Britain is becoming a nation of snackers. The country has munched through a belly-busting 9.1bn packs of crisps, nuts and snacks in the past year, a year on year rise of 1% that’s raised the value of the category by 2.6% to £2.8bn [Kantar Worldpanel 52 w/e 9 November 2014].
This article is part of our Bagged Snacks Digital Feature 2015.
But before the health lobby begins banging its drum about salt, fat and calorie consumption, it’s worth exploring the kind of snacks and brands driving the growth, because ‘healthier’ snacks and premium vegetable crisps marketed on their lower fat content and natural credentials are booming.
Take Walkers Pops. Since bursting onto the scene in February 2014 the air-popped potato crisp has amassed £18m in sales [Nielsen 52w/e 11 Oct 2014], thanks in part to a substantial marketing campaign and in-store activity.
Wholegrain snack Walkers Sunbites has also benefitted from a push on healthier products, with sales up 27.8% to £35.4m. Brand owner PepsiCo is looking to sustain the growth with the extension of Sunbites into savoury biscuits. Crispy Crackers, Pitta Bakes and Crackers and Dip launched this month with support from a TV campaign kicking off on 18 February.
“Healthier snacking options, like Pops and Sunbites, have seen strong growth, showing that shoppers are increasingly looking for better-for-you options that they can enjoy, without compromising on taste,” says Adam Warner, Walkers senior marketing manager, pointing to Walkers’ overall growth of 1.2% to £1.3bn, on volumes up 2.2% [IRI 52 w/e December 2014].
Popped crisps pioneer Popchips believes the attention being given to lower fat and popped crisps will only benefit the US brand, which first launched in the UK back in 2012. “The imitation is flattering,” says Will Bowler, Popchips general manager, who adds there’s room for both Popchips and Walkers Pops in the market.
Popchips’ rack up about a third of the sales Walkers Pops does but for a small brand it has seen huge growth. Sales are up in value by 43.5% to £6.5m on volumes up 50.6% [Nielsen]. Bowler claims Pops didn’t have much of an impact on its sales as they originally targeted the multipack sector.
“The one area we have seen some impact is in the big retailers. PepsiCo have so much pull in single packs so they can leverage a lot of space,” he adds. “We are perhaps not getting as big a range and as much space as we would have liked as we have direct competitors with reasonably big pockets.”
However, Bowler remains unconvinced about how its rivals will fare once Walkers turns its attention to something else. “We have seen it happen with some of the PepsiCo stable in the past,” he says, pointing to Walkers Deep Ridged’s value decline of 32.6% in the past year following the withdrawal advertising investment that had driven strong growth in the previous year.
Other players are also trying their luck with healthier snacks. Following a disappointing year for Hula Hoops – down 8.5% year-on-year to £86.9m on volumes down 16.2% [IRI] – KP Snacks has launched Hula Hoops Puft. This lighter, puffy variant has 101 calories less per bag than the original at 74 calories and will feature in the brand’s 2015 marketing campaign.
“A key area of focus for KP Snacks now and moving forward will be healthier snacking,” says Andrew Riddle, KP Snacks branded sales director. “The recent launch of our flagship healthier snacking brand, Velvet Crunch, represents a massive incremental sales opportunity for retailers.”
With so many mainstream brands vying for a slice of the healthier snacking market, established players in this area are struggling. Snack A Jacks has seen value sales fall 9.6% [IRI] while Special K’s snack offerings have nosedived 41.3% to £8.7m. Even Ryvita is taking a hit with value down 7.3% on volumes down 6.3%.
Judging by Jacob’s performance consumers haven’t lost their appetite for crackers and crispbreads. Its growth - 15% in value on volumes up 11.6% [IRI] - was mainly driven by a re-launch of the brand which saw all crackers and baked snacks (with the exception of Carr’s) brought under the single banner of Jacob’s.
“We supported the range with increased investment across the Jacob’s portfolio as part of our masterbrand strategy, and some of that inevitably supported promotions,” says Ted Linehan, director of savoury brands at United Biscuits.
Promotions have been key in the past year, even for more premium brands. “The crisps market has basically developed itself so promotions are everywhere and more often than not brands are on promotion,” says Andrew Slamin, Kettle Foods marketing director. “Any brand has to fight in that market and promote accordingly.”
Kettle Foods has also branched into healthier crisps, giving them a premium boost. Its baked variant boasting 70% less fat than standard ready salted crisps launched in January followed by vegetable and sweet potato versions in March. This was not enough to bolster volumes though which fell by 6.6% against a minor value drop of 0.9% [IRI].
However Tyrrells’ performance suggests we will pay more for the right snacks. Despite a 9.5% increase in average price, volumes for the brand have increased 16.7% [IRI], thanks to the development of its vegetable crisp range and new flavours. “We’ve done this without any advertising at all, just relying on people discovering us through our distinctive packaging on shelf or reading about us in the press,” says Tyrrells marketing director Jocelyn McNulty.
For a small brand vegetable crisp brand Scrubbys is also finding success, after it secured a listing in Waitrose in August and is on track to achieve £350k turnover for 2014/15 according to co-founder Clare Brumby. She says: “We strongly believe demand for healthier crisps will only continue to grow and has the potential to eclipse sales of the more traditional variety as consumers continue to increase the importance that they place on health and nutrition.”