United Biscuits commercial manager Nick Stuart explains why the category has thrived, even given the recent troubled economic times: "Snacks are seen as inexpensive treats by consumers who have been cutting back on out-of-home social occasions," he says. "Retailers should capitalise on this by stocking the best-sellers in both on-the-go and the sharing markets."
Pepsico's Jon Kyle gives credit to retailers for the great year the category has had. "Retailers are thinking more about the right range and getting smarter about which brands they sell," he says. "The category is actually quite an easy one to stock, but we weren't getting it right up until recently. Now there is better category advice out there and some excellent planograms that make the job very easy for retailers."
The snacks sector is proving appealing to manufacturers as well. Baker Warburtons was tempted into enter the market with its own offerings of Snackadoodle and ChippidyDooDaas, both of which were launched in March of this year. "The snacking category is one of the few that has remained resilient throughout the recent challenging economic climate," says chairman Jonathan Warburton. "Consumers have increasingly chosen to spend their money on inexpensive treats instead of larger purchases such as white goods or holidays."
Cranberry Enterprise also launched a range of snacks in individual packs earlier this year and believes that market demand will carry on even as the economy improves.
Says managing director Nick Charlton: "We attribute the growing performance to improving confidence in the economy and people having more disposable income. Naturally, an improving economy means more people on the move and therefore higher spend levels when they break for refreshment."
One area that attributes at least some of its success to the downturn is sharing packs. Stuart says that the sharing market has seen steady growth over the past year. "Sharing formats have been one of the key drivers of growth during the past year, both in everyday and adult ranges," he says. "Sharing formats currently make up 16% of bagged snacks sales in impulse outlets, and year-on-year value sales are up 16%.
"Sharing formats are definitely increasing in popularity as people are looking to buy them for nights in with family and friends."
Kyle believes that the sharing sub-category has the potential to grow further. "With staying in becoming the new going out, sharing is growing the category," he says. "There is a big opportunity in the market for an everyday sharing brand that can be enjoyed at mainstream social occasions such as an informal treat in the evening or weekend."
In an attempt to capitalise, Walkers has launched 99p sharing size packs of new Extra Crunchy crisps. Kyle has high hopes for this new range. "We are confident that it will be a top five sharing brand by the end of its first year," he adds.
"Crisps sell very well in my store, with larger bags doing really well. In general the standard size bags are less popular, especially with kids. During the school year, I notice that children will buy the 100g/125g packs rather than the small ones, and smuggle them into school. "We often have offers such as Doritos 125g bags that are pricemarked at 99p, or two packets for £1.50, or buy a Walkers Grab Bag 50g and Pepsi 600ml with a 99p pricemark for just £1, so customers are getting the crisps for only 1p. The new Walkers Extra Crunchy 100g range at 99p is also selling fast. "We don't sell as many packs of nuts now, and they often run out of date." Bob Gibson, Premier Store, Basingstoke, Hampshire
Kettle Chips marketing director Andrew Slamin says that although there has been more focus on the sharing sector than in previous years, retailers should continue to stock the brands they know and trust. "The sharing sector is becoming increasingly important in snacking as convenience retailers look to capitalise on night-in occasions," says Slamin. "There has been a large amount of npd and noise in this sector, however it remains important to focus on the best-selling brands."
Kyle warns retailers not to forget about the standard size sector of crisps, nuts and snacks when deciding on their range. "It's essential that retailers give their customers a choice when it comes to crisps," he says. "While the ratio between sharing and standard has evened out a little more, retailers can't start sacrificing too much space of their standard-size packs as there is still a massive demand for them. The current ratio is 4:1 in favour of standard, so a retailer's display should represent this."
As well as seeing growth in sharing size packs, the crisps, nuts and snacks market has also moved upmarket. According to Stuart, the premium snacks market has become more popular in the convenience channel. "Premium snacks are currently worth £85m and experienced 3% value sales growth in the impulse channel," says Stuart. "UB addressed this consumer trend by bringing back its Phileas Fogg range last year. We've also introduced a KP Jumbo Nuts range and a lamb & mint variant of Brannigans crisps to meet consumer desire for luxury nuts and crisps."
Slamin says that retailers should stock several premium brands to satisfy increased consumer interest in this sector. "Premium brands such as Kettle Chips can help convenience store owners capitalise on consumer trends towards better quality snacking options for those moments of indulgence," he says.
1Pringles 2Doritos 3Kettle Chips 4Sensations 5Tyrrells crisps 6Private label 7Walkers Crisps 8Monster Munch 9Quavers 10Pringles Xtreme Source: Nielsen MAT, w/e July 10, 2010
Tayto marketing director Elly Hunter agrees. "The category builds to a peak in December when people buy into the market for entertaining visitors during the Christmas period, especially within nuts," she says. "Snacks also see a slight increase during the end of the school holidays, going into the back-to-school period."
Kyle says that it's not just npd that will help grow the category in the future. "I think the growth will continue as there are some fantastic initiatives out there from all savoury snacks suppliers, not just Walkers," says Kyle. "Our key goal is to grow the entire category and ensure that it has long-term sustainability."
Manufacturers have been called on by Health Secretary Andrew Lansley to take a greater role in promoting healthier lifestyles in an effort to tackle obesity.
However, brands in the snacking category have already been doing their bit to promote healthy eating and have been cutting the amount of additives and fat in their products. Pepsico's Jon Kyle says that manufacturers have acted responsibly when it comes to snacks in the past and will continue to do so. "It's our number one aim as a responsible manufacturer to provide customers with a healthy option," he says, "and we have been doing this over the past few years." In March, Pepsico announced a commitment to healthy living by saying it would scrap Walkers Grab Bags by 2015 and plans to introduce a cap of 160 calories per pack.
United Biscuits also has a policy of "providing healthier options of standard products" and has reduced the amount of saturated fats and MSG in its products over the past two years.
Kettle Chips marketing director Andrew Slamin says that consumers are already leaning towards healthier snacking options, and that the market is responding to these demands. "There is a consumer trend towards better quality snacking options with no artificial ingredients or preservatives, so brands such as Kettle Chips are helping convenience store retailers to capitalise on this," he says.
Tangerine Confectionery has launched two 'posh popcorn' varieties of Butterkist in sharing size bags: toffee popcorn clusters with pecan & almonds and toffee popcorn with milk chocolate coating. rrp: £1.99 tel: 01253 761201
Spice it up
Pringles has added two new variants to its Xtreme range. Hot paprika & smokey bacon and spicy sour cream & onion are the latest flavours. Their launch will be supported by a print and digital marketing campaign that 'dares' customers to try the range.
tel: 0800 597 3388
Sizzling fajita is the latest addition to the Doritos range of share-size snacks, available in 225g bags. Also new are two ambient dips nacho cheese and red pepper & pepperoni, which are available in 300g jars. rrp: chips £1.29, dips £1.30
tel: 01189 306666
Plum has a new premium organic savoury snacking range. It includes: tomato & herb and pecorino cheese breadsticks; carrot and Parmesan savoury bakes; and gouda & Cheddar and tomato multi-grain rings. rrp: from 59p
tel: 0845 389 0061