The traditional bagged snacks market is having a tough time, faced with public concern with growing levels of obesity and the crusade to get schoolchildren eating better food, led by television chef Jamie Oliver. Brands are suffering as consumers turn away from traditional snacks to improve their diets and reduce their waistlines.
The sales downturn has forced manufacturers to boost their marketing activity. Market leader Walkers Crisps is no exception and, in line with other brands in the category, is experiencing a drop in sales. According to AC Nielsen, the bagged snacks category shrunk by 1.7 per cent in the year to October 2, 2004, while Walkers’ core sales fell by 1.9 per cent over the same period.
A Walkers spokeswoman says: “It has been widely reported that this is a challenging time for the entire category. However, we have a wide range of products and in some areas are seeing excellent growth; we are committed to our investment in the category.”
In a bid to stem the decline and as part of this investment, Walkers plans to launch a multi-million pound text promotion in which the brand will give away 9,000 iPod Minis in September (MW last week).
The spokeswoman says the core Walkers range remains the UK’s number one grocery brand: “Walkers remains our best-selling crisp range and, as always, remains the focus of our investment, both in terms of developing new products and innovative promotions, including last year’s ‘walk-o-meter’ giveaway and our latest iPod promotion.”
Industry sources say the iPod promotion is designed solely to boost volume sales. To ensure that it does, the promotion will receive extensive marketing support including a TV campaign, dedicated packaging and in-store activity. It is not clear whether the advertising will star Walkers’ brand ambassador Gary Lineker, who appears in TV executions for both Sensations and the core range.
One source says: “Walkers needs retailer support for this as it must recoup the cost of the packaging and texting. The iPod promotion will be everywhere during September.”
The problems suffered by Walkers Crisps are symptomatic of the market in general, says Will Brown-Swinbourne, who heads the Golden Wonder account at JWT. But he points to the success of the brand’s premium ranges, such as Walkers Sensations, as an example of where the market is still growing. He says: “The success of Sensations has cannibalised sales from Walkers’ own core range.”
But he adds that it will be supermarket own-label ranges that will overtake the branded standard crisps. “The nature of the retailers means that the obvious thing for them to do to keep trade spend low and get the most out of their relationships with manufacturers, is to develop the premium brands,” he says.
While Walkers is keen to stimulate sales in its core range and develop its premium portfolio, it also has its eye on the growing “better for you” category. It has already launched Potato Heads, a range of low-fat crisps with no artificial flavouring, colouring or preservatives, aimed at children.
This focus on healthier snacking has been extended to the core range: Walkers has reduced the saturated fat content of its crisps (MW November 27, 2003). It has done this by changing to a blend of high oleic sunflower oil that helps reduce levels of saturated fat by 30 per cent. Walkers is understood to be planning to reduce it by a further 20 per cent next year, and has introduced Sensations Olive Oil, a version of its premium product lower in saturated fat. Walkers is also working on reducing the salt content of its crisps by between five to 11 per cent and is launching a no-salt variant called Potato Heads Naked.
But it’s not just the crisps that are evolving. Last week, PepsiCo announced it has restructured its divisions to “meet the demands of a changing market” and provide the “level of focus required across these areas”. Walkers vice-president of marketing Neil Campbell becomes general manager of the division as part of the changes.
An industry insider says Walkers is already taking the initiative as market-leader and innovating in the healthier categories. The changes in management will ensure that the company increases its efforts to stay in step with consumers and their changing tastes and demands.
Facts and Figures
Walkers Crisps launched in 1948 and has grown into the UK’s number one grocery brand.
Henry Walker, the man who started making the crisps, was a pork butcher who turned to making crisps to maximise his factory capacity during rationing after the Second World War.
Gary Lineker, the long-standing star of the brand’s advertising, first appeared in a Walkers ad in 1995.
Walkers spent &£17m on advertising for the year to March 2005 (AC Nielsen Media Research).
Walkers had a 37.3 per cent share of the UK crisp market in 2003 (Datamonitor).
The UK spent &£994m on crisps in 2004. The market is set to grow to &£1.02bn by 2009.