“Flavoured
Snacks.” Probably not the illuminative
category description in the world – I mean, aren’t all snacks flavoured? – but
it’s what Retail World have decided to call those cracker-like biscuits with
“flavour you can see.” Flavours like
BBQ, Chicken, Pizza, the generic Savoury.
And increasingly flavours like Sweet Chilli & Sour Cream, Honey BBQ
Chicken, BBQ Ribs Blast, Hot Dog, Peri Peri Chicken Slam and Caramelised Onion
& Cheddar (which just goes to show that there may be no category on the
supermarket shelves that has not become foodie-fied).
Other people just call
them “Savoury Crackers.”
Probably the easiest
way to describe the category to an Australian would just be to say, “like
Arnott’s Shapes.”
No surprise then what
the dominant brand is.
“Flavoured snacks”
aren’t only Arnott’s Shapes however. There
are challengers of sorts, or at least wannabe challenges. They are just far, far behind. According to Retail World Annual Report,
Arnott’s were on 84.9% value market share in 2015. No other brand even came close to breaking
double figures.
Fantastic Delite is even heading backwards, hence their pinkish hue in our graph, where green means making market share gains and red means market share losses.
Fantastic Delite is even heading backwards, hence their pinkish hue in our graph, where green means making market share gains and red means market share losses.
There is Fantastic
Delites for the more sophisticated snacker.
And Ritz Snackz for the only slightly more sophisticated snacker. There used to be Ritz In A Biskit, but they
were discontinued in 2014 (unfairly I believe, for whilst In A Biskit’s market
share was certainly trending downward, it was quite a gradual trend and they
were still holding a quite respectable 7% value market share in 2013, which
means that their absence left a significant number of fans feeling distraught)
Arnott’s is not only
the dominant brand in “Flavoured Snacks” but is becoming more so, gaining a
smidgeon over ten percentage points between 2010 and 2015, as other brands have
crumbled away. First they saw off the
threat of In A Biskit – which was, as I mentioned, discontinued in 2014, to be
replaced by the so far not as popular Ritz Snackz which are clearly just TUC’s
in disguise – and appear to be doing the same to Fantastic Delite, the only
brand that has managed to look anything like a competitive threat.
Ritz Snackz have made 4% in market share gains in 2015, but that is off of a previously non-existent base.
Ritz Snackz have made 4% in market share gains in 2015, but that is off of a previously non-existent base.
Fantastic Delite’s
more sophisticated take on the “Flavoured Snacks” category - flavours such as Vintage Cheddar & Red
Onion and Sean Salt & Balsamic Vinegar - gave them just under 10% value
market share at their peak in 2014. They
too however have now slipped backwards, so much so that - as this graph shows - they are not only behind where they were in 2014, but also behind where they were back in 2011.
Pretty much all of the market share gains over the last five years have gone to Arnott's Shapes.
Which would be great news
for Arnott’s Shapes if value growth of the “Flavoured Snacks” market hadn’t
been negative for four out of the last six years.
There has been
something of a come-back over the last year or so, as Arnott’s strategy of
expanding Shapes’ target market beyond teenage boys has begun to kick in. A strategy which we will discuss after the
next graph, on volume growth.
Volume growth is a bit
more irregular, impacted as it is by one-off effects such as the reduction in
pack size in 2011. Still, it shows more or less the same trend; a sharp downwards fall around 2011 and 2012, before a gradual recovery.
Similar to Arnott’s
strategy with Tim Tams (although arguably less dramatically) Shapes’ success –
and their revival of the “Flavoured Snacks” category overall - has largely been
achieved through a constant barrage of new ranges. There was Flavors Of The World in 2009. The
Roadies range in 2011. And the Sizzling
Summer range of 2012. The single year of
2013 gave Australia, the Footy Fever range, the Soundz Range, and the
Sensations Range. 2014 saw the
introduction of the Light & Crispy range, and 2015 the Extreme Range.
This might look like a text-book premiumisation strategy - and perhaps to a certain extent it is - but on a unit price basis, Arnott's Shapes remains amongst the cheapest brands in the "flavoured snacks" segment. This is no doubt an addition factor in their growing popularity over the last five years.
The low unit price of Arnott's Shapes is only beaten by private labels, who despite offering a unit price about half that of Arnott's Shapes have only managed to pull of some rather pitiful market share gains.
These new introductions have spread the appeal of the Shapes brand in two opposite directions – towards the diet conscious sophisticated female, and the footy-loving bogan, reminding the latter demographic of why they loved Shapes in the first place, back when they were a teenager.
These new introductions have spread the appeal of the Shapes brand in two opposite directions – towards the diet conscious sophisticated female, and the footy-loving bogan, reminding the latter demographic of why they loved Shapes in the first place, back when they were a teenager.
Because teenagers,
particularly teenage males, are Shapes natural constituency, as can be seen in
this graph here.
The number of
teenagers have not, sadly, been growing over the last decade or so, due to
Australia’s low birth rate in the 1990s and early 2000s. A quick glance at Australia’s population
pyramid confirms that Australia has been going through a teenage-trough.
Teenagers are no longer a growing demographic
segment will not for at least a couple more years until the kids born during
the mini-baby-boom of around 2006 reach their peak-Shapes consuming years.
In the absence of
their key demographic then, Arnott’s Shapes have gone chasing other demographic
segments. And other flavours, including
those with very un-Shapes like ingredients such as sesame and poppy seeds. Not only has this strategy led to a return of
the “Flavoured Snacks” category to positive growth, but it has negated much of
the appeal of Fantastic Delite, leading to a reversal of their previous strong
growth prospects.
So by the end of 2015
this strategy had both brought the category back to positive growth and
successfully win back share from their closest competitor: Fantastic
Delite.
But then, Arnott’s
Shapes had to go and change the Original flavours (they also added cornflour). BBQ. Chicken.
Savoury. Those flavours not associated with any brand extensions. Those flavours which still made up the bulk
of Shapes’ sales. It was a scandal that
seemed to almost break the Internet.
What, the “Flavoured
Snack” fans of Australia demanded to know, was going on? Is this some kind of manipulative New Coke
publicity stunt, to create a rush on the biscuit aisle as thousands of cracker connoisseurs
panic buy all the “original” flavours they can grab? Or was it to try and gain an extra Health
Star or two?
But “the kids” weren’t
happy.
Hayley Williams from
Lifehacker probably said it best
Well said.
It's probably the biggest backlashes ever to be experienced by the Australian biscuit industry. Which begs the question: if Arnott's Shapes had just under 85% value market share last year, how far are they going to fall? And since they dominate the "Flavoured Snacks" category to such an almost monopolistic extent, are "Flavoured Snacks" due for another fall?
It's probably the biggest backlashes ever to be experienced by the Australian biscuit industry. Which begs the question: if Arnott's Shapes had just under 85% value market share last year, how far are they going to fall? And since they dominate the "Flavoured Snacks" category to such an almost monopolistic extent, are "Flavoured Snacks" due for another fall?