We’ve come through the credit crunch, but it seems the tough times aren’t over yet. With the Coalition government promising us a new era of austerity, we’ll have to go on watching the pennies for the next few years and looking for value and ways to cut our spending. For the past couple of decades we’ve been cheering ourselves up with snacks when things get tough, because they’ve been relatively cheap. Up to now the market’s stayed buoyant, even when things have been bleak elsewhere. But can snacking escape the ‘Coalition Crunch’?
Crisps and snacks remain one of the largest parts of the snacking products market. Recent data from Mintel, the market intelligence experts shows crisps and snacks continued to recover in 2008, with the market valued at £2.5 billion, 5% higher than 2007. The 2007 market, valued at £2.4 billion, was the first year to exceed 2003 sales value.
According to Mintel bagged snacks’ value sales in 2008 grew as a result of manufacturers responding to two key consumer issues. First, crisps’ ‘unhealthy’ profile improved with the development of baked crisps, increased use of sunflower oil for frying and the introduction of ‘alternative,’ non-potato crisps based on vegetables or wholegrain. These changes have made crisps more acceptable for everyday consumption.
Second, crisps and snacks have been forced to grow up, in the age group they target. Worries over children eating salty snacks have led manufacturers to reposition crisps and snacks as an indulgent treat for adult consumers. This in turn has led to development of a substantial market for premium crisps and snacks.
Can crisps be ‘better for you’? Various manufacturers seem to think so hence the highest growth has been in the ‘better-for-you’ segment. The three main crisp manufacturers, Walkers, United Biscuits and P&G account for more than three quarters of the market, but Kettle, Tyrrells and Burts are the most important suppliers in the fastest-growing segment, premium crisps.
Unlike other grocery markets, crisps and snacks remain strongly brand-orientated with own-label accounting for only a small share (11%). Crisps used to be huge advertisers, with Gary Lineker achieving TV stardom in the early 1990s as the front man for Walkers Crisps. Above-the-line spend has consistently declined over the last five years, although competitions and the use of interactive media are being successfully used to partially compensate for the decline.
Older consumers, more affluent ABs and women tend to eat crisps and snacks least frequently, once a week at most. These groups are the core targets for increased sales of premium crisps and those with a ‘healthier’ positioning. If crisp consumption at school and work has taken a hit, as seems the case, in-home evening consumption is still an important element, especially in the premium market.
The Grocery Trader