Home entertainment surge fattens snack producers

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The trend towards home entertaining as a consequence of recession has produced a big uplift for a sector not always associated with leisurely dining – savoury snacks, nuts and crisps.

In 2010, the UK’s savoury snacks market was worth £2.4bn, up 5.6% on 2009, according to new figures from Nielsen, the consumer trends research specialist, which has recorded consistent growth in the sector over the past five years.

One of the main contributors to this is the so-called “sharing market” – bigger bags that people can pass around – which was up 12.5% last year to £608m. Sharing market growth is particularly pronounced for premium snacks, the higher priced products aimed at adults.

The volume savoury snacks sector is dominated by big corporate players. United Biscuits’ Teesside factory, for example, whose products include McCoys, marketed as “man crisps”, last year made almost 1bn packs of crisps. In Rotherham, South Yorkshire, UB’s KP Nuts factory produces 1.8m packets of nuts a week.

KP stands for Kenyon Produce, an allusion to Kenyon Sons & Craven, founded in 1853 as a manufacturer of sugar confectionary, jams and pickles, operating from Rotherham and Hull.

In spite of the big volumes, this market, driven by consumers’ fickle fancy for affordable self-indulgence, offers scope for ambitious smaller companies such as Yorkshire-headquartered Seabrook Crisps, a family business, demonstrates.

Concerns over healthy eating are bringing opportunities to innovate by reducing levels of saturated fats and salt, while the British taste for spicy flavours provides possibilities for ethnic producers; one of the largest, Kashmir Crown Bakeries in Bradford, founded by Pakistani-born Mohammed Saleem in 1966, employs more than 150 people, producing lines stocked by Tesco and sold internationally.

The sector has potential too for entrepreneurs with great ideas, a feel for consumer trends and a knack for smart marketing, as the former County Durham steelmaking town of Consett can attest.

The Phileas Fogg brand, an early premium snacks trailblazer, made its provenance, Medomsley Road, on Consett’s Number One Industrial estate, famous. The founders of Derwent Valley Foods, the company behind the brand, sold the business in 1993 to United Biscuits for £24m net. Roger McKechnie, DVF’s leader, and co-founder Keith Gill are building another Consett food business, Tanfield Food Company, selling prepared meals.

United Biscuits last year made the Phileas Fogg brand the official snack sponsor of the Gastro Alfresco campaign, aimed at barbecue lovers. The Consett factory employs 150 people; in 2010 it sold 61.6m packets.

Another snacks plant, in Tanfield Lea, was founded in 1996 by John Pike, a DVF co-founder, who saw the potential for savoury pretzels. The company, Union Snack, was bought in 2007 by Intersnack, Europe’s second-largest supplier of salty snacks.

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