Retails sales of sweet and savoury snacks in Spain were up almost 5% in 2004 compared to the previous year. New products, improved quality and perceived healthiness have all boosted the sector, as has the increasing number of women joining the workforce, as Euromonitor’s senior packaged food analyst, Francisco Redruello, reports.
Euromonitor International estimates that retail sales of sweet and savoury snacks in Spain reached €983m (US$1.19bn) in 2004, up by nearly 5% in current value terms from 2003. Sweet and savoury snacks’ per capita consumption (in retail volume terms) is slightly higher in Spain (3.7kg) than the average in Western Europe (3kg). According to Euromonitor International’s latest research this is down to the strong growth of categories such as nuts and crisps/chips since 1998, underpinned by a plethora of new developments launched in the Spanish market.
Furthermore, sweet and savoury snacks have benefited from a dramatic change in consumer lifestyles. Spaniards’ available time to prepare traditional meals has diminished considerably, mainly as a result of the increasing number of women joining the workforce. Moreover, manufacturers have invested heavily to improve the quality and health of the lines introduced, which have resulted in an improved perception of the healthiness of sweet and savoury snacks among Spanish consumers.
Healthy lines drive growth of popcorn and nuts
Popcorn and nuts recorded the highest growth in 2004, both rising by 6% in current value terms, according to Euromonitor International’s estimates. Sales of popcorn were driven by new product developments in 2003 and 2004, with the launch of premium microwave popcorn with new and sophisticated flavours. Growth in nuts was also driven by new launches of healthier and tastier nuts, helping to improve the perception of these products among consumers.
Interestingly, new product development within nuts in 2004 focused on the message that nuts make up an integral part of the Mediterranean diet. As a result, manufacturers began to introduce shelled nuts especially designed and prepared for inclusion in salads. One of the most important examples was Grupo Importaco’s introduction of a selection of cleaned and shelled nuts in mid 2004. The new line included walnuts, sesame, pumpkin seeds, pinions, raisins and edible sunflower seeds, designed to be mixed in salads
Private label pushing down prices of chips/crisps
Euromonitor International estimates that retail sales of chips/crisps reached €317.8m in 2004, up by over 4.6% in current terms on 2003. Retail value growth was slowed by the increasing importance of private label within chips/crisps, offering good quality at low prices. Quoting an industry source interviewed by Euromonitor International: “…retailers are principally promoting their private labels and allocating less space for branded snacks…”. Tortilla/corn chips grew, on the other hand, by an estimated 2% in current value terms in 2004. This low growth is due, Euromonitor suggests, to leading company Snack Ventures’ allocation of a lower advertising spend in comparison with previous years to support tortilla/corn chips. Individual packaging incorporating sauce was one of the major contributors for value sales of tortilla/corn chips in 2004.
Reduced fat chips/crisps gained share at the expense of the other varieties to account for 3% of total volume sales in 2004. Heavy advertising by Snack Ventures in support of its launch of Lay’s Ligeras, chips fried in sunflower oil, in combination with increasing consumer demand for low-fat products, spurred sales in 2004. However, some consumers still perceive the flavour of reduced fat chips/crisps to be inferior to that of full fat varieties, which constrained sales. Snack Ventures expanded Lay’s Ligeras in March 2005, adding new flavours to the existing line.
New line of fruit snacks
Euromonitor International estimates that fruit snacks achieved retail sales of €24m in 2004, up by 5% on the previous year. Fruit snacks are dried or preserved fruits sold usually in pouches and include, in order of importance in sales terms: plums, dates, grapes, figs and apricots. It is also possible to find some fruit snacks, such as figs, coated with chocolate or sugar. The fact that the products are genuine fruit and not artificial pastes and/or flavours limited the possibilities for new product developments, particularly in a product where tradition is the main driver for sales.
Although sales of fruit snacks are highly seasonal and concentrated around Christmas, Spanish manufacturer Grupo Siro managed to stimulate some interest by promoting its Veg’s line, introduced in mid 2003, in supermarkets and hypermarkets. The new line consists of crunchy slices of vegetables and fruits. They are heavily advertised on TV as an innovative and healthy snack to be consumed throughout the year. In fact it was launched in summer, contrary to what is usual for fruit snacks, which are usually launched around Christmas.
Growth expected to slow down over 2005-09 period
Retail value growth of sweet and savoury snacks in Spain will grow by 10% in constant terms over the 2005-09 period, according to Euromonitor International’s projections. This represents a slow down in the growth recorded over the 1998-2004 period, when retail sales grew by almost 30% in constant terms. The referred slow down is a result of the increasing maturity of these products, and the pressure on prices expected from private label in the next few years. By contrast, positive macroeconomic prospects, new developments increasing the healthiness mainstream brands and busier consumer lifestyles will be factors helping to maintain the positive growth in value for this sector.
New functional, better-for-you snacks in the pipeline
According to Euromonitor International, increasing sophistication of Spaniards’ tastes has the potential to become a major driver of sales within a product area already showing signs of high maturity. Companies are expected to launch premium lines in order to differentiate from growing private label and to meet consumers’ demands. Sophistication will come in the form of new flavours and functional properties, usually in a more sophisticated packaging.
Euromonitor International points out that manufacturers should continue focusing on the establishment of chips/crisps fried in olive oil, promoted as healthy products, in order to overcome the widespread perception of some sweet and savoury snacks being unhealthy. The industry is also likely to introduce, in the short term, functional snacks, including healthier versions of existing varieties by incorporating omega 3 and omega 9 oils, extra calcium and extra vitamins.
For more details on Euromonitor’s report on Sweet and Savoury Snacks in Spain, click here.