There may not be many advantages to trading through a recession, but one upside of the credit crunch has been the increase in the number of people staying at home and entertaining. The trend towards having a night in with friends has led to a greater demand for crisps, nuts and snacks and c-store retailers are feeling the benefits of this.
In the 12 months to July 2009, sales of crisps, nuts and snacks in the convenience store channel were worth £541.6m and the category has seen a year-on-year growth of 1.3%, according to Nielsen. Crisps and snacks made up the majority of the market, worth £255m and £256m respectively, while nuts accounted for £29m.
Paul Lettice, trade communications manager at Procter & Gamble, which manufactures Pringles, says that the eating at home trend has made crisps, nuts and snacks an essential category for convenience retailers.
"Snacks is an increasingly key category for convenience retailers, and in particular large sharing options, as socialising at home becomes more frequent in the current economic climate," he says. "As consumers continue to trade nights out for staying in, 'treating' guests with food and drink is even more of a focus."
Glennans brand manager Richard Thompson says that while consumers are watching what they are spending, the snacks market hasn't felt the pinch, mainly due to consumers treating themselves more often to low-cost, feel-good items. "Premium snacking is surviving because people are cutting back on everyday items and not necessarily indulgent snacks," he says. "Also, people are entertaining indoors more and going out less."
Glennans produces pan-fried vegetable crisps in 100g packs, which the company says is the perfect size for sharing with family and friends.
United Biscuits customer marketing director Mark Sugden believes that one way retailers can capitalise on the growth in the crisps, nuts and snacks market is to stock more sharing size lines. He points out: "According to Nielsen, sharing is worth £56m in the convenience sector and the ratio of sales of sharing bags to individual bags has increased from 1:6 to 1:5 in the past 12 months."
He points out that sharing packs are all-year winners rather than just being connected with a couple of traditional social gatherings such as Christmas and summer barbecues.
He says: "Retailers should make share-size packs available to customers all year round. When it's sunny, there's an opportunity for drinks and snacks in the garden with friends; and in the winter months, people have friends over to watch a DVD or just for fun. All retailers have to do is stock a few more of these lines and they'll see a sales boost."
Kirk Tanner, vice-president of impulse sales at Walkers, agrees. "Sharing take-home bags are driving a good proportion of the category growth and Walkers is certainly helping to drive that.
"We are looking at the category in more detail and studying what areas in particular customers are interested in premium, everyday type snack or a snack with more punch like Doritos because we do see the sharing trend continuing."
Walkers has capitalised on the move towards sharing by introducing pricemarked sharing packs specifically for the convenience store channel. Doritos, Quavers and Sensations are all available to convenience stores in 99p pricemarked packs.
"With the knowledge that sharing is achieving most of the growth we have introduced a new range of pricemarked sharing SKUs," says Tanner. "We launched this range of products to complement our sharing portfolio, and we did it with the consumer as well as the retailer in mind."
Walkers' new product development has strongly featured sharing packs over the past months. The Sensations range was repackaged to further emphasise its luxury qualities and Walkers entered the hand-cooked snacks market in March with the release of Red Sky, a 100% natural crisp which comes in 40g and 150g sharing bags. The brand is designed to appeal to older, more affluent customers.
United Biscuits is also aiming to stay in the spotlight with the relaunch of the Phileas Fogg snacks range, available in both sharing and snack size packs. The snacks range feature some old favourites and some new flavours, and re-establishes the brand after more than 10 years absence.
Not to be outdone, Kettle Chips also released a new flavour in a pack size designed for sharing: roasted tomato & basil.
But it's not just about what to stock; where to merchandise the category is important, too.
Walkers' Tanner believes siting the category in the best location is vital. "The great thing about the crisps, nuts and snacks category is its ability to tie in with other products," he says. "It's definitely not just a standalone transaction. Tying crisps and snacks in with other affinity categories such as beer, wine, spirits and soft drinks not only drives a new transaction, it drives a larger transaction."
United Biscuits' Sugden agrees that stocking packs alongside products that consumers associate with the category can be a winning strategy. "Stocking the top 10 brands close to the alcohol and soft drinks section is a great place to start," he says, "although I would be wary of having too many different brands. It can confuse the customer. My advice is to stock the most popular brands and some that you know sell well in your store rather than squeezing as many brands as possible."