargain is waning and they’re prepared to seek these savings, becoming common practice in FMCG today. PMPs at accessible price points help to attract new customers and encourage repeat purchase from both brand loyalists and impulse shoppers.”
The Quarter Pounder is Rustlers’ best-selling product in convenience, accounting for nearly a quarter of all brand sales in the channel. Barbecue Rib is also a firm favourite among shoppers, accounting for more than £8.5million in yearly sales in the impulse channel.
Other best-selling products from Rustlers include All Day Breakfast Muffin, a strong seller that is ideal for shoppers looking to grab a quick breakfast or lunch option, Southern Fried Chicken Sub, offering shoppers a hot-eat lunchtime option, and Twin Cheeseburger, a top seller seeing significant growth at 16.8 per cent, indicative of the current climate and shoppers moving to value offerings.
“The PMP range from Rustlers already includes the brand’s Core range of bestselling products, the Quarter Pounder, BBQ Rib, All Day Breakfast Sausage Muffin, Southern Fried Chicken Sub and the Twin Cheeseburger, with products being added to meet consumer and retailer demand,” Rothballer adds.
£1 PMPs have been the main driver of category growth in crisps and snacks, growing more than twice as fast as the market. Inflation pressure has forced most brands to move above the £1 price-point but Matt Smith, marketing director for Tayto Group, says Golden Wonder is committed to putting consumers and retailers first by sticking to it.
“Having surveyed both retailers and consumers, it was clear how important the £1 price-point is to both groups,” he explains.
“Consumers are really feeling the pinch at the moment and independent retailers are winning where they can offer great value for money. Instead of raising the headline price of our £1 PMPs, we’ve decided to stick to £1, demonstrating Golden Wonder’s commitment to delivering great consumer value whilst offering strong retailer margins.”
He adds that this commitment to £1 has been instrumental in Golden Wonder’s success with its £1 PMP snacks range outperforming the market, +22.6 per cent vs +9.9 per cent, [Circana, 12w/e 21.01.23] and Transform-A-Snack being the star performer, with 42 per cent in the 52 weeks ending 21 January 2023.
Golden Wonder has also recently launched their best-selling crisp flavours in £1 PMP packs. The fully flavoured £1 PMP range includes Cheese & Onion, Spring Onion, Salt &Vinegar and Chip Shop Curry.
Whilst £1 PMPs have been the main driver of category growth, there remains an important role for impulse PMP snacks as they still account for over one in three PMP snacks sold.
Hitting the key price-points is vital, as Matt explains, “With consumers’ focus on value, it’s important to stock a strong range of entry-point and mid-tier (50-69p) snacks. We’ve sold over 21m entry-point PMP Fun Snacks (Tangy Toms, Spicy Bikers, Awesome Oinks and Strikers), growing our share from 25 per cent to 37 per cent, as these packs offer exceptional value with their 35p / 2 for 60p on-pack offer.”
Confectionery
The total UK sugar confectionery market is worth £1.6bn [IRi 52w/e 31.12.22] with Perfetti Van Melle remaining as one of the leading manufactures with their portfolio of household brands including Mentos, Fruittella, Chupa Chups, and Smint being worth over £100 million.
“Sugar Confectionery is a resilient category as it delivers lifts and treats for its consumers. As we continue into a challenging economic landscape, confectionery remains an affordable treat giving retailers a compelling sales generator,” commented Mark Roberts, marketing and trade marketing director at Perfetti Van Melle.
Confectionery is one of the top five categories purchased on impulse in convenience stores, and by offering a full range that supports the government’s HFSS guidelines of under 150kcal per pack – which is something that, Roberts notes, most manufacturers can’t claim – Perfetti has the opportunity to be closer to these impulse purchases.
“Our focus is on driving choice and by helping to signpost within the category, consumers can easily find a treat for any occasion. As we further develop our product portfolio, we continue to bring a wide range of products to consumers with new flavours, packaging, and textures,” he says.
Paul Robinson, controller – convenience and wholesale at Perfetti Van Melle, suggests Mentos Fruit, Mint and Tropical flavours, Fruittella’s Juicy Chews, Strawberry Mix, Duo Stix and Summer Fruits variants and Chupa Chups Minis bag as must-stock PMPs.
The cost-of-living crisis presents challenges, but it also offers opportunities for convenience stores to thrive by emphasising the value and affordability of PMPs. By expanding the PMP offerings, effectively promoting them in-store, and engaging with customers, you can boost sales and foster customer loyalty, even in challenging economic times. In doing so, you not only support your business but also help your community access essential products at reasonable prices, reinforcing your store’s role as a pillar of the local community.
