Analysts claim the sky's the limit in the crisp and snack market for growers prepared to be imaginative
Are reports of declining sales of potato crisps marking a gloomy outlook for potato growers? The latest research by Mintel estimates that sales of potato crisps declined to £1.34 billion in 2015 – the second successive year that sales have dropped, falling from a high of £1.39 billion in 2013. Produce Business UK investigates
The bare sales figures, while a little concerning, would suggest this is not a seismic shift in consumer behaviour, and David Swales, head of strategic insight at the UK’s Agriculture & Horticultural Development Board (AHDB), says instead the wider stats could highlight opportunities.
He explains: “The gross value of the crisps market is falling, but volume is rising. We are in a period of price deflation, which means shop prices are lower. From a grower’s perspective, this means the more they sell the better – the increase in volume sales means more potatoes are sold. There are actually greater opportunities to sell. Growers need to target the buyers with whom they have longer-term contact relationships with different markets to get the best deal.”
Mintel’s results may in fact show up a much larger issue, reflecting changing consumer tastes and emerging avenues for growers opening up in other areas. This is a market segment that is undergoing change and diversification. In its report, Crisps, Savoury Snacks and Nuts 2016, Mintel discovered that while sales of potato crisps have declined, sales of potato-based and other snacks have been growing rapidly, rising by 25% between 2010 and 2015.
Amy Price, senior food and drink analyst at Mintel, agrees with Swales that the crisps market is experiencing deflation, adding that “manufacturers and retailers [are] turning to discounting to drive volumes as part of the supermarket price wars, and the category is losing out to healthier alternatives, such as potato-based snacks”.
Many growers have for some time been focusing on creating their own value-added, gourmet crisps and potato snacks in order to reach a wider market. It can prove very lucrative.
Back in 2002, a Leominster farmer founded the Tyrrells crisps brand, building it up into a gourmet range sold throughout Europe and the US. In 2013, the Tyrells brand was sold for £100m to Investcorp, a Bahrain based investment company.
There are many other gourmet crisp brands offering familiar and unfamiliar flavours. Many of these brands stress local links, local food and seek to be highly innovative. Consumers are keen to try new things – and unusual flavours can capture attention, despite being more expensive than a standard pack of salt and vinegar crisps found in the supermarket. For growers prepared to be imaginative, the sky's the limit.
Corkers Crisps made on the family farm in Cambridgeshire sells a Natural British Crunch crisp offering a pork sausage and English mustard flavour, while Darling Spuds has a chorizo flavour. Focusing on special dietary needs and the demand for healthy eating can prove profitable too – Darling Spuds ensures that its products are gluten-free and certified by Coeliac UK, as well as being vegetarian friendly, thus tapping into distinct market areas.
Swales at AHDB says: “Consumers are prepared to pay more money… for quality, something extra. They will pay if there is a good story and extras – this is an opportunity for growers to provide a premium product. We have seen a lot of product launches over the past few months and this is set to continue. If you want to go down the processing route, you need to have added value.”
Mintel’s report indicates that British consumers have a hunger for snacks. In the last 12 months, over 92% of British people have eaten some type of potato-based snacks, including tortilla chips, cheese puffs and standard potato crisps.
Popcorn is an increasingly popular option, especially among younger consumers, as this is regarded as a healthy option. With producers indicating that the variability of the English climate means there is little scope for growing suitable kernels in the UK, English producers will find it difficult to compete with kernels from the US, southern Europe and Africa.
This sector is expected to grow. Obesity rates in the UK are now the highest in Europe, with over 20% of the population regarded as obese, while 45% of males are overweight. Snacking is often pinpointed as one the key reasons for the growth of obesity, and all readers of this publication will have seen the resulting campaigns to encourage people to eat healthy snacks.
More than 68% of those questioned in the Mintel report indicated they would be very interested in crisps made using healthier cooking oils, such as olive oil or coconut oil. Creating thicker crisps that absorb less oil can make a difference too, without altering the taste.
“Greater use of healthier oils, such as olive oil and coconut oil, would likely appeal to the majority of users,” states Mintel analyst Price. “Such innovations could also add value to the market with these ingredients perceived as being more premium. Currently, examples are rare – indicating untapped potential in this area.”
Superfood crisps are regarded as another burgeoning market. Some 45% of those questioned for the Mintel report were extremely interested in the idea of superfood vegetable crisps. With average prices around £2 to £3 a bag, these are crisps that combine unusual ingredients such as kale, beetroot, baobab and onion kale, purple corn kale, or wasabi wheatgrass kale.
InSpiral, one of the companies making dehydrated raw kale chips, indicates that the number of customers asking for these products is growing. It sources all its kale from the UK, dehydrates it and creates crisps without any additives or trans fatty acids. Fruit crisps are also seen as being a healthy option, such as the Tangy apple or Sweet Apple produced by Perry Court Farm in Kent.
Clearly there is potential for renewed expansion in the crisps market, even though numbers are outwardly falling. There are definite opportunities for growers who take the initiative to innovate and think outside the box (or even the packet). The onus is on producers to work with the market, spot trends and discover opportunities.