The recent interest in healthy eating and healthier products has had an impact on the snacks category, but snacks manufacturers have responded with healthier versions of old favourites and new products.
According to Mintel, the UK market for crisps and snacks has slowed considerably in recent years, despite an overall penetration of almost 90%, consumption. But sales recovered slightly in 2006 after two years of decline as the industry introduced healthier variants.
Three major brands owners account for 75% of the market, Walkers, UBUK and Pringles.
Walkers remains the clear market leader with the largest brand in Walkers crisps and more than half of the top 20 brands in the market, according to Mintel.
PepsiCo says Walkers continues to drive growth in the crisps and snacks market with the brand experiencing a 5% increase in sales by aiming to make its existing products as healthy as possible without compromising on taste and introducing new products and flavours.
According to PepsiCo, the average cash and carry stocks around 400 crisps and snacks lines, while the average independent retailer stocks just 59 crisps and snacks lines. PepsiCo’s Insights team has carried out trials in depot to reduce their ranges by as much as 40%, getting rid of slow sellers and focusing on the core best selling brands. Depot managers reported incremental sales, increased SKU efficiency and reduced costs. Customers found the fixture less cluttered and easier to navigate without extra boxes and pallets on the floor and shelves.
PepsiCo also teamed up with Gallo Family Vineyards to offer a Walkers Sensations Divine with Wine promotion. According to PepsiCo, currently 20% of all Sensations consumption in the evening occurs with wine, making it the highest indexing crisps brand with wine.
PepsiCo has been highlighting the fact that Walkers crisps are being made with 100% British-farmed potatoes. The British climate has 154 days of rain a year on average, and is ideal for growing potatoes.
Jon Goldstone, vice president of Walkers Marketing, says: “Walkers has always supported the British farmers and over many years has built up trusted and close-working partnerships. The move celebrates our British heritage while ensuring the ongoing quality of our Walkers products. Our consumer research tells us that people are increasing concerned with the origin of their food and they welcome our commitment to sourcing 100% British potatoes.”
According to Mintel, United Biscuits UK is the second largest manufacturer with both its McCoy’s and Hula Hoops enjoying strong growth in 2006.
UBUK says it recognises the wholesale channel as a vital sector for the company as it accounts for 51% of its total impulse sales.
UBUK’s bagged snacks have undergone significant reductions in levels of saturated fats. Hula Hoops and Hula Hoops Ridges have had their saturated fat levels reduced by 55%, and Skips, Discos, Nik Naks, Frisps, Roysters and Wheat Crunchies have all seen a 50% reduction during the last year. McCoy’s Classic, McCoy’s Specials and McCoy’s Special Tortillas have saturated fat levels reduced by 30% and levels of salt reviewed.
UBUK has launched Hula Hoops multigrain in a combination of rice flour, maize flour and wheat bran. The healthier sector is currently worth pound;77m in annual sales and is one of the fastest growing segments within bagged snacks, according to UBUK.
Blueberry Cranberry has been added as a new flavour to the go ahead! range and new packaging has been rolled out, supported by a pound;2.5m marketing campaign.
Jessica Wylie, trade pr and communications manager of UBUK, says: “We’re building on the strengths of the go ahead! range using a clear, eye-catching new design that will create stand-out on shelf. The new Blueberry Cranberry variant is set to sell strongly, due to the high demand for super fruits, and we advise retailers to stock up in anticipation of great sales.”
UBUK advises wholesalers to stock the fastest growing top sellers, take out slow selling lines, for major new product launches, display products on temporary equipment and encourage retailers to pass on deals to customers.
According to UBUK, 77% of crisps and snacks shoppers in an independent store will not buy an alternative if their chosen product is not available, so wholesalers should ensure that stock is available for retailers to buy.
In contrast to its major rivals’ multi-brand approach, Procter Gamble’s activities are focused on one major brand in Pringles, the second largest brand in the market.
Pringles is currently the number one social snacking brand and is an integral part of the UK’s massive pound;1.7bn crisps and snacks market, according to P G.
Paul Lettice, trade communications manager of P G, says: “As the crisps and snacks market gets even more diversified, leading brands such as Pringles are making sure they offer consumers a wide variety of snacking solutions and investing in booming segments such as ‘better for you’ and ‘single serve’.”
In May P G launched Pringles Rice Infusions, which are naturally lower in fat aimed at the better for you market segment. “Pringles Rice Infusions offer retailers the opportunity to benefit from a really flavoursome snack that tastes great and is also better for you.”
Mintel says demand for hand-cooked crisps has grown at 20-30% per annum in recent years, as consumers demonstrate that they still want to indulge in the crisp category, and are prepared to pay a premium for the right product.
Kettle Chips are hand-cooked with sunflower oil and 100% natural ingredients in all its products. Kettle says consumers are increasingly interested in what goes into food, how it’s made and where it comes from. Many seek options made without MSG and artificial additives. With 68% of consumers preferring natural foods it is clear that awareness in this area continues to grow.
Kettle has created its Roast Chicken with Rosemary and Thyme as Britain’s first chicken crisp seasoned with totally authentic ingredients. Jeremy Bradley, managing director of Kettle Chips, says: “I’m tremendously proud of the work the team have done. They challenged themselves very hard and had the courage not only to blind test their new product against iconic flavours in our own range but also head to head with competitors who rely on chemical flavour enhancers to deliver taste. I was absolutely delighted for them when the new range consistently out performed.”
Kettle has also launched Sour Cream and Chive, Honey Barbecue and Sweet Chilli.
Looking toward Christmas, the two top selling flavours from the core range, Lightly Salted and Sea Salt with Balsamic Vinegar, will be available in 225g bags. A winter seasoning flavour of Mature Cheddar and Burgundy is also being released.
Ryvita launched Muesli Crunch, a sweet Crispbread, in January and added a fourth variant, Cherry, to the Goodness Bar range. This was followed by the new Ryvita Goodness Bar Luxury range in June.
Anna Cornelius, customer market manager of Ryvita, says: “The wholesale channel is extremely important to Ryvita as it is a vital route to market for the independent trade. We are working to increase the provision of healthy snacks to this channel.
“We are delighted that sales and distribution are exceeding expectations across the Ryvita portfolio, with the growth of healthier snacking products such as Ryvita Minis and Ryvita Goodness Bars driving incremental sales. Ryvita believes that wholesalers are a vital route to market. There is further opportunity for wholesalers to educate retailers in the importance of healthier snacking, which would drive sales further.”
According to Mintel, overall sales of nuts, seeds and dried fruit increased by 34% between 2001 and 2005 to reach pound;449m.
Day Plus One says a brand report based on sales at more than 74,000 grocery stores shows the fastest growing food and drink brands in 2006 were those that are better for people. “For the consumer, organic products are intrinsically linked to this new healthier approach to snack buying. Organic sales have hit the pound;2bn mark for the first time, up 22% on 2005 figures and one in six consumers have purchased packaged organic goods,” Says Adrian Lauchlan, founder and managing director of Day Plus One. “Healthy snacks are no longer the sole domain of specialist health food wholesalers. The market is open and our tailor-made snack mixes allow wholesalers to take advantage of the huge uptake in healthy snacks. With increasingly busy lives, people are looking for something quick and convenient to fill the gap and are looking to retailers to provide it. The sector is now seeing rapid change in what people are demanding. Increasing concerns over the link between unhealthy foods and obesity and new restrictions on the advertising of certain products to children have re-shaped the market as consumers, retailers and wholesalers seek a healthier alternative.”
The wholesale channel is 25% of Day Plus One’s business and it aims to grow this to 50% by 2009. Lauchlan says: “Wholesalers have to offer a full range of staple products, but they are under pressure from supermarkets so it is difficult to significantly grow this sector. The opportunity lies in the unique snack mixes that we produce and pack under the wholesalers’ or their customers’ brand.”
Top snack sellers from Day Plus One are Organic Mango slices, Organic trail mix, Organic berry mix, Organic nut mix and Organic fruit salad.
Jamie Robinson, commercial director of Ocean Spray International Services (UK), says: “The dried fruit market is growing, particularly from a fresh focus on healthy snacking and new products entering this sector to fulfil consumer needs. We foresee a vibrant snacking category growing as retail outlets increasingly offer both traditional and fruit snacks to consumers, especially as impulse buys.”
The Ocean Spray range includes Dried Cranberries, Dried Cranberries with Raisins, Dried Cranberries with Mixed Nuts and Seeds and Dried Cranberries with Tropical Fruits.
Robinson says: “We’re turning our attention to wholesale and cash and carries as Ocean Spray Dried Cranberries 40g packs are an impulse buy. We are working to make sure that the pack formats and variants are right for this rapidly expanding market. We are offering wholesalers a strong commercial plan to build a successful range and category within their businesses.”
Neil Hepplewhite, marketing and business development director of Whitworths, says: “We’re making substantial changes and investment throughout the business. This gives us many more options, additional capacity and the capability to take our healthier snacking proposition into new areas.”
Early in the New Year Whitworths will launch the Love range, a selection of pure fruit and fruit and nut bars into the independent sector. Love Fruit Nut Bars include Macadamia Apricot, Almond, Apricot and Yoghurt and Mixed Fruit Nut.
“Consumers have become wise to products masquerading as healthy snacks. Equally our research has shown that most healthier snacks are perceived as bland or boring. Our challenge has been to develop innovative ‘better-for-you’ products without compromising on taste.” Says Hepplewhite.
Whitworths is also launching Kix, a range of extreme hot ‘n’ spicy beans, initially targeted at the convenience and licensed on-trade channels. The range comprises three 25g products, red hot chilli beans, white hot Japanese wasabi beans and Chinese five spice coated beans.
“Kellogg’s strategy is to grow its snacks portfolio to account for 50% of its business,” says Frances Booth, category management controller of Kellogg’s convenience.
“Kellogg’s believes that wholesalers and cash and carries are instrumental in growing the snack category and so is always looking at ways to work more closely with them to drive a step change in shopper awareness and sales performance.”
Kellogg’s has recently added Special K Bliss and Crunchy Nut Chocolate Peanut Crisp to its foodservice cereal bar range. Andy Phillips, foodservice marketing controller of Kellogg’s Foodservice Solutions, says: “The foodservice cereal snacks market is growing at a rate of 14.6%. Kellogg’s is outperforming in this category and prospects are strong as we own a 53% share of this foodservice snacking market and offer seven of the top ten leading snacks.”
Jack Link’s is offering a range of alternatives to traditional snacks. According to Jack Link’s, increasing numbers of UK consumers are looking for healthier alternatives to crisps and confectionery.
Michael Reuther, European sales director of Jack Link’s, says: “Although beef snack sales are currently a small sector of the snacking category, the growth Jack Link’s is experiencing is dramatic. Our sales are currently 50% higher than last year. Our consumer research shows our sales growth has been fuelled by the consumer trialling the product and then repeat purchasing.”
The UK product range comprises four 25g and 100g beef jerky variants, original, peppered, teriyaki and sweet and hot and three flavours of beef steak nuggets in 25g and 100g packs in original, peppered and teriyaki.
=== Top 10 singles from PepsiCo ===
1 Walkers Cheese Onion
2 Walkers Ready Salted
3 Quavers Cheese
4 Walkers Salt ‘n’ Vinegar
5 McCoy’s Steak
6 Mega Monster Munch
7 Walkers Prawn Cocktail
8 McCoy’s Salt Vinegar
9 McCoy’s Cheese Onion
10 Doritos Tangy Cheese