Most Walkers brands delivered strong sales through marketing and NPD, but healthy variants were out of favour
Have consumers fallen out of love with crisps? After years of steady growth, volume sales of bagged snacks dipped 0.5% – despite the growing popularity of multipacks, which were predicted to help drive volume growth. But although volumes are down, value sales are up 6.7% thanks partly to rising potato and oil prices pushing up retail prices but also the success of a number of major brands.
PepsiCo’s Walkers Snackfoods group continues to dominate the crisps market. In fact its grip is now so strong it launched a premium brand – Red Sky – without the Walkers name on it for fear of brand fatigue. But credit should go to Walkers for the very upfront NPD and marketing around its core lines.
Walkers Crisps’ Do Us A Flavour campaign invited consumers to invent six new flavours. The winning Builders Breakfast was announced in May and is now one of Walkers’ 10 most popular flavours.
But the campaign was about more than the concoction of new flavours. The buzz it created helped to boost overall sales, which were up 8.4%, outperforming the market and helping to strengthen its place at the top of the table. Greg Lyons, Walkers’ head of marketing, estimates that 1.1 million people voted for their favourite flavour, one in six consumers tried one of the new flavours and one in 10 tried all 10 flavours.
“Walkers is just very good at engaging with the public and its sales reflect this,” says Trevor Standing, snacks buyer at Nisa-Today’s. “Walkers is the best at marketing initiatives.”
And there was plenty more marketing from Walkers. Gary’s Great Trips gave consumers the chance to win money-off vouchers for leisure activities. And Gazillion Bag Give-Away, exclusive to Tesco, offered one free with the purchase of two six-packs and was supported by radio and outdoor advertising.
Walkers’ other brands have also done well. Walkers’ Doritos Mystery Flavour campaign helped boost sales by 14.2%. They leapfrogged McCoy’s into third place on the table, thanks also to a Guitar Hero prize giveaway, which encouraged Doritos fans to collect groupies on Facebook. Monster Munch was relaunched in its old-style packaging in September 2008 to capitalise on the retro trend and it ran a token-collect offer to buy a Monster Munch t-shirt. It seems to have worked, because Monster Munch sales grew 37%.
Lyons admits Walkers spent “millions and millions and millions” on marketing – but it has paid off in its sales figures across its brands.
“At the start of the year there was a lot of uncertainty as we headed into the recession,” he says. “But we felt Walkers was in the sweet spot – consumers were looking for great value and brands they can trust and something to put a smile on their face. We have been leading category growth because of the fun way we engage with consumers.”
Walkers has also put a great deal of effort into its in-store marketing, with colourful, cheerful point-of-sale material to help the packs stand out on shelf.
And the bad news for Walkers’ rivals is that they are planning something even bigger than Do Us A Flavour for next year, which Lyons predicts will engage with even more consumers.
But Walkers did not have it all its own way. Its healthier SunBites and Baked ranges both suffered sales declines. Its premium range Sensations suffered a 12.1% sales decline despite a snazzy black packaging revamp, new flavours and a TV advertising campaign.
Pringles also launched new flavours this year. Its Xtreme range, launched in July, included Fiery Wasabi and Flamin’ Chilli Sauce to appeal to younger consumers. Despite this, its sales declined over the year by 6.5%, partly as a result of the number of competitors that have launched larger pack sizes designed for sharing. Standing believes the dip in Pringles’ sales could also be partly explained by its lack of promotions in the independent sector. Promotional activity and pricing were key considerations for brands.
“It is a promotion-driven category and that was even more evident than normal this year,” he says. The promotions have changed from bogofs to money-off deals, or two-fors or three-fors for less than £1. There has also been tinkering with pack sizes to hit price points, he adds.
Despite the extensive promotions across standard products, and the recession, it seems consumers are still willing to splash out on premium products. Kettle Chips had another barnstorming year with sales up 16.8%.
However, Kettle Chips now has strong competition from Red Sky, which may slow the brand’s growth next year. And top-end bagged snacks range Phileas Fogg was revived to tap into this market, although it has not yet penetrated the top 20 products table.
Aside from Phileas Fogg, United Biscuits had a fairly quiet year in the bagged snacks category. It reduced the saturated fat content of its Wheat Crunchies and added two pub grub-inspired flavours to its McCoy’s crisps. The limited-edition flavours were lamb & mint and roast beef & horseradish, and were introduced in August.
UB claims volume sales of McCoy’s have been increasing in recent weeks thanks to more aggressive promotions and advertising. It also plans to reduce satfat from more lines next year, including McCoy’s, change pack sizes so that they contain just 99 calories and launch more creative marketing initiatives, such as a giant national hula-hooping event to promote Hula Hoops.
The big question for the category is how to turn around this year’s volume decline. And if market leader Walkers is anything to go by, the best approach might be to get consumers involved.
The World Cup next year looks like the ideal opportunity. Manufacturers are gearing themselves up for a massive sales push to coincide with the tournament, which is expected to see consumers take home snacks to watch the games, which are all being screened on terrestrial TV.
While England dreams of World Cup glory, crisp manufacturers are busy cooking up competition-winning campaigns of their own.
Top launch: Red Sky, Walkers
Red Sky is Walkers’ latest move into posh crisps – not that you’d know that from packets devoid of Walkers branding.
“We wanted it to have its own personality, essence and being,” said head of marketing Greg Lyons. “We wanted to keep it clean and pure.”
Though still some way from breaking into the top 20, Walkers claims consumers have taken to the brand, which was designed to be less oily and crunchy than upmarket rivals.
Top Products Survey 2009