It's a war of the giants for market share in the snacks sector, while the rest of the players have to be fleet of foot and look for interesting areas with potential
The two giants of the snacking world have been taking different approaches this year, with UBUK concentrating on innovation, while Walkers&' owner PepsiCo has been ploughing most of its efforts into changing formulations and packaging to take the health high ground.
UBUK, for example, has been trying to boost the &'year-round&' quality of many of its seasonal brands, such as its Mini Cheddars Morsos. Mark Sugden, customer marketing director at UBUK, says many people buy into Mini Cheddars at Christmas and it is now aiming to keep households interested throughout the year. And the new product fulfils all the right criteria, he says. &"They&'re topped with real cheese, they&'re for adult sharing, they are healthier than standard products and they are premium.&"
In the nuts category, UBUK has repackaged its KP brand and introduced multipacks in a slightly smaller portion size to suit lunchboxes and has extended its offer to include three premium nut selections.
And from July, UBUK is investing £3m in pushing the growing better-for-you category with a marketing campaign for the relaunch of its healthier beacon brand, Go ahead! - which includes the brand&'s expansion into savoury bagged snacks. The company is also keen on emphasising its credentials as a guru to the retailers despite the fact that it is not the number one player in the field. Says Sugden: &"The major retail partners are very keen to work with us and look to us to bring category expertise. We have invested hard in knowledge, insight into shoppers and creating a supportive relationship with retailers.
&"They may have gone to the number one before, but we argue that there&'s merit in talking to someone who has a category-oriented approach and offers impartial advice.&"
But PepsiCo argues that, despite the emphasis on changing the formulations of its range to reduce fat and salt levels, it has also been responsible for &"invigorating the category through the core&". Sales strategy director Phil Norminton says: &"It would be wrong to say we are not focused on new product development - we are about five times more successful in scale than anyone else. But the focus has to be on how you deliver a strong and thriving core business, as well as innovation. That&'s more than flavour extensions. Potato Heads would be a good example.&"
But whatever each company comes up with next, some industry commentators think a greater spread across the market would be better for the category as a whole.
Duncan Hill, commercial director at Trigon Snacks, owner of Planters and Big D nut brands, says: &"I don&'t think any market dominated by one player is healthy. To have two or three allows for competition, which has to be good for everybody. It&'s not good that Walkers has 60% of the crisps market.&"
With even fewer companies to challenge the dominance of Walkers, after Golden Wonder went into administration earlier this year, Hill says it is becoming increasingly harder for the smaller players.
&"We&'ve got two main players and it will be difficult to change those dynamics. Both UBUK and Walkers have the money and the rest of the players have to be fleet of foot and look for areas with potential.
Nuts
looking back what we said in 2001
Trends & Developments
Trends & Developments
CONSUMER FEEDBACK
Good press puts nuts in limelight Nuts have again been a huge success this year, achieving double-digit growth and managing to establish themselves well outside the core traditional Christmas trading period. The nuts category grew by 15.2% in value [TNS 52 w/e 26 March 2006], adding to the 11.6% growth the year before. And much of this success appears to be down to their health credentials. "Nuts are getting a very good press at the moment for health reasons and the fact that people have been turned off by the crisps market because of the saturated fat content," says Dormen Foods MD Michael Brooks. "Toasted seed and nut mixes are being used for cooking and snacking and are driven by things such as Gillian McKeith's TV show You Are What You Eat ." Sun Valley has taken that effect literally and launched a snack range based on the TV programme. Marketing manager Jonathan Barr says: "The nuts and seeds sector of the snacking industry has always been niche but is now clearly moving mainstream. Supported by programmes such as You Are What You Eat, consumers have become far more health-conscious." The two varieties available, Nothing But Nuts, Fruit & Seeds Mix and Sensational Natural Seed Mix, are manufactured by Sun Valley on licence from Celador International, the first food licence awarded by the company. Phil Norminton, PepsiCo sales strategy director, puts the success of the sector down to the Nobby's brand, which the company launched last year. "Nuts are growing on the back of Nobby's," he says. "It's the first time in years that anyone had put an ad behind the category." The brand will be capitalising on its blokeish appeal this summer with a £700,000 on-pack promotion running for the 12 weeks leading up to the 2006 World Cup final, through which consumers can win a pub in where they can watch an England game, complete with beer and snacks. Norminton says: "Crisps and nuts are the snacks most blokes prefer to eat while they're watching football - Euro 2004 drove an extra £1m a week in crisp sales during the tournament [IRI Omniscan, 2005]." The company is also launching Tangy BBQ coated nuts to accompany its successful Sweet Chilli version to increase its presence in the category. Rival UBUK's KP brand has introduced multipacks of five varieties to tap into year-round occasions, offering packs of original salted peanuts, variety mixes, chocolate mixes and two ranges called Treat and Simply. The company has also entered the premium category with pistachios and cashews. The nuts sector is also an area in which smaller players have really managed to gain a footing. Hand-cooked crisps manufacturer Salty Dog Brands, for example, expanded into the nut category last month with a three-strong range of salted peanuts, salted cashews and dry roasted peanuts following on from the success of its crisps. The company is initially aiming its products at pubs and clubs to gain a foothold in the category and is using the size of its packs to differentiate itself from its competitors. All the nuts come in 45g packs, which sales director Judy Willis says add a point of difference. "We felt that people would rather have a decent-sized portion and pay more, rather than a 25g or 30g bag." Meanwhile, specialist nut producer Dormen Foods recently launched two premium healthy nut snack varieties as well as a new brand identity that builds on its heritage. Baked Unsalted Nuts & Fruit - a selection of cashews, almonds, mangoes, papaya, jumbo raisins and Brazil nuts - is being sold in Tesco , while Speciality Baked Unsalted Nuts & Berries - containing cashews, almonds, cranberries, macadamias, raspberries and strawberries - is being targeted at Harvey Nichols, Fortnum & Mason, Partridges and other premium retailers. Even fair trade nuts are increasing their presence on the shelves. In March, Tesco and The Co-operative Group started selling Brazil nuts and roasted, salted peanuts. The Brazil nuts are from the Pando region of Bolivia and are sold under Tesco's own label, while the peanuts are from Malawi in the southern African region, and were the world's first to carry a fair trade mark. They are sold under The Co-operative Group's label. Duncan White, a director of supplier Twin Trading, whose products all carry the Fairtrade mark, said: "These products are the first steps towards opening up the mainstream market for fair trade nuts in Europe." Duncan Hill, commercial director at Trigon Snacks, the company behind nut brand Planters and Big D, says mixes and exotic nuts are particularly the realm of specialists. "Both KP and Walkers have to have volume going through their plants but smaller players don't need that to get decent efficiency, so they are looking at niche areas. Seriously low-fat fruit, nut and seed products would not interest KP or Walkers." Hill adds: "In nuts, own label is more commoditised than brands. Therefore a brand has to try to offer something that's different but that complements the own-label range. That's easier said than done." And he reckons that nuts are not as pricey as some might think. "Twenty years ago a packet of cashews cost about £1 - and it still does today," says Hill. n
Good press puts nuts in limelight Golden Wonder's category marketing controller Kirtsy Brett provided a rather prescient view of the crisps, nuts and snacks market when we covered it in the 30 June issue back in 2001. Brett laid the blame for stagnant sales in the category at the door of the multiples' pricing and promotion strategies, saying that saturation point had been reached in terms of volume that was sold on promotion and that value was flat as a result of this. However, she did say that it was an improvement on earlier in the year, when value was in decline because of the retailers' Every Day Low Pricing strategies. Back in 2001, Golden Wonder was the third biggest crisp brand in the UK, according to figures from IRI, behind only own label and crisp giant Walkers. McCoy's was just behind Golden Wonder in fourth place, so it shows what a difference a few years can make. Health may be the watchword in 2006, but in 2001 manufacturers were more concerned with building the indulgence areas of the market and targeting snacking throughout the day. Increasing the size of snacks to ensure consumer satisfaction was also a key driver. As KP marketing director Mandy Ferguson said: "It's hunger-fill. People want more filling snacks in and out of home. We see the opportunities for adult lunchboxes." However, the rise of premium, hand-cooked chips was already being seen with growth being recorded in baked, crisps, bread sticks and crackers, with Kettle Chips the fifth largest crisp brand, according to IRI. Nuts, which have experienced double-digit growth in the past year and which have flourished as a result of the obesity debate, were not so popular five years ago. TNS figures show that the category was down 1% in value and 5% in volume in 2001.
Good press puts nuts in limelight UBUK has extended its Crispy Fruit Slices brand by launching it in a mini bagged format to target what it says is the growing number of grazers in the UK. Minis Crispy Fruit Slices are available in apple & sultana and orange & sultana in packs of five 30g bags (rsp: £1.55). All products carry new lower-fat and lower-calorie messages on pack as well as clear amounts per serving. ?Sun Valley is launching Pretz, a range of low fat pretzels in two varieties - Worcester Sauce and Sour Cream & Onion. The 'twisted little pretzel snack' has less than half the fat of a standard packet of crisps. The company has also introduced small, healthy bags across its You Are What You Eat range of seed, fruit and nut mixes. They were previously available in resealable 100g packets, but the new 40g bags are said to be the ideal size for a pick-me-up or between-meal treat. Meat snack specialist Cruga is aiming to turn biltong - a type of dried meat from South Africa - into a mainstream snack in the UK, with the launch of a bagged range. It is tapping into the rising popularity of meat snacking with beef biltong in original, chilli and pepper flavours, while targeting adventurous consumers through the ostrich and kudu varieties. The company hopes to secure listings in independent stores as well as UK pub chains in the next few months. Adult crisps brand Salty Dog has made its first appearance in the multiples with a new flavour and sharing format. Asda is the first big retailer to stock it in 150g sea salt and sea salt & malt vinegar variants, as well as the latest flavour, black pepper & ginger. The products were previously available only in 35g and 50g bags.
Good press puts nuts in limelight ?In a first for the brand, Kettle Chips is launching its 2006 summer seasonal edition in response to a public vote. As a result of the growing number of ideas being sent in by the public, consumers were invited to log on to the company's web site to nominate their favourite seasoning. The winner, buffalo mozzarella, tomato & basil, is made using mozzarella specially sourced from Southern Italy. Empire Food Brokers is adding to its range of premium imported American food brands with the introduction of Mrs May's Slow Dry-Roasted Snacks. Previously unavailable in the UK, Mrs May's Naturals crunchy nut and seed snacks, with no artificial colours, flavours or additives, offer a healthier alternative to high-salt crisps and peanuts. ?Zesty lime & coriander is the latest addition to Quaker's Seasons range. The mini crispbread snacks, which contain less than 10% fat, join the other variants in the range - Caribbean chicken, cheese, onion & chive, and sun-dried tomato & basil. PepsiCo trade marketing manager Cara Beeby says: "In our consumer taste trials, Zesty lime & coriander proved very popular. We believe the new flavour will be a fantastic addition to the range and a further great opportunity for retailers." ? Tyrrells has added mini baked breadsticks to its premium hand-cooked potato and mixed root vegetable chips range. The new entrants are available in sour cream & chive and sweet Thai chilli flavours in 35g snacking bags. Will Chase, founder of Tyrrells Potato Chips, says that the range will target new consumers and also those with smaller appetites.
Good press puts nuts in limelight Health has always generated concerns at some level in crisps and snacks, but over the past year it has moved very much centre stage. This is not only in the positioning of most of the major new products but, more importantly, in the mindset of consumers. This reflects a noticeable shift in the way consumers view the market. Excitement during the flush of new premium products in recent years was palpable, but the buzz has increasingly gone from the market as guilt over the fat content has built up. Respondents claim to be cutting down - if not cutting out - the quantities of 'fatty' snacks they are eating. But some seem to have gone beyond the 'naughty but nice' justification for at least an occasional purchase. In this context the wave of healthier new product options has been welcomed. Crunchiness is now an acceptable characteristic. The taste profile and overall flavour 'hit' have also moved into sharper focus, with consumers looking for strong, authentic tastes. Hula Hoops Ridges - Totally Cheesy/Steak
& Onion SCORE: 45 AVERAGE: 37 New format Hula Hoops Ridges carry a claim to be seriously crunchy and 45% lower in fat. Consumers loved them, with taste and texture achieving upper quartile ratings. Kettle Crispy Bakes - Tomato & Basil SCORE: 40 AVERAGE: 35 Consumers responded strongly to 'something a bit different' from Kettle. Achieving good ratings for taste and texture, despite their low-fat content, these snacks proved particularly popular in the Midlands and in the north. Pringles Light Aromas - Red Pepper SCORE: 41 AVERAGE: 35 With 33% less fat and a touch of Olive Extract, these Light Pringles played the health card to good effect. Consumers of all ages loved the 'not too hot or spicy' flavour and didn't notice any difference in the texture.
The two giants of the snacking world have been taking different approaches this year, with UBUK concentrating on innovation, while Walkers&' owner PepsiCo has been ploughing most of its efforts into changing formulations and packaging to take the health high ground.
UBUK, for example, has been trying to boost the &'year-round&' quality of many of its seasonal brands, such as its Mini Cheddars Morsos. Mark Sugden, customer marketing director at UBUK, says many people buy into Mini Cheddars at Christmas and it is now aiming to keep households interested throughout the year. And the new product fulfils all the right criteria, he says. &"They&'re topped with real cheese, they&'re for adult sharing, they are healthier than standard products and they are premium.&"
In the nuts category, UBUK has repackaged its KP brand and introduced multipacks in a slightly smaller portion size to suit lunchboxes and has extended its offer to include three premium nut selections.
And from July, UBUK is investing £3m in pushing the growing better-for-you category with a marketing campaign for the relaunch of its healthier beacon brand, Go ahead! - which includes the brand&'s expansion into savoury bagged snacks. The company is also keen on emphasising its credentials as a guru to the retailers despite the fact that it is not the number one player in the field. Says Sugden: &"The major retail partners are very keen to work with us and look to us to bring category expertise. We have invested hard in knowledge, insight into shoppers and creating a supportive relationship with retailers.
&"They may have gone to the number one before, but we argue that there&'s merit in talking to someone who has a category-oriented approach and offers impartial advice.&"
But PepsiCo argues that, despite the emphasis on changing the formulations of its range to reduce fat and salt levels, it has also been responsible for &"invigorating the category through the core&". Sales strategy director Phil Norminton says: &"It would be wrong to say we are not focused on new product development - we are about five times more successful in scale than anyone else. But the focus has to be on how you deliver a strong and thriving core business, as well as innovation. That&'s more than flavour extensions. Potato Heads would be a good example.&"
But whatever each company comes up with next, some industry commentators think a greater spread across the market would be better for the category as a whole.
Duncan Hill, commercial director at Trigon Snacks, owner of Planters and Big D nut brands, says: &"I don&'t think any market dominated by one player is healthy. To have two or three allows for competition, which has to be good for everybody. It&'s not good that Walkers has 60% of the crisps market.&"
With even fewer companies to challenge the dominance of Walkers, after Golden Wonder went into administration earlier this year, Hill says it is becoming increasingly harder for the smaller players.
&"We&'ve got two main players and it will be difficult to change those dynamics. Both UBUK and Walkers have the money and the rest of the players have to be fleet of foot and look for areas with potential.
Nuts
looking back what we said in 2001
Trends & Developments
Trends & Developments
CONSUMER FEEDBACK
& Onion
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