The ongoing trend towards snacking in place of the traditional three meals a day has benefited the snack foods market, with retail value reaching 2.29bn in 2002.

Snack foods in this context 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. The ongoing trend towards snacking in place of the traditional three meals a day has benefited the market considerably.

Research and Markets have announced the addition of the "Snack Foods Market Report Plus 2003" report to their offering.

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% 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% 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, we forecast that sales of snack foods will continue to grow slowly but surely over the period to 2007.

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REPORT DATA SUMMARY:

Snack Foods Market Report Plus 2003

Category: Food

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