Last year Asian Trader had a big in-depth interview with PepsiCo snacks guru Nic Storey, and we caught up with him again to get a bulletin on what’s commercially crispy in summer ’24
Last year, Asian Trader did a big Interview with Nic Storey, Senior Sales Director for Impulse & Field Sales at PepsiCo, for our summer focus on Crisps, Snacks and Nuts (CSN). This year we met Nic again for a catch-up to hear what he thinks is going on and what the near future of snacks trends looks like, especially since by now Covid is far in the rear mirror. So, are we back to the old normal? Are we there yet?
“I don't think we're back to 2019, pre-pandemic norm,” Nic answers. “I think the new norms have changed. Some categories are buoyant now and we can hardly keep up with snacks, which is one of the fastest growing categories. It's a nice problem to have. If you go to any store, whether it be a massive Tesco or a small independent, snacks is one of the highest-performing categories right now.”
CSN is one of the mainstays of the c-channel, so this is good news, and Nic is surprised by the astonishing rate of growth (“pretty amazing”), which is holding at nine per cent in impulse.
"In symbols and indies, CSN is worth £638 million, so this is a big, fast-moving category, and we're finding that retailers are getting behind the category as much as ever – not just because it's driving growth for their stores, but also because it's a category where there's a lot of innovation, and I think retailers enjoy getting behind that, because they know that local-store shoppers like to give things a go, and they get excited.”
As we like to say, it is the nimbleness of indie retailers, in coordination with fast-acting manufacturers, that keep the shelves interesting and alluring for customers, with NPD and offers, changing continually in a way that mults can never manage.
“They're not there to go into a small store to just have the same small, tight range week in, week out, and boring,” Nic agrees: indie shoppers need variety and action, novelty and new tastes, and CSN delivers.
One thing that dependably draws the punters in is the secret weapon of convenience: price-mark packs (PMP).
Trusty PMP
“PMP is the biggest and the fastest-moving part of the category,” Nic says, accounting for up to 70 per cent of c-channel sales in some categories – such as CSN. “That's a role PMPs are playing, and that's the way that shoppers in this channel can get the reassurance and make sure they're controlling their spend,”
The cost-of-living crisis continues across retail, of course, although grocery and especially convenience is somewhat protected – we are not selling furniture, after all, and people always need to eat. And to have fun while they’re at it, despite paying a little more than a mult price.
“People want that convenience, and even if something costs 10p more, they're happy to pay it," says Nic. "You can offer value in different ways, so people can bulk buy and get value that way [in mults and discounters], or they can buy smaller packs.
“What we're finding is that the reassurance of value that PMPs give in this channel is almost our bespoke way of trying to help consumers manage what they're spending. That moved across CSN from £1 to £1.25 across nearly every single manufacturer a couple of years ago, and that's bedded in really, really well.”
PMP is now the biggest and fastest-moving part of the CSN category, and it’s still a relatively new thing.
“Hearken back maybe 15 years and PMP barely existed,” Nic states, “so this really has grown pretty fast, pretty quick, over that period. It's the most important part of our CSN category, without doubt – in this channel – and what I really like, because I don't look after the groceries I look after this channel, and I'm really passionate about it, is that PMP is a differentiator, you know, that you don't get PMP in an Asda or a Sainsbury's or Morrison's or a Tesco.
“This is almost like our play, and this is our way of doing it, and I think that's another reason that retailers get behind it in this channel.”
It is interesting that in a period where many chains and suppliers are maintaining margin through stealth shrinkflation, the honesty of PMP is even a further selling point, no matter an increase to £1.25.
“Sometimes you can look at the grammage of packs, and sometimes you can look at the price. We decided that keeping the grammage the same, and in fact, in a couple of bags, even increasing it, was best,” says Nic.
"With Walkers Crisps, we actually put another five grams into those bags, up from 65g to 70g, to offset some of that, that step up in price – and it's landed really well, it's here to stay. That’s actually a pretty good size, and we find about half of consumption is someone on their own who wants a big eat, and about half is people using it as a small sharing bag. It bridges that single-bag-up-to-sharing-bag gap.”
Nostalgia and premium
Back catalogues are worth a lot of money – David Bowie sold his song rights for £200 million – and there are many brands that are still around or ripe for revival that have a great and increasing appeal. Nic believes this careful curation and merchandising of under-promoted jewels will also be a trend going forward, with nostalgia absolutely the new thing. The brands that have been around for decades are still goldmines.
“I just had a new starter in my team,” says Nic, “and he'd done all his research for the interview and everything. But even yesterday, when we were taking him through the portfolio, he was like, ‘I didn't realize Scampi Fries and Bacon Fries were ours,’ [both Smiths], or ‘I didn't realize about Frazzles and Chipsticks’.”
Nic explains that heritage brands, sometimes don't get the love they deserve: "Consumers love them, but they're out of sight, out of mind.”
He says those venerable but under-appreciated bags are seen as “value brands”: “So, whilst PMP is a great play for value for money, sometimes the value brands are lower tier. Walkers is our mainstream or mainstay brand, but then you've got Frazzles and Chipsticks and Cheetos that we're trying to do more with in this environment.”
Sales are way up, with lots more headroom available – nostalgia is the future!
Mirjam Fogarty, head of operations, Pipers Crisps
Another impact of inflation and tight budgets is the paradoxical one of ongoing premiumisation – spending more on quality as a cheap treat – again, a space in which CSN thrives, and I mention to Nic the rise and rise of Pipers Crisps into the space occupied by brands such as Tyrrells and Kettle Chips, along with many other niche gourmet CSN brands, that appear to be hoovering up an ever larger part of the market.
"Pipers is the best crisp out there,” he declares proudly. "The flavors are so good. We bought the business in to really go into new spaces with it. We've got some amazing classics like cheese and salt and vinegar, but what's really important is the amazing provenance, and even though it's part of the PepsiCo family, we haven't touched that or diluted it one bit.”
Nic says that, for example, the sea salt flavour has to have all of its salt coming from Anglesey (tidal salt dried naturally from sea-water) and nowhere else. Likewise, the Longhorn beef has to come from Longhorn cattle in Berwick.
“We've kept to that, because it's got to be the best provenance and the best crisp out there, and we've just invested £8 million into the Piper's factory a few weeks ago. We've opened up the capacity enormously so that we can go after this brand. That doesn't mean it's going to go everywhere, because we know that it's got a role to play, and that role is mostly in the out-of-home or away-from-home channel, which includes the on-trade, but also convenience as well. “
Taking an originally on-trade brand such as Pipers into c-stores is partly what Nic means by innovation – a great and ongoing driver of c-channel sales. This leads us on to talk about another very interesting way PepsiCo is innovating: by swapping a type of snack and making the flavour the platform instead – all in the name of hotness.
Feeling chilli
“One of the trends that we've really got behind is hot and spicy," Nic enthuses. “It came over from the USA, and we're seeing it across Europe. There is a great propensity for UK shoppers to buy into hot and spicy, something like 51 per cent of UK consumers want to try it, the second highest benchmark across the whole of Europe, second only to Turkey, who are the top and love their spicy food."
It’s a phenomenon that’s been going on for a while and is gathering pace. PepsiCo launched Kurkure Masala Munch to great fanfare and success (and won an Asian Trader Award for it), and they are now expanding the hot and spicy concept to make the flavour the key, applying it across brands as an identifier in itself.
"What we've done very differently is this,” he explains. “We'll often launch a brand or a sub-brand, and then maybe three flavors underneath, but we've tipped the idea on its head. Instead, we've launched a flavour with three sub-brands underneath, so our Extra Flaming Hot is a ‘flavour platform’, and underneath that, we've got it in Wotsits Crunchy, Walkers Max and Doritos. The priority of the campaign has all been about heat and flavour, not a brand.”
So the flavour is the platform, got it. It’s a great concept.
“We do things well at scale,” Nic continues, “so we’ve put the Extra Flaming Hot into every channel, because we're a mainstream, big supplier and we need to please as many people as possible.”
This innovation spreads into all aspects of sales, including the merchandising of idea as well as product – and that is where theatrics comes in.
"The nuanced approach we took for convenience [with Extra Flaming Hot] was that we gave it a lot more love for the launch this year. I'm really proud that we brought over 20 independent and symbol retailers on board, engaged them before the launch so we could refine our launch plans, and then just gave them all of the armory to go ballistic on the launch. And we had the coolest engagement ever.
“Retailers had their tasting stations in the store, they were doing TikTok videos – we had one which involved him throwing a smoke grenade into his store, filling the whole store with billowing smoke before walking through and emerging with the product.”
Nic says he was confident it could go well, “but it went massive”. He says, “We gave ‘over-and-above' POS kit, like full arches and everything with fire extinguisher setups, to these retailers – and the halo effect of that is enormous.”
For Nic, the beauty of the c-channel (and he genuinely loves it) is the camaraderie and helpfulness:
“Impulse is a really harmonious channel in that people are keen to do well, but they're not elbows out and are keen to share best practice, share the love and learn from one another as entrepreneurs – and I really like that. We've lit the fuse, pardon the pun, and then it's really, really taken off in this channel. “
His prediction for the next year?
"Hot and spicy isn't just a flash in the pan, so I see that continuing, without doubt. I see the momentum on PMPs as well. I think those two areas, with a bit of nostalgia and reinvigoration of old brands.”
SPAR UK has announced the appointment of Michael Fletcher as its new managing director.
Fletcher spent 22 years at Tesco plc, where he held numerous senior commercial roles in the UK, Ireland and Asia. He joined Co-op Retail in 2013 where he held the position of chief commercial officer before moving on to become CEO of Nisa Wholesale, a role he held until 2022.
Since leaving Nisa, Fletcher has taken on several non-executive director and board advisory roles. He is also the founder and chief executive of Sleet Brush Limited, where he focuses on designing and implementing innovative solutions to complex retail and wholesale challenges.
“Michael has outstanding credentials in commercial, retail and FMCG sectors, with experience across various trading environments,” Nick Bunker, non-executive chair, SPAR Food Distributors Ltd, said.
“His professional capabilities and high standards consistently drive excellent business performance and operational resilience. We are delighted with his appointment and look forward his lasting and positive contribution to the SPAR business.”
Fletcher added: “SPAR is a globally recognised and respected brand, and I am thrilled to join the team. I look forward to supporting the ongoing strengthening and development of the SPAR proposition in the UK.”
October saw shop prices fall marginally further into deflation for the third consecutive month with food inflation eased, particularly for meat, fish and tea along with chocolate and sweets as retailers treated customers to spooky season deals, shows industry data released today (29).
According to British Retail Consortium (BRC), shop price deflation was at 0.8 per cent in October, down from deflation of 0.6 per cent in the previous month. This is below the 3-month average rate of -0.6 per cent. Shop price annual growth was at its lowest rate since August 2021.
Food inflation slowed to 1.9 per cent in October, down from 2.3% in September. This is above the 3-month average rate of 2.1 per cent . The annual rate continues to ease in this category and inflation remained at its lowest rate since November 2021.
Fresh Food inflation decelerated in October, to 1.0 per cent , down from 1.5 per cent in September. This is below the 3-month average rate of 1.2 per cent . Inflation was its lowest since October 2021.
Ambient Food inflation decelerated to 3.1 per cent in October, down from 3.3 per cent in September. This is below the 3-month average rate of 3.3 per cent and remained at its lowest since March 2022.
Helen Dickinson OBE, Chief Executive of the BRC, said, “October saw shop prices fall marginally further into deflation for the third consecutive month. Food inflation eased, particularly for meat, fish and tea as well as chocolate and sweets as retailers treated customers to spooky season deals. In non-food, discounting meant prices fell for electricals such as mobile phones, and DIY as retailers capitalised on the recent pick-up in the housing market.
“With fashion sales finally turning a corner this Autumn, prices edged up slightly for the first time since January as retailers started to unwind the heavy discounting seen over the past year.”
“Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed Government regulation. Retail is already paying more than its fair share of taxes compared to other industries.
“The Chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20 per cent downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment.”
Mike Watkins, Head of Retailer and Business Insight, NielsenIQ, said, “Inflation in the food supply chain continues to ease and this helped slow the upward pressure of shop price inflation in October, however other cost pressures remain.
“Consumers remain uncertain about when and where to spend and with Christmas promotions now kicking in, competition for discretionary spend will intensify in both food and non-food retailing.”
PayPoint has announced a new partnership with Leeds Credit Union (‘LCU’), a financial cooperative with 37,000 members, enabling them access to its CashOut service, effective immediately.
The partnership will mean that LCU customers can access their cash and savings across any of PayPoint’s UK network of 29,000 retailer partners. This represents an unprecedented growth in accessibility and the first partnership of its kind for LCU. Historically customers have needed to visit one of LCU’s four branches to withdraw money.
Leeds Credit Union provides straightforward, affordable financial services. As a mutual there are no shareholders, so it is owned by its members and always has the interests of the members at the heart of everything it does. The credit union prides itself on providing members with the most appropriate services based on their circumstances.
“Our partnership with Leeds Credit Union will enable its customers to access their funds more easily than ever before," said Jo Toolan, Managing Director of Payments at PayPoint. "We’re committed to pursuing these kinds of partnerships, which enable credit unions to offer a more competitive and technologically advanced service, while simultaneously making the lives of customers that little bit easier through enhanced access.”
Greg Potter, Head of Marketing & Member Experience at Leeds Credit Union, said: “Increasingly, we’re looking at ways that we can apply technological solutions and partnerships to add value to the experience of our members using Leeds Credit Union. This partnership is demonstrative of our determination to grow in their best interests and will make access to funds something that can be done at any of a number of PayPoint locations in the UK.”
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A Philip Morris logo is pictured on a factory in Serrieres near Neuchatel, Switzerland December 8, 2017. REUTERS/Denis Balibouse/File Photo
Marlboro-maker Philip Morris said Tuesday it planned to close down its two production sites in Germany, citing falling demand for cigarettes among Europeans.
"In recent years, demand for cigarettes in Europe has fallen significantly," the company said in a statement, adding that it saw the same trend for roll-your-own tobacco.
"This trend is expected to continue in the coming years," the company said.
Many smokers have been shifting to e-cigarettes, or vapes, and heated-tobacco devices.
Philip Morris employs 372 workers at its factories in Berlin and Dresden. Both sites are scheduled for closure next year.
The tobacco giant said it would begin discussions with labour representatives to find "fair and socially responsible solutions" for staff.
Nisa retailer Prem Uthayakumaran has made significant donations totalling £3,500 to two local community organisations through Nisa’s Making a Difference Locally (MADL) charity.
The funds will provide essential support to groups within the communities that his stores serve, helping them continue their invaluable work.
The first of these generous donations was a £1,000 contribution from Broxbourne Service Station in Hertfordshire, directed to the Lea Valley Karate Academy. The funds will enable the academy to purchase much-needed equipment, ensuring that young people and adults in the local area have access to high-quality resources as they develop their skills in martial arts.
Additionally, a £2,500 donation was made by Eastfield and Cross Road Service Stations to the Mansfield Town Ability Counts Football Club. The club, which provides opportunities for individuals with disabilities to participate in football, will use the funds to support their programs, enhancing the experience for current players and making it possible for even more participants to join.
In July 2024, Prem donated £1,000 to Voice of the Vale – a group of young performers at Nottingham Trent University. This followed further self-donations from Prem to Broxbourne Organisation for Disabled and to Mansfield Under 12s Football Club in 2023.
Prem Uthayakumaran said: “Supporting the communities around my stores has always been important to me, and through Nisa’s Making a Difference Locally charity, we’re able to make a real, tangible difference. The Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club both play vital roles in their respective communities, and I’m thrilled to be able to contribute to their success.”
Nisa’s Making a Difference Locally charity enables retailers to donate to local good causes through the sale of Co-op own brand products in their stores. A percentage of sales from these products goes into a MADL fund, which retailers can then use to make donations to charities, schools, sports clubs, and other community groups.Kate Carroll, Head of Charity at Nisa, said, “We are delighted to see retailers like Prem using their MADL funds to support such worthwhile local causes. Both the Lea Valley Karate Academy and Mansfield Town Ability Counts Football Club provide vital services to their communities, and donations like these enable them to continue their important work. At Nisa, we are incredibly proud of our retailers’ commitment to making a difference locally.”
Nisa’s Making a Difference Locally charity has been helping retailers like Prem Uthayakumaran give back to their communities for over 15 years, and with each donation, they help foster stronger, more Connected local areas.