PotatoPro Newsletter

Services for the Potato Processing Industry

November 25, 2008

In this issue

• Featured Event
• Featured Book
• Featured Market Research
• Featured Product
• Featured Article
• News Headlines
• New Companies
• Previous Newsletters

On PotatoPro:

Subscribe and we will inform you of the latest news, Products and Events for the Potato Processing Industry. Subscription is Free of Charge.

Subscribe by email.

Subscribe to our RSS feed

Since both Frito-Lay and Procter and Gamble just reported recent financial data I thought this was a good time to see how the savory snack market is holding up in the current economic downturn.

If one company is a good indicator of what is happening in the global snack market it is  Frito-Lay . Just have a look at the global market share of Frito-lay; It is more than 10 times the market share of Number two, Procter and Gamble, the manufacturer of Pringles.

Frito-Lay reported for the 3rd quarter a 9% revenue growth in North America, resulting from double-digit growth at Tostitos, Ruffles and Cheetos and high-single-digit growth in trademark Lay's and Doritos. Profit was up 6% and volume 1.5%. Frito-lay managed to pass on (most of the) higher oil and fuel costs (by increasing prices and reducing packaging sizes) without suffering a loss of overall volume!

In the Middle East/Africa/Asia (MEAA) segment Frito-Lay reported a snack volume growth of 9 percent, led by double-digit growth in the Middle East, China, and India. The snacks business in Turkey grew high- single-digits, while Australia experienced a low-single-digit decline, primarily due to increased pricing.

For Europe Frito-Lay refers to unfavorable circumstances and volumes growth in the low single digits. In the UK, low-single-digit growth at Walkers reflected the success of the value-added "Walkers' Brit Trips" promotion and solid pricing execution and cost control to offset significant commodity input costs. Strong top-line growth in the rest of Europe was led by high- teens snack growth in Russia and by mid-single-digit snack growth in the Netherlands.

Pepsico has initiated a "productivity program" and part of this program is a reduction of the  workforce with 3300 (keep in mind Pepsico has 185.000 employees!), of which 300 in Frito-Lay. Most jobs will be lost at Frito-Lays headquarters in Plano, but Frito-Lay also announced two plant closures: Closure of the Frito-Lay plant in Mission (Texas) and Closure of the Frito-Lay plant in Pointe Claire, Canada (Qc).

Historic long term growth of the Savory Snack market by region (Source: Datamonitor):

The second largest savoury snack manufacturer globally is Procter and Gamble. Procter and Gamble reports for its fiscal first quarter (July-September) that snacks volume increased mid-single digits due to double- digit growth in North America behind strong base business growth of Pringles and continued growth from Pringles Extreme Flavors and Stix initiatives.

Although some of Frito-Lay's and Procter and Gambles gains could have been at the expense of smaller local snack manufacturers, I interpret these results as a rather positive sign about how the snack market could hold up in a challenging economic situation. Especially if you keep in mind that price increases of ingredients and fuel are easing if not reversing.

And if you believe that stress result in more excessive consumption of snacks, the market may start to look even better.

Enjoy reading,

Paul van Eijck

Featured Events

I am currently busy finalizing my presentation "Latest Developments and Trends in Potato Processing" for the ALAP Conference in Mar del Plata, Argentina, a conference that starts in less than a week from today. If you are there, make sure to introduce yourself as one of the thousands PotatoPro Newsletter readers! Whether it is during the conference, in a potato field or on the beach of Mar Del Plata... (OK, I admit this is just a teaser for those who stay behind in a wintery Canada or a foggy Europe)

If you miss Mar Del Plata check out the International Potato Storage and Processing Convention on Prince Edward Island where I will present an updated version next year. 

More Potato and Food Processing Events...

Market Research Reports Savory Snacks

We are making good progress with the transfer of our Market Research reports to the new PotatoPro webshop. Here you can now find all the market research reports related to the savory snacks market. Let us know if you are looking for a specific report and can not find it. Check back on a regular basis, since we will continue to expand our collection.

We currently offer the following types of market research reports on the savoury snacks market: 

• Company profiles, e.g. the premium company profile of Frito-Lay
• Case Studies, e.g. "Kettle Chips and Tyrrells case study: effectively marketing authentic potato chips" or "Frito-Lay case study: maintaining growth through innovative marketing and product development".
• Savory Snacks Databooks: Datamonitor Databooks – are a detailed information resource covering all the key data points across all industry verticals. The series includes comprehensive value volume segmentation and market share data across 50 international geographic markets. E.g. Savory Snacks in North America to 2011
• Savory Snacks Industry Profiles: Datamonitor industry profiles are designed to provide top-level data and analysis covering a particular industry and provide the most important facts such as size, segmentation and forecasts. These profiles are not designed to provide an in depth or detailed view of a market. The data contained in the Datamonitor industry profiles is also based on Datamonitor's own primary quantitative research. E.g. Global Savory Snacks
• Savory Snacks: Global Industry Guide: Datamonitor Industry Guides are compilations of a number of recent region and country specific industry profiles. E.g: Savory Snacks: Global Industry Guide is a compilation of industry profiles titled Global Savory Snacks, Savory Snacks in Europe, Savory Snacks in Asia Pacific, Savory Snacks in France, Savory Snacks in Germany, Savory Snacks in Japan, Savory Snacks in the United Kingdom and Savory Snacks in the United States

More Market Research Reports

Featured Book

Snack Food Processing
This book is the definitive book on developing, preparing and processing shelf stable savory snacks. Chapters cover a wide range of topics, including ingredients, raw materials specifications, equipment, materials handling, sensory evaluation and quality control methods, and the preparation and processing of specific snack products.

More Books

Featured Product

The Smart Spud can help prevent bruised potatoes from going into storage or onto the retail shelf. The Smart Spud is a wirelessly monitored device simulating a potato. Using the Smart Spud you can cut potato bruising and damage by at least 10% of your current rate, adding that much more profit to your bottom line.

Read more...

More products

Featured Article

We have seen drastic price increases in various input costs of potato cultivation, such as the rise of energy costs and the costs of fertilizer. The price of oil has come down since and is now at levels lower than we have seen in a long time.

Today's featured article addresses the price of fertilizer. It is the fall issue from the "Nebraska Potato Eyes" that we have featured here before.

The publication shows that global fertilizer prices at bulk level are coming down rapidly. A must read before you negotiate the price of your fertilizer supply. Also provides some tips to save fertilizer.

News

French Fries and Potato Specialties

Chips and Snacks

Dehydrated Potato Products

Potato Starch

Other Potato Products

Processing Equipment

Potato Supply Chain

QSR Restaurants

Health and Nutrition

Energy and Environment

Food Trends

New Companies

Previous Newsletters

• Idaho Potato Harvest 2008
• The NuVal or ONQI Score of Potato is 93
• McDonald's introduces New global Packaging Design
• McDonald's French Fries: MacFries or McFries?