Global snack market

Virginia Garavaglia, global brand footprint director, Kantar Worldpanel, provides an update on the market for snack products around the world.

More than 79 per cent of the world’s households now buy snacks. Over the past year, the number of times shoppers buy snack brands has increased by three per cent, according to Kantar Worldpanel’s Brand Footprint study, with growth being driven by emerging markets – particularly Indonesia, India and Brazil.

Four of the 10 fastest risers in the Brand Footprint Top 50, which ranks the world’s most-chosen fast-moving consumer goods (FMCG) brands, are Oreo, Cheetos, Lay’s and Doritos. These dominant performers have excelled at increasing their reach and motivating more shoppers to buy their products, more often, by focusing on the following five areas: positioning and marketing; innovation; local tastes; availability; and brand responsibility.

Positioning and marketing

These brands are bold in how they position and market their products. Doritos has brought in 4.6 million new shoppers over the past year through clear and consistent positioning, a focus on its ‘extreme’ flavours and brave, youth-focused communications. The brand is particularly popular in Mexico, Saudi Arabia, the US, Brazil and Taiwan, and is growing fast in Thailand, Brazil and Spain.

In Argentina Doritos embraced its irreverent positioning with the La Actitud Garpa campaign, which encouraged fans to submit ‘selfies’ to win a trip to Las Vegas. In Thailand, the Doritos Extreme Action Photography Best App let people add ‘extreme action’ frames and sounds to their images and encouraged sharing on Facebook to win prizes. The Doritos annual ‘Crash the Super Bowl’ competition – which invites amateurs to create an ad to be shown during the Super Bowl Final – continues to engage US consumers, with 111.5 million people tuning in to watch.

In 2013 Doritos launched its first global campaign, For the Bold, which aimed to connect its fans across the world, and revamped its packaging and logo to be consistent across all markets. The campaign kicked off at a sponsored gig headlined by Lady Gaga at the South by Southwest music festival in Texas; fans had to complete ‘acts of boldness’ to earn tickets.
Oreo’s innovative digital marketing has helped it to attract 19 million new shoppers in the past year – more than any other FMCG brand. When the lights went out on the New Orleans Superdome during the 2013 Super Bowl, one of its agencies came up with a real-time digital campaign – the spontaneity made possible by months of hard work spent building effective processes – during the 34-minute blackout. The tweet of an ad with a strapline ‘You can still dunk in the dark’ generated more than 15,000 retweets in an hour and several column inches in the press.

Innovation

The most successful brands never stop innovating. Gaining 7.8 million more shoppers in the past year, mainly in Indonesia, Thailand, the US, Russia and Brazil, Cheetos launched six new flavours in 2013 – some ‘limited editions’. These included Mix Ups Cheezy Salsa Mix, Crunchy Cheetos Tapatío and Super Flamin Hot, which developed a cult following in the US. Variants flavoured with Pepsi and Mountain Dew were introduced in Japan, which also led to significant media coverage in the UK and the US.

In France, Milka chocolate has increased the number of times it is purchased by consumers by one-third, year-on-year, largely thanks to a number of product launches that have elevated it to something more than ‘just a standard chocolate bar’. Diversifying from the tablet format, it has launched five new variants including cow shaped biscuit Choco Moo and a cake bar called Choco Tutti and now also sells a range of ice cream.

Owner Mondelẽz has fully embraced co-branding – partnering Milka with some of its other products to create exciting new products. Milka with Oreos and cheese and chocolate combination Philadelphia with Milka are now familiar sights in French supermarkets. The new products have created a real buzz around the brand, helping it increase its market penetration in France by four per cent, equivalent to gaining 1.5 million incremental shoppers. Oreo has also achieved remarkable success as an ‘ingredient brand’, featuring in Cadbury chocolate bars and even in a McDonald’s McFlurry.

Taking advantage of a new purchasing occasion, McVitie’s has grown its global reach by eight per cent by expanding its range to include breakfast biscuits – tapping into the demand for a breakfast option that is both nutritious and convenient. The segment was originally pioneered by market leader belVita in the UK. belVita’s current growth is being driven by Colombia and Saudi Arabia as well as the UK, where penetration has increased by five per cent in the past year fuelled by the $12.7m (€9.8m) Mondelẽz spent on marketing that emphasises its unique benefits: easy to eat on the move, tasty and satisfying, and providing slow release energy.

Local tastes

FMCG brands understand local tastes. Lay’s – the world’s eighth most chosen brand – is a veteran at tailoring flavours to local tastes, and has engaged consumers by involving them in creating new variants since 2008. The continued influence of the ‘Do us a Flavor’ campaign in the US has helped the brand increase the number of times consumers buy its products by seven per cent year-on-year. It uses social media to broaden reach, with people able to submit ideas via Instagram and Twitter. In the UK, bizarre suggestions such as ‘piri piri pigeon’ and ‘crunchy grasshopper’ have given Walker’s great fuel for PR.

From blueberry flavour ice cream in Indonesia to banana and dulce de leche in Argentina, Oreo is not afraid of adapting its recipe to gain new buyers. In China, where it is the number one biscuit, green tea ice cream and orange and mango are among the new flavours launched in 2013. However, Oreo was not an overnight success in the Chinese market. Having been present for 10 years without making much impact, research was undertaken to find out why. As a result of the findings it changed the biscuit’s formula to make it less sweet and introduced Mini Oreo packs to make it more affordable.

Availability

These brands make their products available. Many global snack manufacturers have extremely well-developed distribution networks in all of their markets, which encompass traditional trade channels such as family run stores in emerging markets where these are still popular. This ensures their products are always available when shoppers want them.
Local players, meanwhile, are building their power through global expansion. South Korean brand Orion has grown its buyer base by nine per cent in the last year, with localised production in nine countries including its three biggest markets: Vietnam, which it has entered as a stepping stone to Asia; Russia, which it plans to use as a route into Western Europe; and China. Orion is one of China’s most popular snack brands, with 62 per cent of households purchasing its products, including the well-known Choco-Pie, which is advertised as ‘A Good Friend’ for the Chinese market.

Brand responsibility

Successful brands have a responsible role in society. Cheetos’ highly successful ‘Year in Mexico’, where it is now bought by 80 per cent of households, was supported by an award-winning marketing campaign called ‘Let’s jump together with Chester Cheetos’. This encouraged kids to take regular exercise such as skipping, which effectively connected with families and positioned Cheetos as a fun and responsible brand.

Treat brands including Cornetto, meanwhile, have launched mini options that allow shoppers to indulge themselves – but with a smaller portion.

In the UK, Walker’s new air-popped Pops snack meets consumers’ health needs as well as enhancing the brand’s position as trusted and responsible. Extending its healthy brand equity across categories, Kellogg’s Special K has introduced a range of crisps for those looking for a snack without a heavy calorie load. The launch of Special K Cracker Crisps has helped the brand boost the number of times consumers in the UK buy its products by 33 per cent year-on-year.

The worldwide popularity of snacks is in part due to consumers’ desire for convenient food options they can grab and eat on-the-go – principally in emerging markets as disposable income increases, work patterns change and lifestyles become busier. But the category’s strong performance is essentially a consequence of the ability and agility of the brands that successfully develop new products that re-invent and re-invigorate it again and again, and create innovative communications that generate excitement and engagement.

What’s next?

We can expect to see demand for healthy snacking options grow over the coming months, with more cereal snacks, air-popped crisps and products made from ‘alternative’ vegetables such as carrot and eggplant appearing on the shelves. Brands that want to enlarge their global footprint should also consider offering low sodium versions of their products.
There are also growth opportunities for snack brands that respond to shoppers’ interest in provenance and locally grown ingredients – by producing crisps made from ‘home grown’ potatoes, for example – and provide people who are keen to upgrade with premium options that contain ‘gourmet’ ingredients, such as sea salt flakes.

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