| KN15323 |
| KEY NOTE SNACK FOODS PLUS : JANUARY 2003 |
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This report covers: bagged snacks,crisps, other savory
sanacks, nuts, baked snacks, plain & savoury biscuits, eating habits,
sociable sharing, product innovation, spicyflavours, health issues, fat
content, calorie intake, additives, salt, potato crisps, potato sticks
etc.
Companies covered include: The Jacob's Bakery, Kettle Foods,
Proctor & Gamble, Red Mill Snack Foods, Seabrook Factory, United Biscuits,
Walkers Snack Foods,
| Executive Summary 1 |
| 1. Market Definition 7 |
| REPORT COVERAGE 7 |
| MARKET SECTORS 7 |
| Bagged Snacks 7 |
| Crisps 7 |
| Other Savoury Snacks 7 |
| Nuts 8 |
| Baked Snacks 8 |
| Plain and Savoury Biscuits 8 |
| Savoury Snack Biscuits 8 |
| MARKET TRENDS 8 |
| Eating Habits 8 |
| Sociable Sharing 9 |
| Product Innovation 9 |
| Spicy Flavours 9 |
| Health Issues 9 |
| Fat Content 9 |
| Calorie Intake 10 |
| Additives 10 |
| Salt 10 |
| MARKET POSITION 10 |
| Household Expenditure on Food and Non-Alcoholic Drink 10 |
| Table 1: Household Expenditure on Food and Non-Alcoholic Drink, and Share Taken by Snack Foods (£m and percent), 1997-2001 11 |
| A European Perspective 11 |
| 2. Market Size 12 |
| THE TOTAL MARKET 12 |
| Table 2: The UK Market for Snack Foods by Value at Current Prices (£m at rsp), 1998-2002 12 |
| BY MARKET SECTOR 12 |
| Table 3: The UK Market for Snack Foods by Sector by Value at Current Prices (£m at rsp), 1998-2002 13 |
| Bagged Snacks 13 |
| Crisps 13 |
| Other Savoury Snacks 14 |
| Nuts 14 |
| Baked Snacks 14 |
| Plain and Savoury Biscuits 14 |
| Savoury Snack Biscuits 14 |
| 3. Industry Background 15 |
| HISTORICAL BACKGROUND 15 |
| NUMBER OF COMPANIES 15 |
| By Turnover 15 |
| Table 4: Number of UK VAT-Based Enterprises Involved in the Processing and Preserving of Potatoes by Turnover (£000 and number), 2002 16 |
| By Number of Employees 16 |
| Table 5: Number of UK VAT-Based Local Units Involved in the Processing and Preserving of Potatoes by Number of Employees, 2002 17 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 17 |
| RETAIL DISTRIBUTION 18 |
| HOW ROBUST IS THE MARKET? 18 |
| LEGISLATION 19 |
| TRADE ASSOCIATIONS 19 |
| European Snacks Association 19 |
| Snack Food Association 19 |
| Snack, Nut & Crisp Manufacturers' Association 20 |
| ADVISORY AND INFORMATION SERVICES 20 |
| European Food Safety Authority 20 |
| The Food Commission 20 |
| Food Standards Agency 20 |
| 4. Competitor Analysis 21 |
| THE MARKETPLACE 21 |
| Table 6: Selected Leading UK-Registered Snack-Food Companies by Turnover and Pre-Tax Profit (£m), 2000/2001 21 |
| MARKET LEADERS 22 |
| The Jacob's Bakery Ltd 22 |
| Financial Results 22 |
| Kettle Foods Ltd 22 |
| Financial Results 22 |
| Procter & Gamble Ltd 22 |
| Financial Results 23 |
| Red Mill Snack Foods Ltd 23 |
| Financial Results 23 |
| Seabrook Potato Crisps Ltd 24 |
| Financial Results 24 |
| The Snack Factory Ltd 24 |
| Financial Results 24 |
| United Biscuits (UK) Ltd 24 |
| Financial Results 25 |
| Walkers Snack Foods Ltd 25 |
| Financial Results 25 |
| OUTSIDE SUPPLIERS 26 |
| Raw Materials 26 |
| Flavourings 26 |
| Processing Equipment 26 |
| Packaging 27 |
| ADVERTISING AND PROMOTION 27 |
| Main Media Expenditure 27 |
| Table 7: Main Media Expenditure on Potato Crisps and Snacks (£000), Years to June 2001 and 2002 28 |
| Recent Promotions 30 |
| Goalden Balls 30 |
| KP 30 |
| Pringles 30 |
| Thai Bites 30 |
| Twiglets 30 |
| Walkers 30 |
| 5. Brand Strategy 32 |
| LEADING BRAND NAMES 32 |
| Own Brands 32 |
| BRAND VALUES 33 |
| Bagged Snacks 33 |
| Table 8: The Leading Brands of Bagged Snacks by Sales Value (£000), 2000 and 2001 33 |
| Baked Snacks 34 |
| BRAND PENETRATION 34 |
| Table 9: Penetration of Selected Brands of Snack Food by Sex ( percent of adults), 2002 34 |
| By Sex 35 |
| By Age 35 |
| Table 10: Penetration of Selected Brands of Snack Food by Age ( percent of adults), 2002 36 |
| By Social Grade 36 |
| Table 11: Penetration of Selected Brands of Snack Food by Social Grade ( percent of adults), 2002 37 |
| By Region 37 |
| Table 12: Penetration of Selected Brands of Snack Food by Region — the South of England and Wales ( percent of adults), 2002 38 |
| Table 13: Penetration of Selected Brands of Snack Food by Region — the Midlands, the North of England and Scotland ( percent of adults), 2002 39 |
| BRAND NEWS 39 |
| 6. Strengths, Weaknesses, Opportunities and Threats 40 |
| STRENGTHS 40 |
| WEAKNESSES 40 |
| OPPORTUNITIES 41 |
| THREATS 41 |
| 7. Buying Behaviour 42 |
| CONSUMER PENETRATION 42 |
| Potato Crisps 42 |
| Table 14: Penetration of Potato Crisps ( percent of adults/users), 2002 42 |
| Potato Sticks and Other Crisp Savoury Snacks 43 |
| Table 15: Penetration of Potato Sticks and Other Crisp Savoury Snacks ( percent of adults/users), 2002 44 |
| Packeted and Tinned Nuts 44 |
| Table 16: Penetration of Packeted and Tinned Nuts ( percent of adults/users), 2002 45 |
| 8. Current Issues 46 |
| CLOSURES, MERGERS AND ACQUISITIONS 46 |
| Golden Wonder Ltd 46 |
| John Lusty Group PLC 46 |
| Quaker Trading Ltd 46 |
| Snackhouse PLC 47 |
| BOARD CHANGES 47 |
| Golden Wonder 47 |
| Kettle Foods 47 |
| Ryvita 47 |
| United Biscuits 47 |
| NEW PRODUCTS 48 |
| KP 48 |
| Ryvita 48 |
| Snacks Unlimited 48 |
| Walkers Snack Foods 48 |
| 9. The Global Market 49 |
| INTRODUCTION 49 |
| MARKET PROFILE 49 |
| OVERSEAS MARKET LEADERS 49 |
| C&C Group PLC 49 |
| Groupe Danone 50 |
| The Intersnack Group 50 |
| Keebler Foods Company 50 |
| Kettle Foods 50 |
| Kraft Foods Incorporated 51 |
| Lance Incorporated 51 |
| PepsiCo Incorporated 51 |
| 10. Forecasts 52 |
| INTRODUCTION 52 |
| Population Trends 52 |
| Table 17: The Projected Size of the UK Population by Age Group (000 persons), 2002, 2007 and 2012 52 |
| Health Advice 53 |
| FORECASTS 2003 TO 2007 53 |
| Table 18: The Forecast UK Market for Snack Foods by Sector by Value at Current Prices (£m at rsp), 2003-2007 54 |
| Bagged Snacks 54 |
| Baked Snacks 54 |
| MARKET GROWTH 55 |
| Figure 1: The UK Market for Snack Foods by Value at Current Prices (£m at rsp), 1998-2007 55 |
| 11. Company Profiles 56 |
| The Jacob's Bakery Ltd 57 |
| Kettle Foods Ltd 59 |
| Red Mill Snack Foods Ltd 61 |
| Seabrook Potato Crisps ltd 63 |
| The Snack Factory Ltd 65 |
| United Biscuits (uk) Ltd 67 |
| Walkers Snack Foods Ltd 69 |
| 12. Company Financials 71 |
| 13. Further Sources 73 |
| Associations 73 |
| Publications 73 |
| General Sources 74 |
| Bonnier Information Sources 74 |
| Government Publications 75 |
For the purposes of this report, snack foods are defined as bagged snacks (crisps, other savoury snacks and nuts) and baked snacks (plain and savoury biscuits, and savoury snack biscuits). Their combined retail value reached an estimated £2.29bn in 2002, having increased by just 2 percent from the previous year. The ongoing trend towards snacking in place of the traditional three meals a day has benefited the market, but it has also led to the development of snack products by other food sectors, such as fruit, cheese and cereals. Some of these latter products are considerably healthier than many of their competitors, provoking manufacturers to provide more varied and more nutritional ranges of savoury snacks. Nevertheless, crisps continue to take the largest share of sales and were eaten by 89.4 percent of adults (aged 15 or over) in 2002, according to BMRB International. Penetration is higher among young people than among those who are older, but the difference is likely to become less marked with the ageing of the post-war generation, which grew up with crisps and similar products.
Snacks may be eaten in addition to traditional meals or as a substitute for them. People without the time, inclination or skill to prepare meals from scratch want convenient food that can be eaten `on the go' or at the desk. However, those in the industry appear to be in agreement that the main growth area is social snacking, where groups of people share large bags or tubes. Adults are more likely to choose premium products for such occasions, and it is noticeable that flavours are becoming spicier.
Supply is dominated by a handful of global companies. The UK market leaders are Walkers Snack Foods (part of PepsiCo Incorporated) and KP (part of United Biscuits), although the second-largest brand is Pringles, which represents Procter & Gamble's only foray into the snack-foods market. The most important corporate development in 2002 was the change in ownership of Golden Wonder, one of the best-known names in the industry. Walkers Snack Foods has acquired the Wotsits brand and Golden Wonder's direct-sales operation, while The Snack Factory has taken on Golden Wonder's other brands, plus its head office, factories and equipment. Some manufacturers, wholesalers and retailers expressed concern about the power the deal would give the two acquiring companies, and the Office of Fair Trading (OFT) was asked to investigate. In the event, however, the OFT decided that it was unnecessary to refer the matter to the Competition Commission, and the deal was duly completed in July 2002. Other recent corporate developments have included the appointment of receivers for Snackhouse (the holding company for Benson's Crisps) and John Lusty Group (importers and distributors).
Hundreds of new products are launched in any year, but the majority of sales are accounted for by a few brands. Considerable advertising expenditure is required to maintain the profiles of these top brands - let alone to launch new ones - and it could be argued that there are too many products in the market, serving only to confuse retailers and consumers alike. If a winning formula is introduced, other manufacturers rush to copy it and a price war ensues, doing the value of the market no favours. However, Key Note forecasts that sales of snack foods will continue to grow slowly but surely over the period to 2007.
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
