MP15425

MAPS : Sweet and Salty Snacks : February 2005

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TABLE OF CONTENTS

Executive Summary

1. Introduction

DEFINITIONS

Sweet Snacks

Salty Snacks

2. Strategic Overview

ISSUES DRIVING OR AFFECTING THE MARKET

A Greying Population

Table 1: The UK Population by Age Group (% and million), 1981, 1991, 2001, 2011 and 2021

Changing Lifestyles and Increased Snacking Occasions

Table 2: The Working Population by Sex (million), 1988 and 2003

Children's Pocket Money and Disposable Income

Table 3: Profile of Confectionery Buyers and Eaters by Age Group (%), 2003

Brand Extensions and New Product Developments

Health Issues

MARKET DYNAMICS AND SEGMENTATION

Table 4: The Total UK Market for Sweet and Salty Snacks by Subsector by Value at Current Prices (£m at rsp and %), 1999/2000-2003/2004†

Figure 1: The Total UK Market for Sweet and Salty Snacks by Value at Current Prices (£m at rsp), 1999/2000-2003/2004†

DISTRIBUTION

COMPETITIVE STRUCTURE

ADVERTISING AND PROMOTION

THE CONSUMER

MARKET FORECASTS

Table 5: The Forecast UK Market for Sweet and Salty Snacks by Sector by Value at Current Prices (£m at rsp and %), 2004/2005-2008/2009†

3. Sweet Snacks

MARKET SIZE

Table 6: The UK Sweet Snacks Sector by Product Type by Value at Current Prices (£m at rsp and %), 1999/2000-2003/2004†

Figure 2: The UK Sweet Snacks Sector by Value at Current Prices (£m at rsp), 1999/2000-2003/2004†

Chocolate Countlines

Table 7: The UK Chocolate Countlines Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 8: The UK Chocolate Countlines Subsector — Major Brands (%), 2002/2003 and 2003/2004†

Chocolate Biscuit Bars

Table 9: The UK Chocolate Biscuit Bars Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 10: The UK Chocolate Biscuit Bars Subsector — Major Brands (%), 2002/2003 and 2003/2004†

Cereal Bars

Table 11: The UK Cereal Bars Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 12: The UK Cereal Bars Subsector — Major Brands (%), 2002/2003 and 2003/2004†

Cake Bars

Table 13: The UK Cake Bars Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 14: The UK Cake Bars Subsector — Major Brands (%), 2002/2003 and 2003/2004†

CONSUMER TRENDS

ADVERTISING

DISTRIBUTION

4. Salty Snacks

MARKET SIZE

Table 15: The UK Salty Snacks Sector by Product Type by Value at Current Prices (£m at rsp and %), 1999/2000-2003/2004†

Figure 3: The UK Salty Snacks Sector by Value at Current Prices (£m at rsp), 1999/2000-2003/2004†

Potato Crisps

Table 16: The UK Potato Crisps Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 17: The UK Potato Crisps Subsector — Major Brands (%), 2002/2003 and 2003/2004†

Other Savoury Snacks

Table 18: The UK `Other Savoury Snacks' Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

Table 19: The UK `Other Savoury Snacks' Subsector — Major Brands (%), 2002/2003 and 2003/2004†

Snack Nuts

Table 20: The UK Snack Nuts Subsector — Sales by Manufacturer by Value at Current Prices (£m at rsp and %), 2002/2003 and 2003/2004†

CONSUMER TRENDS

ADVERTISING

DISTRIBUTION

5. Advertising and Promotion

OVERVIEW

Table 21: Main Media Advertising Expenditure on Sweet and Salty Snacks (£m), Years Ending December 2001-2003 and September 2003 and 2004

SWEET SNACKS

Chocolate Countlines

Table 22: Main Media Advertising Expenditure on Chocolate Countlines (£000), Years Ending December 2001-2003 and September 2003 and 2004

Chocolate Biscuit Bars

Table 23: Main Media Advertising Expenditure on Chocolate Biscuit Bars (£000), Years Ending December 2001-2003 and September 2003 and 2004

Cereal Bars and Cake Bars

Table 24: Main Media Advertising Expenditure on Cereal Bars and Cake Bars (£000), Years Ending December 2001-2003 and September 2003 and 2004

SALTY SNACKS

Table 25: Main Media Advertising Expenditure on Salty Snacks (£000), Years Ending December 2001-2003 and September 2003 and 2004

6. Distribution

OVERVIEW

SWEET SNACKS

Table 26: UK Sales of Sweet Snacks by Outlet Type by Value (%), 2002 and 2003

SALTY SNACKS

Table 27: UK Sales of Salty Snacks by Outlet Type by Value (%), 2002/2003 and 2003/2004†

7. An International Perspective

SWEET SNACKS

Table 28: Total Chocolate Confectionery and Biscuits/Baked Goods Production and Consumption by Volume (000 tonnes), 2003

SALTY SNACKS

Germany

Austria

France

Belgium and the Netherlands

Italy

Spain and Portugal

8. PEST Analysis

POLITICAL FACTORS

ECONOMIC AND DEMOGRAPHIC FACTORS

SOCIAL FACTORS

TECHNOLOGICAL FACTORS

9. Consumer Dynamics

PRODUCT PENETRATION AND LEVELS OF USAGE

Table 29: Definitions of Heavy, Medium and Light Use of Sweet and Salty Snacks by Product Type, 2003/2004

Sweet Snacks

Other Chocolate Items

Table 30: Penetration of `Other Chocolate Items'† by Sex, Age and Social Grade (% of adults), 2003/2004

Cereal Bars

Table 31: Penetration of Cereal Bars by Sex, Age and Social Grade (% of adults), 2003/2004

Salty Snacks

Potato Crisps and Potato Snacks

Table 32: Penetration of Potato Crisps and Potato Snacks by Sex, Age and Social Grade (% of adults), 2003/2004

Other Savoury Snacks

Table 33: Penetration of Other Savoury Snacks by Sex, Age and Social Grade (% of adults), 2003/2004

Packeted and Tinned Nuts

Table 34: Penetration of Packeted and Tinned Nuts by Sex, Age and Social Grade (% of adults), 2003/2004

PURCHASING HABITS AND VIEWS ON HEALTH ISSUES

Table 35: Agreement with Statements Regarding Sweet and Snacks Purchases (% of respondents), 2004

Regular Purchasing of Crisps and Other Savoury Snacks

Table 36: Profile and Penetration for Purchasing of Crisps or Other Savoury Snacks at Least Once a Month (% of respondents), 2004

Regular Purchasing of Filled Chocolate Biscuits Bars and Chocolate Biscuit Bars

Table 37: Profile and Penetration for Purchasing Filled Chocolate Bars and Chocolate Biscuit Bars at Least Once a Month (% of respondents), 2004

Regular Purchasing of Cereal Bars and Small Cake Bars

Table 38: Profile and Penetration for Purchasing Cereal Bars and Small Cake Bars at Least Once a Month (% of respondents), 2004

Purchasing Sweet or Salty Snacks for Working Lunches/Children's Lunchboxes, and Increasingly Purchasing `Adult' Products

Table 39: Profile and Penetration for Purchasing Sweet or Salty Snacks for Working Lunches or Children's Lunchboxes, and for Increasingly Purchasing `Adult' Products or Flavours of Crisps and Savoury Snacks (% of respondents), 2004

Impulse Purchasing of Sweet and Salty Snacks

Table 40: Profile and Penetration for Buying Crisps or Savoury Snacks, and Filled Chocolate Bars, Chocolate Biscuit Bars, Cereal Bars or Cake Bars, on Impulse Rather Than as a Planned Purchase (% of respondents), 2004

Purchasing of Own-Label Sweet and Salty Snacks

Table 41: Profile and Penetration for Purchasing Own-Label Crisps or Savoury Snacks, and Own-Label Filled Chocolate Bars, Chocolate Biscuit Bars, Cereal Bars or Cake Bars, as well as Brands (% of respondents), 2004

Purchasing Fewer Sweet and Salty Snacks for Health Reasons Due to Concerns About Salt, Sugar and Fat Contents

Table 42: Profile and Penetration for Purchasing Fewer Crisps or Savoury Snacks, and Fewer Chocolate Bars or Biscuits, Cereal or Cake Bars, for Health Reasons Due to Concerns About Products' Salt, Sugar and Fat Content (% of respondents), 2004

Opinion That Manufacturers Should Do More to Cut Down on Salt, Fat and Sugar Levels in Snacks

Table 43: Profile and Penetration for Agreement That Manufacturers Should Do More to Cut Down on Salt, Fat and Sugar Levels in Snacks (% of respondents), 2004

10. Consumer Dynamics

SWEET SNACKS

Cadbury Trebor Bassett

Profitability

Table 44: Financial Results for Cadbury Schweppes PLC (£000 and %), Years Ending 30th December 2001, 29th December 2002 and 28th December 2003

W Jordan (Cereals) Ltd

Profitability

Table 45: Financial Results for W Jordan (Cereals) Ltd (£000 and %), Years Ending 28th February 2001-2003

Kellogg Marketing and Sales Company (UK) Ltd

Profitability

Table 46: Financial Results for Kellogg Marketing and Sales Company (UK) Ltd (£000 and %), Years Ending 31st December 2001, 28th December 2002 and 27th December 2003

Masterfoods Ltd

Profitability

Table 47: Financial Results for Mars UK Ltd (£000 and %), Years Ending 29th December 2001, 28th December 2002 and 27th December 2003

Nestlé Rowntree

Profitability

Table 48: Financial Results for Nestlé Holdings (UK) PLC (£000 and %), Years Ending 31st December 2001-2003

Northern Foods PLC — Fox's Biscuits

Profitability

Table 49: Financial Results for Northern Foods PLC (£000 and %), Years Ending 31st March 2002 and 2003 and 53 Weeks to 3rd April 2004

Premier Foods — Burtons Foods and Weetabix

Profitability

Table 50: Financial Results for Premier Foods (Holdings) Ltd (£000 and %), Years Ending 31st December 2001-2003

RHM — Manor Bakeries

Profitability

Table 51: Financial Results for RHM Group One Ltd (£000 and %), 34 Weeks to 28th April 2001, Year Ending 27th April 2002 and 53 Weeks to 3rd May 2003

Table 52: Financial Results for Manor Bakeries Ltd (£000 and %), Years Ending 28th April 2001 and 27th April 2002 and 53 Weeks to 3rd May 2003

Thomas Tunnock Ltd

Profitability

Table 53: Financial Results for Thomas Tunnock Ltd (£000 and %), Year Ending 28th February 2002, 51 Weeks to 22nd February 2003 and 53 Weeks to 28th February 2004

United Biscuits — McVitie's

SALTY SNACKS

Golden Wonder Ltd — The Snack Factory

Profitability

Table 54: Financial Results for Golden Wonder Ltd (£000 and %), Year Ending 29th June 2002, 26 Weeks to 28th December 2002 and Year Ending 27th December 2003

Kettle Foods Ltd

Profitability

Table 55: Financial Results for Kettle Foods Ltd (£000 and %), Years Ending 30th September 2001-2003

PepsiCo — Walkers Snack Foods and Quaker Oats

Profitability

Table 56: Financial Results for Walkers Snack Foods Ltd (£000 and %), 53 Weeks to 31st December 2000 and Years Ending 29th December 2001 and 28th December 2002

Table 57: Financial Results for Quaker Oats Ltd (£000 and %), Years Ending 31st December 2001-2003

Procter & Gamble UK

Profitability

Table 58: Financial Results for Procter & Gamble Ltd (£000 and %), Years Ending 30th June 2001-2003

United Biscuits — KP Foods, McVitie's and Jacob's

Profitability

Other, Smaller Manufacturers

The Real Crisp Co

Red Mill Snack Foods Ltd

Others

11. The Future

FORECASTS

Table 59: The Forecast UK Market for Sweet and Salty Snacks by Subsector by Value at Current Prices (£m at rsp and %), 2004/2005-2008/2009†

Figure 4: The Forecast UK Market for Sweet and Salty Snacks by Value at Current Prices (£m at rsp), 2004/2005-2008/2009†

12. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bonnier Information Sources

EXECUTIVE SUMMARY

The sweet and salty snacks market is defined in this report as encompassing chocolate countlines, chocolate biscuit bars, cereal bars and cake bars, potato crisps, other savoury snacks including snack biscuits and rice- or corn-based products, and snack nuts. 54.5% of this market by value is represented by salty snacks, and 45.5% by sweet products.

There is considerable new product development (NPD) activity in all sectors, owing to several factors. First, a significant proportion of snacks sales are made to children and teenagers, who constantly demand new products. Second, the nature of the snack foods market is one of frequent new offerings in order to achieve continuing sales. In support of this, manufacturers are also driving market growth through increased activity in products targeted at adults — notably via `hand-cooked' chips and spicy flavours within salty snacks, and premium chocolate countline variants and countline brand extensions into chocolate biscuit bars and cake bars.

Of significant importance, activity is also being stepped up in the production of products with lower salt, fat and sugar contents. Although sales of such snacks have been poor in the past relative to traditional recipes, manufacturers are under some pressure now to assist in efforts to address increasing heart problems and obesity levels in the population — attributed in large part to poor diet and unhealthy snacking.

Sales of sweet snacks fell by 1.9% in value terms in 2003/2004 (year to September). Despite large NPD programmes and significant advertising expenditure, sales of salty snacks fell by 1.6% in value terms in 2003/2004, compared with the previous equivalent 12 months. Gains and falls resulted in the overall market remaining almost static in value between 1999/2000 and 2003/2004. The most substantial recent falls in sales have been in chocolate biscuit bars and cake bars, with the relatively smaller subsectors of snack nuts and cereal bars being the only areas experiencing continued growth.

Although the growth aspects of the sweet and salty snacks market are a move towards products aimed at adults at a time when there is an ageing population profile, coupled with increased snacking levels as a result of busier lifestyles, it is likely that increased awareness of the health factor will have an overall adverse effect on sales of most sweet and salty snacks. However, this could continue to benefit sales of nuts and cereal bars, which are perceived to be more healthy. Many major manufacturers are now concentrating on entering the cereal bar subsector.

The three major chocolate manufacturers, Masterfoods, Cadbury Trebor Bassett and Nestlé Rowntree, dominate the chocolate countlines subsector, although only Nestlé has a comparably significant stake in chocolate biscuit bars. Kellogg's continues to be by far the largest company in cereal bars, although its share is being increasingly eroded by new entrants such as United Biscuits' McVitie's and Premier's Weetabix. RHM's Manor Bakeries leads in cake bars, although United Biscuits' McVitie's is gaining share.

PepsiCo's Walkers dominates the potato crisps and savoury snacks subsectors, with its major competitor, United Biscuits, being the only large company (through KP Foods and McVitie's) with a significant position in almost all of the snacks sectors in this report. KP is the brand leader in snack nuts.

Health aspects are anticipated to continue to weigh on the future of sweet and salty snacks, although the market is predicted to decline at slower rates in future than currently noted, owing to increased success in introducing ranges of healthier snacks.

Text © 2005 Key Note

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Last updated by Amanda Porteous 2005