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Crisps and Snacks - UK - May 2005

INTRODUCTION AND ABBREVIATIONS
Definition
Consumer research
ACORN
Advertising data
 ABBREVIATIONS
PREMIER INSIGHT
Greater market segmentation is required
New approach to healthy snacking, taking crisps out of the ghetto
From food minus to food plus
Crisps need to be repositioned as medium Glycaemic Load
New product formats
More seasonality in products needed
Manufacturers need to keep a beady eye on the trans-fats issue
EXECUTIVE SUMMARY
Obesity issue having a stinging impact
Niche sectors are seeing growth
Market segmentation
Walkers Snack Foods Ltd dominates
Advertising critical to target children
Multiple grocers’ stranglehold tightening
Penetration levels remain high
A market at a crossroads?
MARKET DRIVERS
Shrinking number of 15-24-year-olds providing a challenging market
Figure 1: UK population breakdown, by age, 2000 and 2005
Slimming and dieting issue
Figure 2: Adults who have felt overweight in the last year, by gender, 2004
Figure 3: Adults who are trying to slim, by gender, 2000-04
Potential consumption occasions are declining
Figure 4: Methods consumers would use to lose weight, January 2005
Crisps’ declining popularity amongst adults as a snack
Figure 5: Foods eaten between meals in the preceding month, 2000-04
Premiumisation is a factor too
Figure 6: Agreement with selected lifestyle statements, 2000-04
A sharp rise in childhood obesity
Figure 7: Agreement with statements about eating, 11-14s, 2001-04
Government White Paper on health – November 2004
Increase in disposable income for kids
Figure 8: Average weekly income of children aged 7-14, by gender and age, 2001-04
Figure 9: Average monthly income of children aged 15-16, by gender and age, 2001-04
Children’s weekly spend increasing with hyper-parenting
Figure 10: Average weekly spend, 11-14-year-olds, 2004
NPD
MARKET SIZE AND TRENDS
Did 2003 mark a turning point?
Figure 11: UK retail volume and value sales of crisps and snacks, 2000-05
Figure 12: UK retail value and volume sales of crisps and snacks, by sector, 2000-04
MARKET SEGMENTATION
 CRISPS
Figure 13: UK retail volume and value sales of crisps, 2000-05
Launch of Sensations helped to establish a premium segment
Figure 14: UK retail value sales of crisps, by type, 2000-04
Sales of low-fat crisps have failed to see significant take-off
Figure 15: UK retail sales of lower-fat potato snacks*, 2000-05
Trend in packaging towards larger bags
Crisps by flavour
Figure 16: UK retail value sales of standard/regular crisps, by flavour, 2002 and 2004
 SNACKS
Snack sector has spearheaded market decline
Figure 17: UK retail volume and value sales of snacks, 2000-05
Stacking sector increasingly focused on dipping occasions
Figure 18: UK retail sales of stacking chips, 2000-05
Child-specific vs general
Figure 19: UK retail sales of savoury snacks in the UK, by type, 2000-04
THE SUPPLY STRUCTURE
Overall market share
Figure 20: Manufacturer shares in the UK crisps and snacks market, by value, 2002 and 2004
Crisps
Figure 21: Company shares in the UK crisps market, by value, 2002 and 2004
Snacks
Figure 22: Manufacturer shares in the UK snacks market, by value, 2002 and 2004
 COMPANIES AND BRANDS
Walkers
KP
Golden Wonder/Snack Factory
Procter & Gamble
Kettle Foods
Red Mill Snack Foods
Intersnack
Quaker Oats
Seabrook
Burts
Jonathan Crisp
Tayto Ltd
Tyrells
Other companies and brands
Own-label
NEW PRODUCT DEVELOPMENT
Introduction
Health-inspired developments
Low-carb
Low-fat
Low-calorie
Low-salt
Low-cholesterol
Higher protein
Flavour trends
Cuisine-led
Premiumisation and greater variety
Organic
Packaging
Targeting men and the adult consumer
Seasonal/limited editions
The future
 NEW PRODUCT BRIEFS
December 2004
November
October
September
August
July
June
May
April
March
February
January
ADVERTISING AND PROMOTION
Rising media spend
Figure 23: Main monitored media advertising expenditure on crisps and snacks, 2000-04
Declining market size could see advertisers rein in their spend
Figure 24: Main monitored media advertising expenditure on crisps and snacks, 2000-04
Walkers accounts for almost half of the total spend
Figure 25: Main monitored media advertising expenditure on crisps and snacks, by manufacturer and retailers, 2002-04
Walkers
Procter & Gamble
KP
Golden Wonder
Why is advertising so important?
Figure 26: Agreement with statement ‘I like to buy things seen in adverts on TV’, 7-10 and 11-14s, 2001-04
Attitudes towards television advertising not so positive amongst adults
Figure 27: Agreement with lifestyle statements on advertising, 2001-04
 BELOW THE LINE
Multibuy promotions dominate
Figure 28: Share of promotions in the savoury/salty snacks market, by type, January-December 2004 (multiple grocers only)
Figure 29: Instant win promotions, January-December 2004
Impulse sales in the independents are critical
DISTRIBUTION
Figure 30: UK retail sales of crisps and snacks in the UK, by type of outlet, 2002 and 2004
Figure 31: UK retail sales of crisps and snacks in the UK, by type of outlet and product, 2004
THE CONSUMER – CONSUMPTION TRENDS
 POTATO CRISPS AND POTATO SNACKS, AND OTHER SAVOURY SNACKS
Consumers cutting down on potato crisps and potato snacks
Figure 32: Weight of consumption of potato crisps and potato snacks, 2002-04
Other savoury snacks are spearheading market decline
Figure 33: Weight of consumption of other savoury snacks, 2002-04
 DETAILED DEMOGRAPHICS – POTATO CRISPS AND POTATO SNACKS
All users
35-44-year-olds are the greatest users, then usage declines with age
Retired, older consumers eschew potato crisps and snacks
Presence of children is a strong discriminator
Widespread usage throughout GB
Heavy users
Men are the heaviest users and heavy usage declines with age
Figure 34: Heavy usage of potato crisps and potato snacks, by age, 2004
Presence of children drives heavy usage
North/South divide
Family and pre-/no family lifestages are the heaviest users
Medium users
Men are most likely to eat crisps two or three times a week
AB consumers least likely to be medium users
The presence of children is not as great an influence
Low propensity for medium users in London but high in the provinces
Light users
Women are most likely to be weight-conscious
Better-off socio-economic groups are light users
Childless households are most likely to be light consumers
Smaller households most likely to be light users
Londoners are light users
ABC1 third age and ABC1 retired are most likely to be light users
 DETAILED DEMOGRAPHICS – OTHER SAVOURY SNACKS
All users
Women are more likely than men to consume other savoury snacks
Other savoury snacks are a mass-market product
Three quarters of those living in families eat other savoury snacks
Figure 35: Consumption of other savoury snacks, by presence children in household, 2004
Other savoury snacks users are found in the provinces
Heavy users
Children are the most important factor
Medium users
22% are medium users
Household size is again a major factor
Light users
Women are most likely to be light users
ABs are the lightest users
Concentration in one-person households in South East/East Anglia
Retireds show a low propensity to be light users…
…because they are most likely to be non-users
 PRODUCT TYPES
Figure 36: Crisps and savoury snacks purchased in the last three months, January-February 2005
The power of brands
No clear trend towards healthier products
17% of consumers purchased a multipack
Low-fat crisps have a strong feminine appeal
Pan-fried/hand-cooked crisps appeal to AB consumers
Biscuit-based snacks popular with younger adults
Children are a key driver of corn-based snacks
DVDs and videos drive popcorn sales
Families drive multipack usage
THE CONSUMER – USAGE: DETAILED DEMOGRAPHICS
 WEIGHT OF USAGE
Crisps and potato snacks
Figure 37: Penetration of potato crisps and potato snacks, by gender, age, socio-economic group, presence of children, marital status, working status, household size, region, lifestage and Mintel’s Special Groups, 2004
Other savoury snacks
Figure 38: Penetration of other savoury snacks, by gender, age, socio-economic group, presence of children, marital status, working status, household size, region, lifestage and Mintel’s Special Groups, 2004
 PRODUCT TYPE
Figure 39: Crisps and savoury snacks purchased in the last three months, by gender, age and socio-economic group, January-February 2005
Figure 40: Crisps and savoury snacks purchased in the last three months, by presence of children in household, lifestage and Mintel’s Special Groups, January-February 2005
Figure 41: Crisps and savoury snacks purchased in the last three months, by working status and household size, January-February 2005
Figure 42: Crisps and savoury snacks purchased in the last three months, by region and ACORN category, January-February 2005
Figure 43: Crisps and savoury snacks purchased in the last three months, by media usage, commercial TV viewing and supermarket usage, January-February 2005
THE CONSUMER – ATTITUDES AND BEHAVIOURS
Figure 44: Attitudes and behaviour towards crisps and savoury snacks, January-February 2005
Brand loyalty high
Snack avoidance as a route to weight loss
Women are eating fewer bagged snacks to lose weight
Older age groups that seem the most keen to cut down
Cutting out bagged snacks as the best way to lose weight
ABC1 pre-/no family believe it is the best way
Children, diet and health
Ethics and morality
Figure 45: Terminal education age of those consumers who agree it is wrong to market these products (crisps and snacks) to children, January-February 2005
Food literacy plays a major part
Education levels have a significant impact on childhood obesity levels
Dissonance in consumers’ beliefs and purchasing behaviours
Multipacks appeal most to consumers with children aged 5-9
Better value multipacks appeal to budget shoppers
Crisps and snacks for adult sharing
ABC1 families and retired offer crisps when entertaining
Loyalty and premiumisation
Younger consumers buy the best crisps available
 ASSESSING KEY TARGET MARKETS – CONSUMER TYPOLOGIES
Figure 46: Consumer typology groups for attitudes towards crisps and snacks, January-February 2005
Group 1: Snacking Slim (19%)
Group 2: Crisp Conscious (4%)
Group 3: Apathetic (52%)
Group 4: Brand Loyals (25%)
Snacking Slim and Crisp Conscious have similar purchases
Opportunities for healthy branding
A fifth of Apathetics do not buy bagged snacks
Brand Loyals five times as likely to buy branded crisps
Figure 47: Consumer typologies, by type of crisp purchased, January-February 2005
Half of Brand Loyals have only purchased one or two crisps/snacks types
Figure 48: Consumer typologies, by number of crisps types purchased in the last three months, January-February 2005
THE CONSUMER – ATTITUDES AND BEHAVIOURS: DETAILED DEMOGRAPHICS
Figure 49: Attitudes and behaviours towards crisps and savoury snacks, by gender, age and socio-economic group, January-February 2005
Figure 50: Attitudes and behaviours towards crisps and savoury snacks, by presence of children in household, lifestage and Mintel’s Special Groups, January-February 2005
Figure 51: Attitudes and behaviours towards crisps and savoury snacks, by working status and household size, January-February 2005
Figure 52: Attitudes and behaviours towards crisps and savoury snacks, by region and ACORN catgeory, January-February 2005
Figure 53: Attitudes and behaviours towards crisps and savoury snacks, by media usage, commercial TV viewing and supermarket usage, January-February 2005
Figure 54: Attitudes and behaviours towards crisps and savoury snacks, by gender, age and socio-economic group, January-February 2005
Figure 55: Attitudes and behaviours towards crisps and savoury snacks, by presence of children in household, lifestage and Mintel’s Special Groups, January-February 2005
Figure 56: Attitudes and behaviours towards crisps and savoury snacks, by working status and household size, January-February 2005
Figure 57: Attitudes and behaviours towards crisps and savoury snacks, by region and ACORN catgeory, January-February 2005
Figure 58: Attitudes and behaviours towards crisps and savoury snacks, by media usage, commercial TV viewing and supermarket usage, January-February 2005
 DETAILED DEMOGRAPHIC BREAKDOWN – CONSUMER TYPOLOGIES
Figure 59: Consumer typologies, by gender, age and socio-economic group, January-February 2005
Figure 60: Consumer typologies, by ACORN category, lifestage, region, presence of children in household, media usage and Mintel’s Special Groups, January-February 2005
Figure 61: Consumer typologies, by commercial TV viewing and supermarket usage, January-February 2005
THE FUTURE
The future heralds a change of zeitgeist
Decline in children aged 0-14 will offer manufacturers a challenge
Figure 62: Forecast population of children, 2005-10
Opportunities must reposition crisps and snacks on a healthy platform
Manufacturers will increasingly turn to the adult market
Greater opportunities for segmentation
Limited editions will remain important
Legislative issues remain unclear
FORECAST
Market set to see torpid growth
Figure 63: Forecast of the crisps and snacks market, by value, 2005-10
Figure 64: Indexed growth rates of the crisps and snacks market in the UK, AT 2005 prices, 2005-10
Added-value propositions will aid crisp sales
Bad news for the market
Strategies for the market
Volume sales will lead decline
Figure 65: Forecast of the crisps and snacks market, by volume, 2005-10
Healthier varieties are key
Figure 66: Forecast of the crisps and snacks market, in percentage terms, 2005-10
Factors used in the forecast

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