A hunger to munch on the old and new

If you want a lesson in how to grow your brands, you could do a lot worse than look at Walkers this year.

PepsiCo's three-pronged approach of looking back, with the relaunch of retro Monster Munch, looking forward, with the Walkers Do us a Flavour campaign - which invited the nation to design a new flavour of crisp - and combining the two in Doritos Collisions, has generated very positive results for PepsiCo. And its performance in bagged snacks has bolstered what has otherwise been a tough year for the grocery giant and its wide-reaching portfolio, with 11 of the top 20 bagged snacks, and eight of these in growth.

But the jewel in the crown is Walkers, and this year it consolidated its position as far and away the biggest crisp brand in the UK with sales growth making it, at £458.1m, the UK's third-most valuable grocery brand. Doritos, meanwhile, has grown a tasty 14.4% to £87.9m.

And while total sales of Monster Munch dropped 4.9% for the year, this figure belies the strong performance of the brand since its relaunch in September.

Walkers' success is indicative of the entire bagged snacks category, which grew 6.6% to cross the £2bn threshold. Such above-inflation growth has been driven by price increases and premiumisation more than increased volume, which edged up just 1.8%, demonstrating the resilience of the category in being able to pass on higher oil and wheat prices to consumers.

Yet the major players have undoubtedly had to work hard this year. Much of Walkers' success has been down to strong promotion and clever marketing. The crisp giant's adverts have dominated TV screens, with the company spending more than double its nearest competitor on advertising this year. In January it announced it would spend £27m this year to play up its home-grown credentials and in July it launched its successful Do Us a Flavour campaign.

And few fmcg categories have been subject to as much innovation and marketing as bagged snacks has over the past 12 months.

Against a backdrop of tight legislation on advertising to children and a resurgent own-label market, which grew 5.3%, the major players have successfully innovated to regain their place in packed lunches, says Nielsen.

Top Launch - Pringles Select (Procter & Gamble) 
Dr Fredric J Baur, inventor of the Pringles carton, died this year and had his remains buried in one. Whether he will be turning on his cylindrical axis is hard to say but Pringles Select is certainly a departure as it marks P&G's move into bagged snacks proper. As a premium snack, Select is unlikely to cannibalise sales of standard Pringles. It's more likely to steal share from bagged rivals. Walkers Sensations beware.
Walkers' SunBites, which contains a third of the suggested daily amount of wholegrains, is probably the best example. Launched in September 2007, with the brand registered in 18th place this year with a value of £18.1m. Pringles Rice Infusions, launched last year, the new Ryvita Limbos and Go Ahead! Baked Snaps have also successfully tapped into healthier trends.

United Biscuits' Hula Hoops grew 4.8% in value, buoyed by a healthier reformulation, and the launch of a tortilla Hula Hoop this year, but the company had less success with its KP Nuts and Mini Cheddars brands, which fell slightly in value.

The year has also been characterised by an increased focus on the impulse channel, most notably from P&G, which launched standard Pringles and Rice Infusions into the bagged market for the first time in February with minimal impact: sales were static.

This was followed in September by Pringles Select, a six-strong range of premium snacks also in bags, and its premium positioning and clear differentiation from the cartons promise a better future.

Nielsen predicts Select will be the biggest launch in the category for the back end of this year and P&G is throwing its substantial weight behind the launch.

The company spent half of its entire Pringles advertising budget for Select in the four weeks to 19 October alone, so next year's brand figures are likely to be much more impressive.

The brand also appears to have had the last laugh this year. In March the High Court ruled that Pringles should not be classified as a crisp at all and that the brand was more akin to a cake or biscuit thanks to its low potato content and uniform shape.

As a result of the ruling, P&G is now exempt from paying VAT on Pringles, which will save it millions of pounds each year.

Doritos Collisions have also boosted impulse sales, and restaurant chain Nando's new line of premium chips, launched a few months ago, should continue this trend. But the best performance, growth-wise, was a more established premium crisp.

It's worth noting that the retro craze extends to taste as much as brands. Sally Davies, Sainsbury's crisps, snacks and nuts buyer, says: "We are seeing a trend back to retro flavours. The Walkers French Fries Worcester Sauce multipack has been the most impressive launch of the year - shifting more than 60 units per store per week since launch," she says.

Kettle Chips, launched in the UK almost 20 years ago, also had a strong year. It grew sales by 24.9%, pushing it up to seventh place in the table. Sales were helped by the repeat of last year's TV campaign and a 255% increase in advertising on the previous year.

Arguably its biggest rival, Tyrrells, continues to be absent from the list, however. Founder Will Chase sold the brand to Langholm Capital in March this year for a reported £40m and it remains one to watch in the future as its private equity owners are rather less shy about a Tesco listing than its maverick former owner.

View The Grocer's definitive Top Products 2008 survey