Whether at the movies, the football or with your nose buried in a good book, a tasty snack makes the experience all the more...flavoursome!  Key Note's Market Report on snack foods covers savoury snacks in almost all their forms - potato crisps/chips, other savoury snacks (including vegetable crisps, tortilla chips, products made from rice, maize and other grains, and baked products) and snack nuts.

Key Note reports that retail sales of snack foods were worth an estimated £2.15bn in 2007, having risen in value by just 0.4% on the previous year. Market growth continues to be driven by sales of larger pack sizes for sharing, but also by consumer uptake of healthier products, in which there has been a substantial amount of new product development (NPD), resulting in innovative products such as Walkers Baked (potato crisps that are baked, rather than fried). Consumers are increasingly looking for products that are low fat, low calorie, low cholesterol, low sugar, wholegrain, low sodium, and with added vitamins and minerals. These ‘healthy' options increased in importance in 2007/2008, as the media was (and continues to be) full of stories focused on the link between ‘junk' foods and obesity.

Penetration of snack foods in the UK is high, standing at around 85% for potato snacks and around half the population for other savoury snacks and snack nuts. Nevertheless, the high degree of NPD and intense competition ensures that the market remains dynamic.

Both the UK and global markets are dominated by PepsiCo. Key Note's research found that penetration of the US company's core Walkers brand in the UK was above 59% in 2008, which was significantly higher than that of its nearest competitor brand, Pringles, although there are signs that Pringles is closing the gap on Walkers' dominance of the UK snacks market.

The recent turmoil in global financial markets and the rise in world fuel and food prices have damaged business and consumer confidence. However, as savoury snacks are perceived as an indulgent treat and have a relatively low unit price, demand for these products has not suffered as much as other consumer products.

Although a growing population will increase demand to some extent, an ageing population is likely to prove detrimental to demand as children and young adults are the most enthusiastic consumers of savoury snacks. Value growth of savoury snacks over the next four years is expected to be modest. 

FACTS:

• Household penetration of snack foods is high.
• For many households, snacks are part of the weekly grocery shop, as well as being popular impulse purchases.
• Savoury snacks are no longer as widely available in schools as they once were, either in canteens or from vending machines.
• With the current emphasis on health issues and obesity, many parents are seeking healthier snack alternatives, such as fruit, for their children.