Following this week’s news that the Government is going ahead with its plans to restrict products high in fat, salt and sugar (HFSS) being shown on TV (pre-9pm) and online from 2022, IRI has published data around the impact of the ban and offered five options for FMCG manufacturers.
“At IRI we estimate that 50% of the total HFSS marketing spend (£384m) in the UK will be impacted, that’s worth £192m to food and drink manufacturers and retailers alike,” said Carl Carter, Marketing Strategy & Effectiveness Director at IRI.
“Advertising can be effective at driving sales for brands. Well executed and optimised advertising spend nudges consumers towards one brand over a competitor in the category, rather than into the category itself. So, if you are in the mood for something sweet and in the confectionery aisle, there’s plenty of evidence that having recently been exposed to advertising will increase your chances of adding that brand into your consideration set rather than drawing you into a completely new category you’ve not shopped before.”
With restrictions on this type of advertising set to come into force next April, Carter outlines five options food and drink advertisers should consider:
- Accept the ban, with manufacturers and retailers absorbing a loss of £192m.
- Move advertising spend to post-watershed, with a predicted loss of £112m on sales.
- Move advertising spend to other channels, with a predicted loss of £96m in sales.
- Advertise an alternative low fat, sugar, salt (LFSS) brand – 78% of manufacturers have a non-HFSS product. But, by shifting advertising to products with lower penetration or new product development, IRI would expect to see lower returns and a lower halo impact across brands. The firm predicts an impact on sales of -£80–100m.
- Re-formulate HFSS products to be compliant. This could be the best option for manufacturers, with a lower impact on sales of -£30-75m, but also the most difficult. While this would allow for a continuation of advertising of core products with the highest penetration, IRI highlights that it is an incredibly complex process and brands could face consumer pushback, while some products cannot be reformulated.
Carter concludes: “While it is a challenging time for many FMCG brands and retailers, now is the time to investigate new opportunities and test new media strategies ahead of the regulations coming into effect.”
NAM Implications:
- Worth working thru these IRI five options with your team…
- …and identifying your vulnerabilities…
- …before the market does it on your behalf.
