Consumers are still stuck on their savoury snacks, but more healthier options on the market means that retailers are spoilt for choice
Whether it’s baked, fried, salted, de-shelled or popped, everyone seems to appreciate a savoury snack. In impulse, the snacking segment is worth £525m (Kantar Convenience, 4 December 2016) and independent stores each sell on average 273 packs of savoury snacks every week (Nielsen 3 September 2016).
An impressive, but not surprising, 93% of people eat snacks, with 63% of those snacking at least once a day. What’s more, 82% of shoppers buy snacks on impulse (HIM 2016) and a 18% snack on the go (Mintel, 2017).
According to Mintel’s Consumer Snacking UK 2016 report, 16- to 24-year-old consumers are the UK’s biggest snackers with nearly four in five (79%) consumers snacking once a day or more, compared with 62% of snackers over the age of 55. This is attributed to the busier lifestyles of the younger group of consumers breaking with the rigidity of traditional mealtimes.
Research also shows that those who eat often tend to have a lower BMI (British Journal of Nutrition/Woman’s Health September 2016) and people are frequently being advised to eat little and often in order to keep control of their waistbands.
David Wyatt says his year-on- year sales of savoury snacks and crisps keep increasing, while sales of confectionery and chocolate decline slightly. He puts this down to people wanting to avoid sugar.
“Crisps keep on selling well, especially Walkers, despite people’s growing concerns around health. I think it’s because they know these are more substantial and less sugary than other snacks such as chocolate bars. Walkers cheese & onion crisps are our top seller.”
David could well be right. Limiting sugar is the UK’s biggest concern, with 53% of consumers admitting to reducing their sugar intake (Nielsen Homescan Survey 2016).
Better-for-you snacks in general are in growth and are becoming more mainstream, with 71% household penetration and purchase frequency – an increase of 6% year on year (Kantar data to 23 April 2017).
Retailers have been noticing this shift. “We are definitely seeing a growth in healthier snacks,” asserts Richard Dance, of Co-op Welcome Marchwood in Southampton.
“There’s been a real growth in sales of lentil crisps and rice crackers, and these sorts of light savoury snacks,” he says.
David Knight, of Budgens Hassocks and Henfield, says crisps made out of foods other than potatoes seem to appeal to people who want to eat healthy or want to avoid certain foods. “The new organic Eat Real hummus and lentil chips are really popular. The range is suitable for vegans, gluten-free and all other special diets. We’ve got the impulse and the sharing bags.”
KP Snacks must-stock core range
KP Snacks’ range of crisps and snacks is growing at 4.9%, ahead of the overall category (Nielsen MAT 31 December 2016). The firm says retailers should stock the following top sellers:
McCoy’s grab bags flame-grilled steak, salt & vinegar, cheddar & onion – growing at 10% (MAT 31 December 2016) and currently worth £103m RSV
Hula Hoops (£87m RSV) Big Hoops BBQ beef £1 PMP – the second fastest-selling sharing sku within convenience, growing at 9.5% yoy
KP Nuts (£58.8m RSV) – 67% growth to the category, with its £1 PMP range growing at 20.2%
Pom-Bear (£27.7m RSV) – extremely loyal consumers, with a repeat rate of 50%.
Source: Nielsen 52 w/e 28 January 2017
Core to the range are the hummus, lentil & quinoa chips (containing up to 48% less fat than traditional potato crisps), quinoa puffs and veggie straws.
A similar concept is the Burts range of Lentil Waves and Quinoa Crinkles, which contain at least 40% less fat than traditional potato chips, and less than 100 calories per bag. They, too, are gluten free and a source of fibre.
Mintel research has shown us that healthy aspects of snacks, such as fibre and protein, make an indulgent snack more acceptable. Nuts provide a high amount of fibre, as well as protein, which is becoming more and more important to today’s shoppers, with 24% looking to increase protein in their diet (Mintel 2017). What’s more, 76% of people believe nuts are a good source of energy.
And nowadays there’s plenty of healthy snacking options to choose from. When natural, no additives/preservatives, and organic claims are combined, those claims account for 23% of launches in 2016, according to Innova Market Insights. Gluten-free, the leading claim globally, accounted for 12% of launches.
According to Innova Market Insights, snack nuts and seeds such as trail mixes, accounted for more than 30% of snack launches in 2016, up from 26.5% five years previously. Factors driving that growth include new research on nuts’ health attributes, greater availability of various nut types, and technological advances allowing for new coatings, flavours and packaging formats.
Get a bigger bite at sales
The crisps, snacks and nuts category is a busy one, and with so many brands looking to drive visibility and compete at the fixture, npd has become more important than ever before for getting that cut-through.
In spring this year, Burton’s Biscuit Company announced a design refresh for Cathedral City Baked Bites. the cheesy-flavoured savoury snack.
Made by Burton’s under licence from Dairy Crest, the brand benefits from new pack designs aligning the range with the Cathedral City masterbrand (£258m RSV, SIG Grocery Outlets 52 w/e 31 December 2016).
The packs are rolling out across the range, including the 35g grab bag (rrp 59p) and six-pack (rrp £1.89).
David Costello, head of category and shopper management at Burton’s, says that by aligning pack designs with the Cathedral City masterbrand, the brand is giving retailers a unique opportunity to drive growth within the savoury snacking category with the nation’s favourite cheese.
The fruit, nuts and seeds category is now worth £2.8m (IRI Nut, Seeds & Fruit Mix Data Dip, Supermarkets MAT September 2015).
Richard says he sells a lot of own-brand roll-pack pouches of dried fruit and nuts and these provide healthy nutrition for customers, and healthy margins for himself.
Louise Hammond, owner of a Mace forecourt store in Halesworth, Suffolk, agrees that the trend towards healthier, more wholesome foods may be the reason for an increase in sales of nuts in her store. However, she points out that many of the popular varieties are those highly-flavoured and salted varieties which aren’t necessarily the best choice for health fans.
Simon Lunn also stocks a wide variety of nuts in his Simply Fresh store in Axebridge, Somerset. He says that with summer under way, people are steering away from chocolate because it melts and because it doesn’t do anything for their beach bodies.
“Our Nature’s Table packs of nuts, dried fruit and seeds are very popular. We sell them in big bags at between £1.30 and £1.50. We tried selling these in single impulse bags, too, at between 80p and 90p, but these really didn’t sell well at all so we’ve gone back to just selling the bigger bags.”
The trend towards high-protein snacks has also led to an increase in consumption of meat snacks in the UK – up by 17% over the past two years to top £149m (Mintel Crisps, Savoury Snacks and Nuts UK. January 2016).
Richard has seen this in his store and, again, these provide high margins. “The other trend I’ve noticed is for beef jerky, which I guess is from people wanting a more filling and substantial snack which also is high in protein.
“These have a substantial price point, too, as they are £2.50 each so quite a big spend.”
snacks with versatility
Ritz Crisp & Thin is now available in cream cheese & onion, sea salt & vinegar, sea salt & black pepper, sweet red chilli, roasted chicken and lightly salted.
Each flavour is available in sharing and single bags, to meet both entertaining and on-the-go occasions and to demonstrate the versatility of the savoury category.
Mondelez International trade communications manager Susan Nash says: “Innovation continues to be a key driver of incremental growth with crisps & snacks, as the market moves beyond the traditional fried potato snack. Ritz – with its rich baking heritage and expertise – is ideally placed to bring exciting new products to the category.
“Following launch in May 2015, Ritz Crisp & Thin was highly incremental to the category and became the number one contributor of growth to the crisps & snacks arena (IRI w/e 12 June 2016). It also had one of the highest repeat rates of all new product launches in the category in the past five years, reaching 31.8% (Kantar Worldpanel – MAT w/e 19 June 2016).
“Ritz Crisp & Thin continues to invest in marketing. For example, the brand returned to the small screen in February 2017, with a multi-million-pound campaign which aimed to bring to life the Ritz Bakery with the tagline ‘Baked to Perfection’. Two 20-second TV commercials, which ran until mid-May, saw the doors to the Ritz Bakery flung open, immersing viewers in a place where fresh ingredients fly through the air.
“The success of Ritz Crisp & Thin is an indication of the growing significance of savoury snacks and the consumer demand for snacks that taste great but are more permissible than traditional crisps.”
Susan Nash, trade communications manager at Mondelez International, says the increased awareness of healthier eating is shifting shoppers away from fried snacks and towards products which are baked. As a result, the crisps category is seeing a decline of 6% in value sales, while popcorn and savoury snacks are growing at 1.6% and 13.9%, respectively (IRI 1 January 2017).”
Simon Biddle agrees that popcorn is grabbing sales. “Popcorn is a very good seller. In the past we might have had one sku of popcorn and now we have loads of different varieties which all sell really well.”
There is a plethora of flavours within this category but apparently it’s the sweet and salted variants which are on trend.
Tyrrell’s launched ‘Poshcorn’ in 2016. Sweet & salty is the star performing flavour in the category, representing £49m of the £130m category.
Also following the trend for sweet and salty flavours is Tyrrell’s new toasted marshmallow Poshcorn, which captures the taste of a British campfire favourite.
Sarah Lawson, marketing manager at Tyrrell’s, says: “Sweet and salted is a continuing trend, which appears in Tyrrell’s latest vegetable crisp innovation launched in April. Tyrrell’s veg crisps with maple aims to complement the best-selling mixed root veg SKU, delivering sweetness on a mix of naturally sweet vegetables such as sweet potato and carrot.”
The reasons for caring about the ingredients in food doesn’t end with health. Canadean Localism Consumer Insight (November 2014) states that 77% of shoppers find provenance on pack appealing.
What’s more, the Soil Association Organic Market 2017 has reported that in 2016, total sales of organic products increased by 7.1%.
Simon Knight, sales & marketing director at Burts Chips, says the brand’s chips appeal to these consumers, adding: “All our crisps are made using British potatoes and whenever possible using ingredients sourced from suppliers close to our home in Devon.”
Popcorn expands and rebrands
A new salted caramel flavour has been added to impulse packs of Metcalfe’s Skinny popcorn to capitalise on the popular “sweet and savoury” trend.
The sku contains 30% less saturated fat than typical salted caramel popcorn available on the market, the company says.
The brand has also extended its updated packaging design, introduced at the end of last year on Metcalfe’s Skinny popcorn, to Metcalfe’s entire range.
The updated look will be rolling out across the range of Metcalfe’s Popcorn Crisps, Popcorn Thins, Popcorn Thins Minis and Rice cakes.
The new packaging combines bold colour schemes with simplified layouts and messaging, aiming to appeal to a broad consumer base while at the same time providing additional standout on shelf for the brand.
The company says salted caramel will bring further excitement to the category and believes the new packaging will help drive continued growth across the range of Metcalfe’s products.
Head of Impulse Andy Verney says: “Recent trends indicate a rise in consumer demand for sweet & savoury flavours and lighter, better-for-you snacks, so we’re excited about salted caramel – a product that ticks both boxes.
“We’re also pleased to extend the updated packaging design across the range, which provides much more impact and successfully brings Metcalfe’s lighter brand personality to life.”
The new seasoning and packaging follow Metcalfe’s Skinny’s ‘Pop It Like It’s Metcalfe’s’ TV advertising campaign which ran this March and April, offering consumers a look behind the scenes at their fictional ‘Popcorn Lab’ and the unusual ways they generate the energy needed to pop their popcorn.
Metcalfe’s Skinny is growing by 5.3% year on year and is now purchased by a record number of households (2AC Nielsen, Total Coverage, Popcorn epos value sales MAT w/e 22 April 2017).
Burts has also recently been awarded the Red Tractor stamp of approval – the UK’s largest food assurance scheme – for being the first licensed crisps manufacturer to use accredited British potatoes which are farmed responsibly, processed and packed in the UK. The Red Tractor logo will appear on Burts Chips’ 40g packs from this month and 150g packs from September 2017.
Within the savoury snacks category, sharing bags last year made up nearly 25% of all consumption occasions (Kantar Convenience, 4 December 2016) and growth in sharing packs has accelerated in impulse over the past 52 weeks (Nielsen data up to 7 January 2017).
Sharing bags are in 3.6% growth and better-for-you single-serve is in 5.3% growth (Kantar Convenience, 4 December 2016).
David Costello, head of category and shopper management at Burton’s Biscuit Company, says the sharing mission is key, particularly in convenience, with the growth of sharing packs mainly coming from shoppers spending more on top of spend on multipacks and grab bags.
He explains: “The popularity of the Big Night In occasion has grown significantly in recent years and this, coupled with consumer interest in value, has driven demand for sharing formats. Similarly, the Not Going Out occasion – when everyone is at home together and looking for something a little more indulgent or ‘treaty’ – is also in major growth, with share packs representing 88% of Not Going Out sales (Kantar 15 September 2016).
“Sharing packs enable retailers to cater to specific shopper missions, including Big Night In and Not Going Out, or for people looking for larger packs to share with friends and family.”
But the popularity of sharing bags isn’t necessarily just due to the big night in occasion. Louise Hammond in Halesworth points out that many people are buying bigger packs simply because they’re better value.
“Savoury snacks and nuts are all about pricemarked packs (PMPs)and high-value packs. You can either pay the thick end of a pound for an impulse bag, or you can pay a round pound for a sharing bag. It doesn’t really fit the health trend as people know they don’t actually necessarily want or need to eat that much, but they can’t resist the better value.
“Also, in a forecourt store, people don’t really seem to think about how much they’re having to carry home, or how much they’re eating in the car! Also, if there’s a group of people in a car they might be peer pressured by group car pressure!”
Louise says they usually try to avoid PMP packs in the forecourt as they need to make up for the low fuel margins, but they’ve given in to the want for PMPs within the snacks category.
Raj Aggarwal, who owns two Spar stores in Leicestershire and Sheffield, says it’s essential to have a good stock of multipacks, sharing packs and single grab bags. He says that while the sharing occasion is definitely in growth and people are looking for value through multipacks, he also finds his 39p PMP grab bags are extremely popular.
KP Snacks says its Wheat Crunchies and Skips brands are growing at 17.9% and 8.5%, helped by their 39p PMP packs and ‘3 for £1’ promotions, driving sales of KP Snacks 39p PMP portfolio at 29% year on year (Nielsen 52 w/e 28 January 2017).
Matt Collins, sales director for convenience, wholesale, discounters & foodservice at KP Snacks, says: “Our £1 PMP range in particular is performing incredibly well and growing ahead of the total £1 PMP market (up 45.8%, MAT 31 December 2016).”
Placing crisps and snacks on promotion has become a great driver of incremental spend, with 31% of shoppers purchasing items on deal as opposed to just 18% when they’re not on offer. PMPs are also a great way to help communicate value to shoppers and have been proven to be a successful tool in driving impulse sales. Some 43% of consumers believe that PMPs signify a promotional price, making them more likely to purchase a product, and retailers concur with 83% agreeing that they sell faster than plain packs (HIM 2017).
“Multipacks are the best sellers, along with the £1 PMP bags,” Raj says. “It’s important to show your customers that you are providing them with good value products. PMPs provide them with that comfort.
“Doritos sharing bags are very popular when they are on promotion. We sell those for £1 and the Doritos dips for £1 and they fly out when they are on this deal. This offers an easy choice for people for their big night in and provide great value for money.”
KP Nuts points out that 71% of impulse occasions containing alcohol include at least one snack product. This is one big reason for the demand for more sharing snacks. The snacking giant has answered this need with the launch of two new limited-edition KP Nuts summer caddies.
Matt Collins, sales director for convenience, wholesale, discounters & foodservice at KP Snacks, says retailers can help encourage cross-category purchases by grouping products such as snack foods, bottles of wine and beer, as well as sharing bags of crisps and nuts.
Chris Gallacher, managing director of Dynamic Retail, which has nine Scotfresh convenience stores across the central belt of Scotland, has noticed this trend for snacking with alcohol and has added a new range of premium snacking to his stores. These have been positioned adjacent to the alcohol section, and dual-faced for lunch and evening shoppers. He says this will be their big growth area in the future.
“There is no doubt consumers are looking for something different from a c-store. They are trading up to premium wine, gin and vodka. And doing the same for snacking.”
Simon Lunn says that snacking with evening drinks is one of the main occasions behind his shoppers buying snacks, especially when it comes to his sharing packs of nuts.
Simon Biddle says shoppers at his Simply Fresh store in Redditch, Worcestershire, love to buy pork scratchings with their beer. “Pork scratchings are my surprise big sellers. I sell a selection of brands and flavours and have about five different skus.
“I keep them with the alcohol and they sell in the evenings, when people come in to buy their beers then they will want a snack to eat with their drinks. People definitely like to snack while drinking and I find a lot of my sales of sharing snacks happen in that after-work rush and during the weekends.”
Sensational sales with Walkers
Simon Lunn says crisps will always remain popular with shoppers at his Simply Fresh store in Axebridge, Somerset, whatever the macro trends.
“There’s such a huge variety of flavours and brands, but I just stick to the best-sellers as I know these will always go,” he says.
Walkers is the number one savoury snacking brand (Nielsen Scantrack 2016) and 16 of the top 20 selling single-serve crisps and snacks are PepsiCo products (Nielsen for Impulse & Sales Out for wholesale).
The top 30 single-serve lines in impulse account for more than half of all single-serve sales in Impulse (Nielsen Scantrack 2016).
Walkers has expanded its Sensations range with the launch of three exotic flavours. Japanese sweet wasabi & ginger flavour and chargrilled steak & chimichurri flavour have been added to the crisp range (150g packs), while mango & red chilli chutney flavour has joined its Indian-inspired poppadum range (82.5g packs).
The range has also been given an update, including a more modern, premium packaging design, supported with marketing featuring a TV advert which is running now until mid-August.
The campaign centres around the Rio Carnival and Holi Festival in India, bringing to life the new positioning of “Sensations. A Feast For The Senses”.
The Oven Baked range has been given a revamp, too, highlighting the fact it contains 50% less fat. Roasted chicken & thyme flavour has been added to its multipack offering, while Italian herb flavour joins the Crispy Crackers range.
The brand’s £1 PMP range has been extended to include family favourites Squares salt & vinegar flavour, French Fries cheese & onion flavour and Walkers Max Steak.
PepsiCo £1 PMPs currently make up more than 50% of all PMP sharing in independents and are in double-digit growth (Nielsen 52 w/e 14 January 2017), so extending the range offers retailers a real opportunity to drive footfall into store, the company says.
The PepsiCo online rewards and category management website offers more information on how to make the most of snacking sales. Go to www.countsformore.co.uk.
Simon says that placing snacks with alcohol is useful in two ways – it encourages cross-category sales and it is where shoppers queue for the tills, so also boosts impulse sales.
Shoppers expect to find savoury snacks in several locations around the store, according to Pepsico Convenience research 2016. These are near confectionery, at the sandwich chiller and at the till point.
Pepsico suggests that retailers prioritise their snacks first with their sharing next to their beers, wines and spirits and soft drinks, as well as other high footfall areas. After this, retailers should put some snacks with their sandwich chiller display and at the till points.
Alex Albone, founder of Pipers Crisps, says that while crisp sales overall may be in decline, the premium crisp category is continuing to grow strongly. “We’ve experienced growth of more than 20% per year for a number of years, with premium crisps stealing market share from ‘mass market’ crisp brands. This shining star in the crisps category offers retailers a great opportunity to drive revenue and margin.
“We believe it’s because consumers’ food tastes have become far more sophisticated in the past few years. They are more discerning in their choice of all foods, including snacks; they’ll actively seek tasty, high-quality options in preference to mediocre, commonplace crisps whenever there’s a choice. For these shoppers, it’s not about price; much more important is the satisfaction they get from the quality of the food they consume.
“This means emphasis on flavour and texture is vital.”
Sarah Lawson, marketing manager at Tyrrell’s, says chilli continues to increase in popularity as consumers become more familiar with a wide number of named chillies, recognising them for the variety of flavours they can add versus just the level of heat.
Simon Biddle agrees that there is a trend towards hot and spicy snacks. He says npd from Doritos has concentrated on the spicy flavours and these have been very popular in his store.
Doritos Roulette features tangy cheese flavour Doritos, but one chip in every handful is so spicy “it may bring you to tears”, according to the company. Other flavours include Heat Burst BBQ & chilli, and chipotle cream & chilli.
Simon adds: “People aren’t spending a lot on each item in the category so they are likely to want to experiment with interesting flavours. While you might look at something and think it’s a bit obscure, they might look at it and think it looks really interesting .
“My advice is to always try the obscure-looking products, because those will keep customers interested and often they will be the better sellers.”