Five years ago one in five snacks launched in the UK was potato-based, according to research by analysts Mintel. Last year, this had fallen to one in eight launches (12%).
Meanwhile, popcorn innovation is growing, with popcorn accounting for 7% of snack launches last year – up from 3% in 2010.
Mintel found there was interest from consumers for healthier crisp products.
More than two-thirds (68%) of UK consumers who eat crisps and crisp-style snacks said they would be interested in crisps made with healthier cooking oils, such as olive or coconut. And 45% said they would be interested in ‘superfood’ vegetable crisps.
“Greater use of healthier oils would likely appeal to the majority of users,” added Mintel senior food and drink analyst Amy Price. “Such innovations could also add value to the market, with these ingredients perceived as more premium.
“Currently, examples are rare, indicating untapped potential in this area.”
And popcorn sales have consequently grown 169% over the past five years to reach an estimated £129m ($189m) in 2015. Mintel found that more than a third (35%) of Brits had eaten popcorn in a recent three-month period, rising to almost half (49%) of those aged 16 to 34 years.
Decline in potato crisp sales
In contrast, sales of potato crisps have risen just 8% in the past five years (and have been in decline for the past two according to Mintel), while sales of other snacking products, including other potato-based snacks such as popped chips, have risen 25% in five years.
The value of the potato crisps market is estimated to have fallen to £1.34bn ($1.96bn) in 2015, while sales of potato-based and other snacks have grown to £1.39bn ($2.03bn).
Mintel said the decline in value sales of potato crisps was partly a result of the supermarket price war raging in the UK - with a consequent drop in prices - and partly changing consumer attitudes to snacking.
Discounting to drive volumes
“The crisps market is experiencing deflation, with manufacturers and retailers turning to discounting to drive volumes, and the category is losing out to healthier alternatives,” said Mintel senior food and drink analyst Amy Price.
“Popcorn is the star growth performer in the crisps, savory snacks and nut market,” she added. “Popcorn’s health credentials and flavor innovations have helped boost the segment, along with its popularity among younger consumers, who are more likely to snack.”
But there was some good news for the crisps market, as Mintel found that more than a third (37%) of consumers reckon a sandwich isn’t the same without a crisp on the side.
Branding and innovation expert Claire Nuttall – who has worked with many global food and drink businesses – looks at the development of the UK snacks market
In the past, anything that was a bit healthier and lower in calories tended to have an inferior taste, which was often a no-no for many consumers. They weren't prepared to compromise on taste, and the default was to go for potato crisps.
The snack category has evolved. There are now so many choices, and potatoes are now only part of the mix.
We have seen the evolution from skin-on potatoes, to baked, to kettle-cooked, which all focused on potatoes but moved to include vegetables too. This was the start of the move towards other options as an equally tasty alternative to a potato base.
Vegetable chips were still not the first choice for many consumers as they had the quirk of being 'real' vegetables and came with quite a distinct taste profile
Fashionable and fun
Fashionable and fun healthier options such as popcorn, with its mainstream accessible format which has been known about for generations, were in a great position to incrementally grow the market and we have seen an influx of successful brands emerge.
Popcorn has mainstream appeal and can be used on pretty much the same occasions as crisps. How popcorn has evolved as a category plays to the trend for more provenance and artisan qualities, while intriguing flavor combinations and premium taste profiles hit the spot for consumers as they demand new flavor experiences.
Pulses and seeds
Tortillas and other grains, pulses and seeds will continue to address this need too. Potatoes need to take some of these learnings on board in order to maintain their role and place in the market.
The trend towards lower carb and higher protein diets is also playing a role in people cutting back on potato snacks. New higher-protein or lower-calorie snack choices will continue to grow, and potato brands need to develop solutions that deliver the healthier options consumers expect from modern snacks.
Claire Nuttall is a specialist in breakthrough innovation in the food and drink world and has operated as a senior partner and innovation strategist for over 23 years. Her business The Brand Incubator creates and drives brand and business growth via innovation.