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Comfort food is feeding off the recession

A sausage roll and a caramel wafer, all washed down with a can of Irn-Bru?

It may sound like the sort of school lunchbox to make Jamie Oliver cry, but it’s actually the success story of the recession: comfort food.

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AG Barr, the makers of Scotland’s other national drink, announced yesterday that sales revenue from Irn-Bru rose 5% last year, driven by a growing appetite in England and Wales for the rust-coloured Scottish drink.

All this means that Barr’s pre-tax profits are £24.5 million, up 5.3%.

In a results statement, AG Barr highlighted sponsorship of the Scottish Football League and English Rugby League -- and better distribution -- as drivers behind this growth.

However, it is also part of a broader, recession-defying trend of strong performance by food and drink brands seen as homely Scottish favourites. Greggs the baker and Tunnock’s the biscuit maker are also reporting buoyant sales.

Meanwhile, Coca-Cola has become the first grocery brand to achieve more than £1 billion in UK sales. In the past year, sales of the drink have risen £47.6m.

Greggs, the Newcastle-based bakery chain which is to be found in nearly every Scottish town centre, is a purveyor of yum-yums, Belgian buns and other mid-afternoon treats, as well as fresh lunchtime sandwiches.

It sold four million mince pies in four weeks over Christmas. Its best-selling product, though, is a comfort food classic -- the sausage roll. Sales of the product have risen by 15% during the recession, bringing total annual sales of the meat pastries to 140 million.

Greggs has benefited from being able to undercut the competition. The company offers sandwich deals and claims to sell hot drinks more than 35% cheaper than some national coffee chains.

It reported a 7% rise in profits in the 12 months to August last year and has announced plans to open 600 new stores across the UK, including many in Scotland.

Tunnock’s, meanwhile, watched turnover in 2008 rise by £3.8m. The “star performer”, according to Fergus Loudon of Tunnock’s, has been the export market, but he added: “There’s tremendous customer loyalty with Tunnock’s.

“In times of hardship, people always give themselves a treat. It could be chocolate and we benefit from that.”

Chocolate sales have thrived despite the poor economic climate. Cadbury’s reported last year that its worldwide global chocolate sales were up 6%, with Thornton’s also announcing a strong performance.

This led the market research firm Mintel to forecast last autumn that chocolate sales would grow by 5.8% this year despite the recession, adding it expected year-on-year increases in sales of 5% until 2013.

The forces driving these increased sales in sausage rolls, fizzy drinks and chocolate, however, are not clear cut -- with price, familiarity and the desire to treat oneself cheaply, all likely to be influencing consumer behaviour, according to Dr Leigh Sparks, professor of retail studies at Stirling University Management School.

He said: “We have clearly got some groups of consumers, who have expanded during the recession, for whom cost is the key driver.”

Other factors, however, included how convenient it was to find the product or outlet, an element that worked in Greggs favour due to its wide distribution on Scottish high streets.

When value for money and convenience came together, sales increased.

There has been much rhetoric, Dr Sparks added, about consumers turning to products they know during the recession, including items they remembered from their youth or childhood.

This phenomenon originated partly from consumers themselves and was partly driven by marketing executives.

“Clearly if people are price conscious, but are also thinking that they don’t like the world, they will think back to a time they did like and you will see these nostalgia brands coming through. If marketing executives notice that, they’ll feed off it.”

Dr Alex Yellowlees, consultant psychiatrist and medical director of the Priory Hospital in Glasgow, said that at times of stress, people often looked for psychological “anchors”, things that reminded them of a time of safety and security, and this could be a factor in the rise in popularity of familiar foods.

Dr Yellowlees added that certain foods also had a physiological effect, by lowering anxiety and increasing a sense of wellbeing, especially foods that were high in sugar.

Chocolate, in addition, had another effect, that of promoting the release of endorphins or “feelgood chemicals”.

Marketing executives had to keep a close eye on changing consumer moods if they wanted to do well, according to Dr Sparks.

He said: “Clearly at times of boom it’s easier to market luxury and feelgood products, while at the start of a recession it’s a much more restrictive message about value for money.

“But one thing that may start to come through is consumers getting fed up with feeling down. What will matter is how well marketeers are in tune with what consumers are beginning to feel.”

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