Processors are forced to innovate in response to health consciousness
London, United Kingdom (PRWEB) March 20, 2013
The Potato Crisps & Snacks Production industry has managed to retain some of its crunch despite being faced with some difficult challenges over the past five years. An era of health, nutrition and convenience has ushered in new consumer tastes, lifestyles and dietary concerns that have caused producers to adapt to changes in the marketplace. The emphasis on healthy eating and healthy living has adversely affected demand for some industry products, especially potato crisps and frozen potato foods, due to the perceptions that these items are unhealthy. Alternatives such as fruit and cereal products have impeded industry growth. In response, producers have been proactive in introducing a range of new products that address trends of health and convenience, such as low-fat varieties of traditional crisps with innovative packaging. This could not fully reverse the effect, however, and revenue contracted in the two years leading into 2012-13. Amid the economic malaise, sales of frozen foods have remained strong as consumers chose to cook inside the home. Producers of frozen products targeted family consumption heavily in order to capture the expanded market. In the five years through 2012-13, industry revenue is expected to increase at a compound annual rate of 1.5% to total £1.68 billion. During 2012-13, industry revenue is expected to contract by 3.3%.
Over the next five years through 2017-18, the industry is forecast to remain resilient, with modest growth expected to be primarily driven by slow economic recovery and the continuing trend of snacking. Busy lifestyles, health concerns and preferences for convenience will continue to determine product innovation and the types of strategies that producers follow. GDP growth is expected to strengthen gradually during the period as household incomes recover, which will benefit the industry as consumer confidence and spending improve. While this will bode well for sales of potato crisps, particularly the gourmet and speciality varieties, sales of frozen potato products such as chips and wedges are expected to decline slightly, as consumers revive eating out habits. Threats posed by private label products and healthy alternatives will continue over the next five years, eroding access to consumer snacking occasions and eating up potential for revenue gains.
The Potato Crisps & Snacks Production industry has a medium level of market share concentration, with the top four players estimated to account for about 69.4% of the market in 2012-13. Similar to other snack and prepared foods industries, the market is dominated by multinational behemoths such as PepsiCo, McCain Foods, United Biscuits and Kellogg.
For more information on the Potato Crisps & Snacks Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes companies that manufacture and preserve frozen and dehydrated potatoes. These companies also produce potato snacks, crisps, flour and meal. Industrial potato peeling is also included in the industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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