UK consumers still need to be “educated” about healthy snacks, the chief executive of local firm Zetar told just-food today (1 May).
Earlier today, Zetar, which sells a range of confectionery and snack products to UK retailers and food manufacturers, announced the sale of its The Baked Snacks Company unit.
The loss-making business, which makes a range of low-fat crisps and biscuits, was sold to its CEO Mobeen Mehdi in a deal that could reach just under GBP2.7m (US$4m).
Ian Blackburn, Zetar’s CEO (pictured), claimed there was a lack of awareness among UK consumers about healthy snacks. Consumers, he said, were also shopping on price.
The Zetar boss added that some of Zetar’s food manufacturing clients had also scaled back plans to launch healthy snack products this year to focus on their core ranges.
A combination of those factors meant that Zetar could not afford to keep a loss-making business amid the economic downturn.
“The baked snacks category needs some bigger players to promote and educate the consumer,” Blackburn told just-food. “But, obviously, in the current economic climate manufacturers are focusing their marketing spend on existing brands.”
Blackburn said there had been “a number” of expressions of interest in The Baked Snacks Company, which, in the 12 months to 30 April 2008, made sales of GBP2m and an underlying operating loss of GBP900,000.
However, Blackburn revealed that the potential buyers had found it difficult to raise funds for the business. Zetar’s deal with Mehdi, Blackburn said, reflected the difficulty in obtaining credit in the current economic climate.
Zetar is set to publish a trading update in the coming days and, while Blackburn could not talk in great detail about the company’s current performance, he said the business had overcome the effects of the collapse of Woolworths plc.
“Woolworths was just a temporary issue; consumers will shop elsewhere,” Blackburn said.