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Sweet And Salty Snacks Market Assessment 2006
Key Note Publications Ltd, Sep 2006
Executive Summary
This report defines the sweet snacks sector in this report as comprising filled chocolate countlines, chocolate biscuit bars, cereal bars and cake bars/mini rolls. The salty snacks sector encompasses potato crisps, other savoury snacks, and snack nuts. The `other savoury snacks' subsector focuses largely on extruded or pelleted products, but also includes tortilla chips, baked snack biscuits, and rice- and corn-based snacks. In terms of retail sales value in the year to May 2006, the salty snacks sector accounted for 54.4% of the total sweet and salty snacks market, and sweet snacks represented the remaining 45.6%.
The three largest subsectors in the market in the year to May 2006 were chocolate countlines (with a 27.4% market share by retail sales value), potato crisps (24.8%) and `other savoury snacks' (23.9%). Chocolate biscuit bars represented 9.3%, and cereal bars and snack nuts accounted for 6.8% and 5.7% shares, respectively. The cake bars and mini rolls subsector was by far the smallest, at 2.1%. However, potato crisps and chocolate countlines are currently static subsectors, while sales of `other savoury snacks' are in slight decline. Only the snack nuts and cereal bars subsectors show strong and continuous growth, with chocolate biscuit bars and cake bars/mini rolls in significant decline.
The Government's and others' campaigns to reduce levels of fat, salt and sugar in consumers' diets — in response to the substantial and growing numbers of overweight and obese persons in the population — have had an adverse effect on sales of sweet and salty snacks. Between the year ending September 2004 and the year to May 2005, retail sales of salty snacks declined by 3.3% in value terms, although this fall was followed by a very slight rise in the year ending May 2006. The value of the sweet snacks sector grew by 4% between the year ending September 2004 and the year to May 2005, but fell by 2% in the year ending May 2006.
Within the salty snacks sector, manufacturers have acted to combat lost sales by increasing their development and production of potato crisps and other savoury snacks with lower fat and salt content. This tactic had previously achieved little success, but the dominant producers of such snacks — PepsiCo's Walkers Snack Foods and the United Biscuits companies KP Foods, McVitie's and Jacob's Bakery — are now reducing the fat content of their major brands instead of just producing specific low-fat brands. The newer rice- and corn-based snacks, principally from Quaker, are all low-fat products. The success of snack nuts in recent years is attributable to consumers' perception of them as `healthy'. The major supplier of branded products in this subsector is KP Foods. However, snack nuts is the only subsector within the sweet and salty snacks market to be largely held by retailers' own-label products.
In addition, manufacturers are segmenting the salty snacks sector to a greater extent in order to attract more adults. Currently, a large proportion of salty snacks are eaten by children and teenagers. However, premium crisps and snacks, with more `sophisticated' flavours, are now common. This trend is expected to address the issue of the ageing population profile, as older consumers tend to have more refined tastes, to which such products should appeal. The pioneer of this segmentation has been Kettle Foods.
There has been less visible activity from major manufacturers in producing healthier sweet snacks, although smaller chocolate countline bars are now on sale, and Masterfoods has experimented with lighter fillings for its Mars Bars. In addition, the Government is campaigning for clearer information on packaging regarding the fat and sugar content of products. The sweet snacks sector is dominated by Masterfoods, Nestlé Rowntree and Cadbury Trebor Bassett, with Nestlé Rowntree being the market leader in chocolate biscuit bars.
Kellogg's, a pioneer and leader in cereal bars, regained some lost share of this subsector of the market in 2005/2006. Cereal bars have benefited from having a healthy image, although this perception of them as `healthy' is not necessarily accurate. Growth has attracted many major producers to the subsector, resulting in its fragmentation. Most have moved towards offering healthier low-fat bars, with some success. In contrast to this, the cake bars and mini rolls subsector is in decline, with the market leader, Manor Bakeries, losing substantial sales and share. The only other main player, McVitie's, has retained its share of the subsector but experienced a decline in sales in 2005/2006, despite increases in sales values prior to this. The cake bars and mini rolls subsector has shown significant growth in sales of retailers' own-label products.
The sweet and salty snacks market is projected to show a slight decline in value terms each year over the next 5 years (to 2010/2011), with sales of sweet snacks forecast to fall to a slightly greater extent than those of salty snacks.
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