According to Mintel the market for general snack products grew by 3% from 2001-2005 to reach a value in excess of pound;8bn. Three quarters of adults snack on the go, creating more than five billion adult on-the-go snacking occasions each year in the UK, which is estimated to generate pound;3.6bn in retail revenue for on-the-go snacks. Adding to this are children who spend a further pound;883m of their income on confectionery, snacks and drinks each year.
The government has been a strong force in snack food manufacture recently, with regulations on advertising foods that are particularly high in fat, sugar and salt to children. Crisp and snack food manufacturers have looked ahead and undertaken some dramatic reformulation of their products.
According to United Biscuits UK (UBUK), nuts is the fastest growing segment in the total snacks market and KP Nuts is worth pound;32.5m
Impulse trading director of UBUK Michael Rouse says: “There is a massive opportunity for retailers to grow impulse sales of nuts. Retailers who stock the KP Nuts impulse range will increase sales because consumers will be encouraged to buy more often and trade up for more premium nuts.”
As well as KP Nuts, UBUK is focusing on Nik Naks and Wheat Crunchies. Rouse says: “We are making a pound;1m investment in Nik Naks and Wheat Crunchies brands to ensure these great tasting products are healthier and also available in the right flavours and formats to drive fantastic sales within impulse.”
Rouse says: “It is widely recognised that health is a key driver for today’s consumers across a wide range of categories and not just snacking. However, health continues to grow in significance when people select a snack with this being the primary consideration 12% of the time in 2005. This has meant manufacturers need to consider in more detail the health credentials of products.”
This summer UBUK has also launched the new Phileas Fogg premium snacking collection of seven new products inspired by Phileas’ global travels, to primarily target the independent trade.
Pepsico says that the crisps and snacks market is currently worth almost pound;2bn per year and is a highly lucrative category for wholesalers and retailers alike.
Walkers has spent pound;20m on the re-launch of Walkers in response to the current consumer preference for healthier eating.
Trade marketing manager of PepsiCo Cara Beeby says: “Over the years people’s needs have changed and so have we. Nowadays our customers are looking for snacks that do not just taste great but are also better for them. We have reduced the saturated fat and salt levels in our crisps to make them healthier without compromising on taste at all.”
The new Walkers Baked contains 70% less fat than regular crisps and contains less than 100 calories per pack. Baked is designed to appeal to people who enjoy crisps and want a no taste compromise, low-fat alternative.
Walkers has also introduced price-marked packs. “We know that 80% of retailers think price-marked packs are a good idea, as they drive shopper loyalty and increase weight of purchase,” comments Beeby. As well as this Walkers has introduced the Best Sellers initiative, which include a ‘best seller’ stamp on cases of top 20 products as well as POS for use in cash and carry depots. Walkers field teams have worked with independent retailers to increase focus on the top 20 best sellers in store, and the initiative was also implemented in delivered wholesale. Beeby says: “This innovative approach has begun to change the way retailers shop from the National Order Form and feedback from retailers has been overwhelmingly positive.”
According to Kettle Foods, Kettle Chips are showing growth of 30.5% year on year in a static market.
Jeremy Bradley, managing director of Kettle Foods, says: “We are obsessed with genuinely delivering only real ingredients and have been since 1989. Increasingly consumers and the media are seeing things the same way, as trends move towards a desire for authenticity and honesty from manufacturers. To illustrate this commitment to sharing information with our consumers, a traffic light GDA panel has been introduced to the back of packs. This makes it easier for consumers to understand how our Chips contribute to their overall diet.”
Justin Burbage, head of impulse of Kettle Foods, says that the two main trends affecting the market are themes of health and indulgence. “Consumers want healthy products but they also want to treat themselves with indulgent ones as well. Kettle Chips can offer this as they have no MSG and use real ingredients, but are satisfying to eat and have seasoning with a twist.” An example of this seasoning is the new winter variant Apple, Sage Thyme which was voted for by consumers on the Kettle website. Kettle Chips has also introduced Cr eacute;me Fraiche, Lemon Coriander which has a prominent dairy-based flavouring.
Burbage’s advice to wholesalers is to block Kettle Chips together to give them standout of the shelf. The 40g impulse bags come in shelf ready cases and further POS equipment will be available from Kettle Foods over the next few months.
With increasing consumer attention on healthy snacks Kettle has launched a lower calorie snack range, Kettle Crispy Bakes. Crispy Bakes contain fewer than 100 calories, 10% fat and 0.5g of salt per 24g bag.
Procter Gamble, the manufacturer of Pringles says 42 packs of crisps and snacks are purchased every second and 95% of UK houses purchase crisps and snacks.
Procter Gamble trade communications manager Paul Lettice, says: “Procter Gamble is constantly trying to invigorate the market and develop ways for retailers to build their business.
“The biggest challenges in the snack market are maximising floor and shelf space as well as effective ranging. Making improvements can be fast and immediate. Just removing slow selling SKUs from shelves will impact profitability immediately.”
The key is to stock the product in a highly visible area. Lettice says: “Group products together, ensure price and product labels are correctly positioned and keep shelves clean, well maintained and well stocked. Gaps and out of stocks just frustrate shoppers.”
Pringles have recently been relaunched with 30% less saturated fat making them ‘better for you.’ The launch of Pringles Gourmet in four flavours has introduced Pringles into the premium snack market.
Duncan Hill, commercial director of Trigon Snacks, says: “The wholesale channel is a very important sector for Trigon Snacks. Big D plays a vital role within this sector and Trigon supports the brand though field representation and a strong promotional campaign throughout the year.”
The World Cup has been a significant marketing investment and Big D also launched new packaging and a new Big D girl, Malene, in March to feature on the Big D pub cards. “As a result, Big D sales are up over 18%,” says Hill.
Trigon Snacks has added to its range with the new Trail Mix snacking nuts, which are aimed at teenagers and young adults for on the go snacking occasions. Four of the products have been granted the use of the Real Choice logo, which indicates that the products have been nutritionally assessed and approved by the Health Education Trust (HET). The Real Choice logo can reassure schools that the products meet the requirements for healthy school vending to meet the Schools Food Trust recommendations and are suitable for sale in schools, colleges and other educational institutions. Hill says: “Our research revealed a gap in the market for the youth market. Trail Mix meets the needs of today’s younger consumers and will be available at a time and place that is convenient for them.”
Sun Valley has produced snack sized You Are What You Eat packs for vending in schools. Jonathan Barr, marketing manager of Sun Valley, says: “Sun Valley has responded to the call for junk food to be replaced by healthy snacks with the launch of two new ranges to keep kids going in the classroom. You Are What You Eat snacks from Sun Valley are HET approved to be sold in schools across England and Wales.
“A mid morning pack of seeds or afternoon treat of fruit and nuts is a healthy solution to see them through until their next meal. Nuts and seeds are so nutrient dense, you don’t need to eat a lot of them so snack packs, as well as being ideal for the vending industry, are just enough to satisfy and are the ideal size, whether at school or work.”
Sun Valley also has a new range of low fat pretzels in two varieties, Worcester Sauce and Sour Cream Onion. Barr says that product placement is a key factor for retailers, because consumers need to know where to find the product they are looking for. If they have to search nut mix, cereal bars and the healthy snacks sections they may give up and go without. He recommends that branded displays and POS are ways to attract consumers’ attention.
Mintel reports only 14% of men and 27% of women manage to meet their healthy eating target of five portions of fruit and veg per day. Mintel says NPD analysis in snacks suggests there is plenty of room for the development of convenience-led products which would count towards their target.
This is good news for Whitworths as it has launched Apple Crisps into the healthy snacking category. Whitworths Apple Crisps are dried rather than fried and the health message is reinforced on-pack with the 5 A Day logo.
David Smith, Whitworths’ marketing director, says: “Whitworths Apple Crisps will enable consumers to enjoy a genuinely healthy daily snack in a take anywhere, eat anywhere pack format. We are constantly updating and developing new ranges to meet consumer needs and are also helping parents to provide their children with snacks that are not only tasty but healthy and nutritious too.”
Also hoping to encourage more people to snack on fruit is Ocean Spray, with its Dried Cranberries range.
Jamie Robinson, commercial director of Ocean Spray International Services (UK), says: “Consumers are already familiar with many of the health benefits of cranberries and there is growing awareness of the goodness of culinary seeds and nuts. Our Dried Cranberries range will drive category growth by stimulating dried fruit users and bringing in new health conscious consumers.”
The range includes Dried Cranberries, Dried Cranberries with Mixed Nuts Seeds, Dried Cranberries with Raisins and Dried Cranberries with Tropical Fruits.
“There has been limited innovation within this category and it’s crying out for new healthy options from the big brands to achieve greater growth. Our range is ideal for all snacking occasions including lunch-box and desk top dining,” he says.
Regarding wholesalers Robinson says: “We’ve had a tremendous response from the multiple retail trade and now we’re turning our attention to wholesale and cash and carries as Ocean Spray Dried Cranberries 40g packs are an impulse buy. We’re working with the wholesale sector on tailored promotional activity to drive distribution and rate of sale.”
A newcomer to the UK market is the Jack Link’s ready-to-eat Steak Bar, joining the Jack Links range that includes Beef Steak Nuggets and Jerky.
Ernst Sattler, European managing director of Jack Links, says: “There is rapidly growing consumer demand for healthier alternative to traditional snacks.
“The Jack Link’s range enables convenience stores to meet the demand while generating high margin returns from a premium range of quality, ready to eat meat snacks.”
=== Buyer’s viewpoint ===
The crisps and snacks category has had a good track record of growth over many years, but recent attacks by the government and health regulating authority on obesity and salt content in food have dented the category badly.
After many years of successive growth, we experienced a decline in sales for the first time last year. This year the sales have steadied a lot but the category is still flat.
The leading suppliers in the category are frantically trying to tackle this adverse publicity by making claims of their products being more healthy by reducing the salt content and upgrading or changing the oil with reduced cholesterol levels.
There has been a series of new healthier products such as Seasons, Potato Heads and Baked Crisps by Walkers and a go ahead range of products by KP.
The leading suppliers in the category are concentrating on the core range of products, but the new healthier options have not performed. Seasons and Potato Heads have now been de-listed and initial sales in go ahead are also not very encouraging.
All the leading suppliers give good support to the independent sector. In this sector the promotions are generally, ‘Trade ‘n’ save’, or retro on sales out. We do not get BOGOF promotions as multiples do because we cannot guarantee their execution.
From suppliers we look for promotions based on off invoice, improvements in service levels and increased depot contact.
=== Buyer’s viewpoint ===
We are currently trading at +3% year on year, although the growth has come in the latter part of 2006.
It certainly appears that consumers are rebelling against the constant negative vibes they are fed regarding what they may eat, and are returning to things they enjoy.
Healthier products have certainly shown large sales growth, although on a relatively low base, and the work Walkers has done in reducing the fat content of their crisps has proved effective.
The impact of healthy snacks in small independent stores has far from reached its full potential due to poor distribution, and that is an area suppliers and wholesalers need to continue driving.
KP McVities and Walkers Snackfoods use regular promotions, with KP in particular producing good retail mechanics to drive extra volume through the stores. Both of these suppliers have also recognised the problems the industry has with the ‘healthy eating brigade’, and have tried to develop brands offering an alternative to fit in to that area.
We are offering consumer activity on Hula Hoops at two for 40p, and McCoys two for 60p. Both activities are proven volume drivers, and are well received by retailers.
We strongly believe that consumer activity is the best way to increase volumes, and would encourage suppliers to offer this type of activity rather than offering ‘buy 2 cases save pound;3′ as a wholesale deal, which does little to sell more product through.
We also have some strong multi-pack activity lined up with Walkers Snackfoods for the Christmas period, which should produce massive volume increases for us.
We have a problem with the amount of new products or limited editions forced on us by suppliers on a regular basis.
All we ask from suppliers is honesty and support.