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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
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
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
Paul van Eijck
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...
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:
Market Research Reports
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
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.
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.
French Fries and Potato Specialties
More News on French Fries and Potato Specialties
Chips and Snacks
News on Chips and Snacks
Dehydrated Potato Products
More News on Dehydrated Potato Products
on Potato Starch
Other Potato Products
More News on Other Potato Products
News on Processing Equipment
Potato Supply Chain
More News on Potato Supply Chain
on QSR Restaurants
Health and Nutrition
News on Health and Nutrition
Energy and Environment
More News on Energy and Environment
More News on
Barrel O'Fun Snack Foods
Fun produces an extensive line of snack foods
including traditional and kettle-cooked potato
chips, 100% whole kernel corn tortilla and corn
chips, cheese puffs and curls, gourmet popcorn and
baked potato crisps. Barrel O'Fun ships these
products nationwide to retail stores, food service
organizations and private label customers. Brand
names include Barrel O'Fun, Rachel's, Jonny Rapp’s
Baked Fries, Vic’s Gourmet Popcorn and Natural
Spudmaster Taste Sensations, LLC
Taste Sensations LLC. markets manually
produced kettle chips fried in peanut oil, branded
Spudmaster ColossalChips. These chips are extra
large since they are cut lengthwise from the potato
and are promoted as the World's Largest, Most
Unique, Gourmet potato chips.
Foods is a US manufacturer of snacks, mainly under
private label. Axium Foods also markets their snack
using their own brand name Pajedas. Axium Foods is a
subsidiary of McClearys.
HSF Foods Ltd
Ltd (HillSpring Farms) is a Canadian manufacturer of
potato flakes.The website contains a good overview
of the manufacturing process of potato flakes.
Thermo Fisher Scientific
Fisher Scientific Inc. (NYSE: TMO) is the world
leader in serving science, enabling our customers to
make the world healthier, cleaner and safer. Serving
customers through two premier brands, Thermo
Scientific and Fisher Scientific, we help solve
analytical challenges from routine testing to
complex research and discovery. Thermo Scientific
offers customers a complete range of high-end
analytical instruments as well as laboratory