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Snack Foods Market Report Plus 2010
Key Note Publications Ltd, Jan 2010
This Market Report Plus examines the UK snack foods market, which comprises potato crisps, other savory snacks (including tortilla chips, baked snack biscuits and rice and corn-based snacks) and snack nuts. It excludes sweet snack items, such as chocolate, which are covered in Confectionery Market Report Plus and the Sweet & Salty Snacks Market Assessment. The authors estimate that, in terms of retail sales, the total value of the market increased by 12% between 2005 and 2009 to reach £2.39bn. An especially strong growth of 8.4% was seen between 2008 and 2009 as manufacturers passed on steep rises in commodity costs for items such as potatoes, sunflower oil and nuts.
Manufacturers of snack foods continued to respond to health issues in 2008/2009, reducing salt and fat content in their foods through the introduction of ‘light’ and low-fat variants. Emphasis has been placed on the use of more ‘natural’ ingredients, as well as on baked, rather than fried, goods. Seabrook Crisps has admitted that when celebrity chef Jamie Oliver advised people against eating crisps because of their fat and salt content, it decimated its sales ‘almost overnight’. However, despite most snack foods being relatively low in nutritional value, consumption of them on a regular basis is very high. A Target Group Index (TGI) survey carried out by BMRB International Ltd found that 84.1% of respondents had consumed potato crisps, tortilla or corn snacks in the 12 months ending March 2009, indicating that consumers look upon such foods as indulgent treats.
As well as being indulgent, savory snack foods such as crisps are also an affordable treat. Even at the premium end of the market, products are cheap in comparison to other food treats, such as premium chocolate. In fact, the current recession has helped demand for upmarket products, as there has been an increase in consumers staying in rather than going out and replacing luxuries such as eating out in restaurants with eating snack foods at home. This has also led to retailers giving more shelf space to snack foods, particularly large sharing packs.
The hike in commodity costs in 2008/2009 led to hefty price rises in the industry, and there have been corporate casualties as a result. For example, Natural Crisps Ltd was close to administration when it was bought by Tayto Crisps of Northern Ireland in a ‘distress deal’ completed in a week over Christmas 2008. The deal was Tayto’s fourth acquisition in 3 years, following its purchases of Golden Wonder in 2006, Real Crisps in 2007 and Red Mill Snack Foods in 2008. Germany’s Intersnack purchased a 15% stake in Largo Foods (the owner of the Tayto brand in the Republic of Ireland), and is thought to be considering making more acquisitions in the UK market. Further consolidation in an industry currently dominated by Walkers Snack Foods seems likely in the future, especially as the recession continues and companies struggle to survive.
The authors forecast that the retail sales value of the UK snacks market will increase by 3.6% to £2.48bn in 2010, and will grow by an overall 5.3% between 2010 and 2014 to finish at £2.61bn.
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