Snacking is one of Britain’s most popular pastimes. But snack products are doing more than just satisfying the nation’s between meals hunger pangs. As the pace of everyday life increases, the snack, more often than not, becomes a meal for people on the move. Even children’s lunch boxes are crammed with snacks.
Brand leader Walkers suggests 97% of households are buying savoury bagged products, creating a snacking market worth around £2bn. The total crisps, nuts and bagged snacks market faltered in 2004 with the independent sector down 4% in value, due in part to concern over obesity, but sales of healthy options and premium products are growing.
The independent sector enjoys a substantial share of the snack market but given the pressure on space in cash and carry and independent retail stores, wholesalers are becoming more cautious and selective in their ranging and a large share of the total trade is being driven by promotional activity, with a combination of heavy price discounting and 3 for 2 style offers.
While the market is dominated by Walkers, Quaker, UB, Golden Wonder and P G (Pringles), many smaller businesses on the fringes of the category are making excellent contributions, and some, like Blue Dragon and Patak’s, producing authentic oriental snacks and contributing to new product and premium developments. All may find it increasingly difficult to progress in our sector without a sizeable market spend.
The introduction of limited edition products continually adds interest to a sector which is not lacking in innovation, although one day the NPD boys must surely run out of new tempting flavours!
A healthy view of the market
When the obesity issue started generating headlines a year ago, the snack food manufacturers moved quickly to provide healthier snacking options. As part of a £6m investment, Walkers introduced a new cooking oil – High Oleic Sunflower Oil (HOSO) for its core range of flat crisps. This is a blend of vegetable and sunflower oil producing a ‘better for you’ crisp while maintaining the Walkers taste. The new packs are supported by a £2m TV advertising campaign.
PepsiCo trade marketing manager Nicky Seal comments: “HOSO is lower in saturated fats and has cholesterol lowering benefits. We have already used it for our new Potato Heads brand and it is one of a number of initiatives helping us to offer a range of ‘better for you’ products.”
The new £2m TV campaign featuring Gary Lineker will be aired in April, marking Lineker’s tenth year with Walkers. New Walkers will feature a ‘Same great taste … now better for you’ flash, as well as details of the new oil blend, to ensure consumers are aware of the changes.
Walkers is also investing more than £2m behind its £69m Quavers brand with TV advertising, re-running the popular animated TV ad ‘They’re Floaty Light’ to communicate its lightness. Outdoor posters and consumer sampling follow.
Support coincides with the launch of a new limited edition Quavers Cheese and Bacon flavour Comic Relief pack and a new ‘Under 100 Calories’ multi-pack, bringing together Walkers ‘Better For You’ products, Walkers Quavers, Walkers French Fries and Walkers Lites.
Seal says: “Quavers has broad appeal across all age groups. We are anticipating the brand to grow considerably, and encourage retailers to take full advantage of the TV support.”
PepsiCo’s latest product is Nobby’s, a new snack brand aimed at 17-34 year old males (28% of the population). Nobby’s is a range of ‘blokes’ snacks including ridged crisps, nuts and coated nuts, in real food flavours.
Nobby’s Crisps are bigger and chunkier than regular crisps and come in a variety of stronger flavours, Chip Shop Salt Vinegar, Friday Night Balti Chicken and Straight from the Grill Steak. Nobby’s nuts are available in Classic Salty, Dry Roast and in Crispy-Coated flavours – Sweet Chilli and Smoked Bacon.
The March launch follows research which identified young males wanting a more fulfilling salty snack to satisfy their hunger until the next meal. Seal comments; “Consumer research told us that for many young men, eating habits are often unplanned and impulsive and that most snacks do not adequately fill them up. We believe that with a range of more satisfying snacks and bigger flavours, we have a product to appeal directly to this huge consumer group.”
Nobby’s is supported by a £5m marketing campaign including targeted TV and press advertising, outdoor posters and a sampling campaign at key events like the Carling Cup final.
“Two thirds of crisps and snacks bought on impulse are for immediate consumption,” Seal adds, “While only one third of nuts are bought to eat now. With Nobby’s great product offering and strong brand appeal, we have developed a nut brand for ‘eat now’ that will increase impulse sales across both convenience and licensed channels.”
United Biscuits UK has developed a marketing support programme for its leading savoury snacks brands, including McCoy’s and Hula Hoops. These are among the top five bagged snacks and generate combined annual sales of over £146m. These brands will enjoy an £8m investment in consumer campaigns, special events and the introduction of added value NPD.
With sales of £66m, The Real McCoy’s brand grew by 20% in 2004, reaching almost a third of all UK households and making it one of the fastest growing and most successful savoury snack brands. Sales have almost doubled in four years and the brand is poised to extend into a new sector of the snacks market in 2005.
UBUK is launching its new McCoy’s Specials in March, a range of premium ridge-cut crisps with premium flavours, made from specially selected potatoes. The launch is in response to the trend towards premium snacking amongst adults and meets a gap in the market for a snack with a male bias. Adult premium sharing has shown double digit growth and currently accounts for 21% of bagged snacks category sales. McCoy’s Specials will extend the McCoy’s brand into new eating occasions including evening snacking.
The range will target 25-34 year old men with the TV catch line ‘The gentleman’s crisps’. A £4m marketing support programme including TV, sampling and PR will follow in April.
It is available in four premium flavours in a 160g sharing bag format – Jalapeno Chilli with Cheese, Oriental Ribs, Peppered Rib Eye Steak and Cheddar with Mango Chutney. The three premium flavours in a 50g handy pack format, are Thai Sweet Chicken, Oriental Ribs and Peppered Rib Eye Steak.
Hula Hoops enjoys annual sales of £60m and UBUK plans to grow the brand in 2005 targeting all family members. With a bolder and more contemporary look, the range includes a new Cheese Onion handypack and multipack mixes. Packaging has been re-designed and outer cases stand out better in cash and carry.
It is investing £4m in marketing support for Hula Hoops this year. A new TV advertising campaign breaking in the spring is supported by in-store promotions, on-pack promotions and consumer events in family locations.
Within the wholesale channel there is in-depot point of sale to highlight NPD and retail point of sale for independents, with promotional support to encourage consumer trial.
UB has now acquired Jacob’s, adding to its portfolio well known products including Jacob’s Cream Crackers, Twiglets and Thai Bites.
UBUK has introduced new price marked packs of KP Nuts to capitalise on the increasing consumer trend towards impulse snacking on the move.
The nuts category is the fastest growing segment of the snacks market and KP’s best selling products, Original Salted Peanuts and Dry Roasted Peanuts are now available in 80g price marked packs with rsp’s of 49p and 59p respectively. Both packs performed well in trials producing a 20% increase in sales and a 50% increase in distribution points. Sales of 50g KP Nuts were unaffected.
Number two brand Pringles is investing heavily in its biggest ever on-pack offer. Five product seals can earn consumers £200 off a package holiday. Paul Lettice, P G’s trade marketing manager says: “Pringles Get Ready is simply huge. It is going to be one of the most exciting sales opportunities for retailers in 2005.”
Golden Wonder is making excellent progress with an accelerated programme in savoury snacks NPD. Golden Skins, thick cut crisps with the peel left on, achieved £1m worth of sales in its first 12 weeks. Supported with a £2m media campaign and new flavour developments already under way, the brand looks set to consolidate its position as the star performer in the category. Nik Naks has been boosted by the launch of Naughty‘N’Saucy, containing ginseng, and earning it the name ‘passion pack’. Jon Anstey, Golden Wonder category marketing controller comments: “We are also investing heavily in Golden Lights, our healthy low fat snacking product. Our commitment to NPD is paying dividends, not just for the company, but for the crisps and snacks category as a whole.”
Jon Burton, Trading Controller Landmark
With the market becoming more health conscious, government concerns on health in schools and vending in the public sector, a raft of healthier products is hitting the market.
Walkers’ Mr Potato Heads, for example, contain 33% less total fat. People still demand taste from their snacks but Lite products are not as acceptable due to lack of taste. We are excited by Walker’s launch of Nobby’s, an indulgent crinkle crisp with a range of nuts.
Snacking is still moving to bigger sizes and multipack sales are growing steadily.
Matthew Oxley, Group Trading Negotiator AG Parfett Sons, Aintree
Snack food suppliers want to be seen promoting healthier products and Walkers has been particularly active. In the cash and carry we have created separate bays to merchandise healthier snacks products and I think this helps our retail customers.
We have seen the demise of cheap snacks and the market is moving up to the 20p price point where we still see a big demand. We promote the snacks category heavily in the depot and through our Go Local retail club.
We want larger multipacks but manufacturers are reluctant to supply them. We allow Walkers to pull stock from our depots to support its van sales operations. We think Nobby’s is going to succeed and wonder why competitors are not reacting.