Price hikes on raw materials mean shoppers may soon have to pay more for their snacking habits. Mintec’s Robert Miles reports


When it comes to snacking, there’s nothing many Brits love more than tucking into a packet of crisps. The UK market for savoury snacks grew by almost 6% in 2010, and they now account for roughly half of all snacks sold.

But price increases on raw materials mean it is likely consumers will soon have to dig deeper into their pockets to fund their growing snacking habit. Savoury snacks are largely made of wheat, maize, sunflower oil, nuts and potatoes all of which have seen steep price rises over the past year.

Take wheat, for example. The 2010/11 global wheat harvest is forecast by the Food and Agriculture Organization to hit 648 million tonnes, 5% less than that produced in 2009/10. Yet consumption is expected to be 1.7% higher than last year.

At the same time, ending stocks the amount of grain left over from this year’s crop carried over into the next crop year are predicted to decline by 8%.

With wheat prices in the EU currently up 72% year-on-year, UK wheat suppliers have taken advantage of strong export markets. UK wheat exports were up more than 70% in the first seven months of the marketing year beginning in July which is pushing up the price of UK wheat, meaning we may have to buy back wheat at a high price if the cupboard goes bare.

It is a similar story for maize a major ingredient in snacks such as tortilla chips with world production in 2010/11 forecast to be only marginally up on 2009/10, while consumption is expected to rise.

Grains aside, those companies committed to using 100%-British potatoes in their crisps, such as Walkers, are likely to be feeling the heat, as UK potato prices are up 68% year-on-year, after potato growers were plagued by unusually dry weather last year and heavy rain during harvests.

Global consumption of sunflower oil in strong demand for frying maize snacks is forecast at 11.1 million tonnes, down 0.7% on last year. At the same time, world sunflower oil production during 2010/11 is forecast at 11.3 million tonnes, 3% down on last year.

Packaging prices have suffered, too. The cost of bags has increased by about 30% and the cardboard for boxes is up by around 27% year-on-year.

In short, if Brits aren’t willing to pay more for savoury snacks, they may soon have to cut the amount of snacking between their meals like the rest of the EU!.

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