"Over 90% of bagged snack space is given to crisps and baked snacks which is holding back nut sales. This is in sharp contrast to mainland Europe where nuts average 25% of bagged snacks shelf space and consumption is at least twice as high as in the UK. Snack nut consumption could be doubled here if retailers gave nuts the space and support. At the same time the sector needs re-invigorating with more advertising and promotional support," Jennings says. One of the challenges to growing the category is that it is dominated by own label, with only one big brand ­ KP Nuts ­ and a few smaller players such as Trigon's Planters and Percy Dalton to give it the marketing push. The market is worth about £154m and own label's share of nearly 70% is exceptionally high (ACNielsen). KP's 24% share of the total nut market is worth £50m (IR). Jennings believes growth can only come from brands and the support they are given. Consequently his company is about to branch into the branded arena with Nutberrys, a premium range of savoury and confectionery nuts that will be launched in September. That will be followed by a non-premium branded range. Jennings says: "The greatest area of potential is luxury nuts, such as cashews and pistachios, where the market has seen 7% growth year-on-year through consumers trading up. We also see flavoured nuts as the next area of growth." Other initiatives are needed to reinvigorate the market, says Jennings. "Quality standards in the industry need to be improved with origin traceability and proof of testing for aflatoxins on products. Aflatoxins are found in most nuts and can be carcinogenic in high quantities. The UK is reckoned to have the worst record in northern Europe on testing for them. Tesco and Somerfield are taking action by insisting that their nut suppliers offer origin traceability' and proof of aflatoxin testing from now on. "At the same time consumers need to be educated about the health aspects of nuts and there's a need for better quality packaging formats." KP Nuts has already taken the lead on improved packaging, product visibility and marketing investment to boost sales of its brand, which have fallen nearly 2% (IR 52 w/e 21 Apr 2002). In April it revamped its nut range with a new pack design and logo. The aim, says marketing director Mandy Ferguson, is to convey the fun and sociability of nuts and bring a more contemporary look to the brand. "There is a strong focus on peanuts because KP Nuts is synonymous with them," adds Ferguson. At the same time the company has introduced ready merchandised display cases and carded tower displays for counter tops, plus pack strips for off licences and pubs to increase merchandising opportunities. "Visibility is important, particularly outside the Christmas sales peak," says Ferguson. "Consumers need reminding about nuts and, displayed prominently in the right units, sales can be easily lifted." The PoS units are part of KP's £4m spend on its nuts brand this year. {{FOCUS SPECIALS }}

Topics