Health and Wellness Series - Healthy Biscuits, Snacks and Snack Bar Trends in the United Kingdom

March 2017

Contents

• Executive summary
• Introduction
• Growth perspectives
• Subsector analysis
• New product analysis
• New product examples, 2016
• Conclusion
• For more information
• Resources

• Canadian dollar (CDN$)
• United States dollar (US$)
• Compound Annual Growth Rate (CAGR)
• Harmonized System (HS)
• United Kingdom (UK)
  Health and Wellness (HW)
  Fortified and functional (FF)
  Naturally Healthy (NH)

Executive summary

• Healthy snacks, snack bars and biscuits are essential features of the British diet. In 2015, the United Kingdom represented the largest market in terms of retail sales for all three of these sectors.
• Health and Wellness snacks, snack bars and biscuits all show a high degree of innovation in the United Kingdom. In 2015, the number of healthy snacks identified by Mintel greatly increased, and 2016 is set to see as many new products.
• Health and Wellness snacks, snack bars and biscuits show different degrees of brand concentration. Snack bars feature a few large, international brands with large market shares, whereas biscuits feature two strong brands and a number of smaller players. Snacks are dominated by private labels, although a few global brands have important market shares.
• The United Kingdom and Canada enjoy preferential trade agreements due to the United Kingdom's presence in the European Union, including the upcoming Comprehensive Economic and Trade Agreement (CETA). While the recent referendum vote in favour of leaving the European Union makes the future of these trade agreements uncertain, there are no present indications that CETA will not go through.

Introduction

Health and wellness snacks, biscuits and snack bars are popular in the United Kingdom, largely due to the fact that UK consumers value healthy and convenient food (Euromonitor International, 2015). In particular, breakfast bars, such as flapjacks (a British specialty), are important parts of the British national diet. Fortified and functional breakfast bars and energy bars allow consumers to get crucial nutrients on the go, whereas naturally healthy fruit bars and granola bars allow them to pack fruits and grains conveniently into their lunches. Snacking is particularly British. The United Kingdom was responsible for 34% of health and wellness (HW) snack bar sales, 30% of HW biscuit sales and 23% of HW sweet and savoury snack sales in the European Union (Euromonitor International, 2016). In all of these sectors, the United Kingdom is the single largest market.

Snack bars, as a category, face competition from biscuits, which usually have a higher caloric content, more fat or more sugar. While biscuits are usually considered less healthy than snack bars, the health and wellness biscuits market sector is more than 50% larger than the health and wellness snack bars category. This suggests that when British people do choose to indulge themselves, many are still health-conscious. Reduced fat biscuits comprised nearly half of the health and wellness biscuits category in 2015, and fortified and functional biscuits were grew faster than any other HW biscuits subsector between 2011 and 2015.

Healthy snacks in the United Kingdom (UK) include nuts, dried fruit, crisps (chips), sweet snacks and more. The vast majority of nuts and dried fruit can be categorized as health and wellness, since they are by definition either naturally healthy or organic (Euromonitor International, 2014). Reduced fat snacks predominate among other sweet and savoury snacks, forming 98% of the subsector. Reduced salt snacks make up the rest of the subsector, and are forecasted to decline.

From 2010 to 2015, health and wellness snacks, biscuits and snack bars all grew at impressive rates, especially when compared to the overall packaged food sector. Further growth for all three sectors is expected through 2020, but it is expected to slow down.

Snacks, biscuits and snack bars in the UK often contain Canadian ingredients or ingredients that Canadian producers could easily supply, such as pulses and maple syrup. Several of these products have been highlighted.

It is worth noting that Canadian companies enjoy privileged access to European Union markets such as the UK. For example, organic certification from Canada is recognized in the UK due to an equivalency agreement signed in 2011 and expanded in 2016. Additionally, the pending ratification of the Comprehensive Economic and Trade Agreement (CETA) will eliminate or reduce most of the remaining tariffs placed on Canadian goods entering the European Union (EU) market. However, given that the United Kingdom elected to leave the European Union on June 23rd, 2016, the future of CETA and its relevance to the UK remains uncertain. Nonetheless, the government of the United Kingdom has expressed its support for CETA even in the wake of Brexit (Canadian Press, 2016).

Growth perspectives

Health and wellness snacks comprise two sectors as defined by Euromonitor International (2016): sweet and savoury snacks, and biscuits and snack bars. In 2016 these were, respectively, the fourth and sixth largest health and wellness packaged food sectors as measured by retail sales. Both of these sectors, as well as all of their associated subsectors, grew at a faster rate than packaged food overall.

Through 2020, the growth in snacks, biscuits and snack bars is expected to slow down. Growth in HW snack bars, for example is forecasted to be 2.36%, measured by compound annual growth rate (CAGR), from 2016 to 2020, compared to 2.54% for packaged food in general. Fruit snacks are forecasted to grow at 4.15% CAGR, showing the greatest growth of any subcategory.

Subsector analysis

Health and wellness snack bars

Health and Wellness snack bars are growing overall, but subsector analysis shows that different subsectors of the HW snack bars are experiencing radically different perspectives. Fortified and functional (FF) energy and nutrition bars and naturally healthy (NH) fruit bars have grown massively from small bases. Meanwhile, naturally healthy granola bars have risen at a steady 5% compound annual growth rate (CAGR) to become the largest HW snack bars subsector. Fortified and functional breakfast bars, the largest subsector in 2010, grew for two years but have since fallen significantly, such that their CAGR over the reporting period was −1.58%. They have thus fallen to second rank.

Over the forecast period, 2016 to 2020, fortified and functional energy and nutrition bars are expected to maintain their momentum, with 10.33% CAGR through 2020. Naturally healthy fruit bars, on the other hand, will continue to grow, but at a slower rate, growing at 1.68% CAGR. Organic granola bars, fruit bars and other snack bars will continue to grow, but since their bases are small and their growth rates are projected to be low, these markets will continue to be small parts of the overall sector.

General Mills' Nature Valley has grown to be the single largest snack bar brand in the United Kingdom, largely due to the fact that Kellogg's Special K has lost more than half of its standing. Private label brands have decreased in importance, and now occupy only 2.1% of the Health and Wellness snack bars market.

Health and wellness biscuits

The growth of health and wellness biscuits outpaced that of HW snack bars over the reporting period. This was driven by growth in all subsectors, but particularly in the fortified and functional biscuits subsector, which nearly quadrupled in size between 2010 and 2015. Growth in gluten-free biscuits was also high, at 12.91% CAGR.

Over the forecast period, further growth is predicted, but at a lower rate. Fortified and functional biscuits will grow in line with the overall sector, and organic biscuits will experience more growth than they did between 2010 and 2015.

The Health and Wellness Biscuits subsector has seen a number of mergers, acquisitions and spin-offs over the years. During that time, Belvita brand snack bars have grown from 2.3% of the market under Kraft to 18.1% under Mondelez. McVitie's has grown slightly in market share, and is now the second largest brand in the United Kingdom. No other brands come close in terms of market share, and the rest of the market is thus divided amongst several smaller players. Private labels occupy more than one fifth of the market, and their market share has grown since 2010.

Health and wellness sweet and savoury snacks

When analyzing sweet and savoury (SS) snacks, it is important to draw a distinction between fruits and nuts and other snacks. Nearly all fruits and nuts can be categorized as naturally healthy, and most of the rest are organic (Euromonitor International, 2014). As such, the tables below show growth and forecasts for nuts, fruit snacks, and other snacks.

Naturally Healthy nuts made up 98.1% of the Health and Wellness nuts sector in 2015, and Naturally Healthy fruit snacks made up 98.2% of their sector in the same year. Organic nuts and fruit snacks are both expected to increase over the forecast period, and in the case of Organic nuts, subsector growth is expected to be faster than growth in the overall Health and Wellness sector.

Sweet and savoury snacks, excluding fruit snacks and nuts, are mostly reduced fat. In 2015, 98.4% of other sweet and savoury snacks fit into this category. The remainder were reduced salt. Reduced salt snacks have been declining since 2012, and further decline is forecasted through 2020.

Private labels made up more than half of the health and wellness sweet and savoury snacks category in 2015. Otherwise, the market is highly segmented, with the top brand being PepsiCo Inc.'s Lay's brand of chips.

New product analysis

New product analysis was carried out by searching through Mintel's Global New Products Database for snack products released between 2011 and 2015 bearing claims that could be classified as “Functional, Gluten-Free, Low/No/Reduced Lactose, Low/No/Reduced Allergen, Natural, Minus or Plus”.

Between 2011 and 2015, Mintel noted a total of 2,731 new product bearing our search criteria launches, 29.3% (800) of which occurred in 2015. So far through nine months of 2016, Mintel has identified 576 new products which bear our criteria. As such, 2016 is likely to see about as many new products as 2015. Some of these are highlighted in the next section.

The most common claim was “Vegetarian”. Among search terms, the most common term was “no additives/preservatives”, which was featured on 1,660 of the products.

Most new Health and Wellness snacks in the United Kingdom were sold for between 0 and 4 dollars US. Shelf stable goods predominated amongst snacks, which is unsurprising given that their purpose is to be easily stored, transported and consumed. New products and range extensions make up a majority of new launches, suggesting a high degree of innovation.

New product examples, 2016

• Apple & Blackcurrant Energy Bar
  • Company: Science in Sport
  • Brand: SIS Go
  • Sub-Category: Snack/Cereal/Energy Bars
  • Country: United Kingdom
  • Launch Type: New Product
  • Price in US Dollars: $1.46
  • Claims: Other (Functional), Vegetarian, Time/Speed
  • Product description: SIS Go Apple & Blackcurrant Energy Bar is said to combine a scientific approach with real fruits and wholesome ingredients. Proven by thousands of athletes in the world's toughest races, it meets their demanding energy needs, and is described as moist, delicious and easy to digest. The energy bar is said to be perfect before or during exercise and as an energy loading snack between meals. The product provides fast energy for longer and harder training, is suitable for vegetarians, and retails in a 40g pack.
• Jalapeño & Lime Lentil Lites
  • Company: Fairfields Farm
  • Brand: Fairfields Farm
  • Sub-Category: Bean-Based Snacks
  • Country: United Kingdom
  • Launch Type: New Product
  • Price in US Dollars: $1.12
  • Product Description: Fairfields Farm Jalapeño and Lime Lentil Lites contain natural flavours and no gluten, artificial flavours, colours, preservatives or Genetically Modified Organisms (GMOs). The product is suitable for vegetarians and coeliacs, contains less than 99kcal and is made using energy from renewable resources. It retails in a 20g pack featuring the Facebook and Twitter logos. The product was on display at the Speciality & Fine Food Fair 2016 in Olympia, London.
  • Claims: No Additives/Preservatives, Low/No/Reduced Calorie, Organic, Vegetarian, Gluten-Free, Low/No/Reduced Allergen, Ethical - Environmentally Friendly Product, GMO-Free, Slimming, Social Media
• Fruit and Nuts Dark Chocolate Snack Bar
  • Company: Biofoodlab
  • Brand: Take a Bite
  • Sub-Category: Snack/Cereal/Energy Bars
  • Country: United Kingdom
  • Product source: Trade Show
  • Launch Type: New Product
  • Product Description: Take a Bite Fruit and Nuts Dark Chocolate Snack Bar is now available. This all natural product is high in fibre, a good source of antioxidants, thiamin and magnesium, and is made with dates, sunflower seeds, flaxseed, almonds, hazelnut, cocoa powder, dark chocolate, clove, cinnamon and nutmeg. It is suitable for vegans and vegetarians, free of added sugar, salt, preservatives, artificial colourings, flavourings, GMOs, gluten, dairy and soy, and contains vitamins A and B1. This product retails in a 45g pack featuring the Facebook logo. This product was on display at the Speciality & Fine Food Fair 2016 in Olympia, London.
  • Claims: No Additives/Preservatives, All Natural Product, High/Added Fiber, Low/No/Reduced Sugar, Low/No/Reduced Sodium, Vegetarian, Gluten-Free, Antioxidant, Low/No/Reduced Allergen, Vegan, No Animal Ingredients, GMO-Free, Social Media
• Sweet & Smokin' Organic Chickpea Puffs
  • Company: Hippeas
  • Brand: Hippeas
  • Sub-Category: Bean-Based Snacks
  • Country: United Kingdom
  • Launch Type: New Product
  • Price in US Dollars: $1.47
  • Product Description: Hippeas Sweet & Smokin' Organic Chickpea Puffs are now available. This vegan product is free from gluten, dairy and corn and contains no Monosodium glutamate (MSG), trans fats or preservatives. It is high in fibre, is a source of protein and contains 91 calories per serving. The product retails in a 110g pack, bearing the European Union (EU) Green Leaf logo. The manufacturer claims to give back for every bag sold.
  • Claims: No Additives/Preservatives, High/Added Fiber, Organic, Gluten-Free, Low/No/Reduced Transfat, Low/No/Reduced Allergen,Ethical - Environmentally Friendly Product, Ethical - Charity, Vegan, No Animal Ingredients
• Extra Protein Maple Syrup, Pecans & Peanuts Bars
  • Company: Eat Natural
  • Brand: Eat Natural
  • Sub-Category: Snack/Cereal/Energy Bars
  • Country: United Kingdom
  • Launch Type: New Variety/Range Extension
  • Price in US Dollars: $2.98
  • Product Description: Eat Natural Extra Protein Maple Syrup, Pecans & Peanuts Bars are now available and comprise nuts, mixed seeds, crisped rice and maple syrup. This gluten-, wheat- and dairy-free product features a 40% increase in protein over the Brazil and sultana bar, is low in salt and contains no artificial flavours colours or preservatives. It is suitable for vegetarians and retails in a recyclable pack containing three 45g units and featuring the Facebook and Twitter logos.
  • Claims: No Additives/Preservatives, Low/No/Reduced Sodium,Vegetarian, Gluten-Free, Low/No/Reduced Allergen, Ethical - Environmentally Friendly Package, High Protein, Social Media
  • Also available: High in Fibre Apple, Ginger & Dark Chocolate Bars, Chocolate Chunks, Peanuts and Seeds Bars.

Source: Mintel, 2016

Conclusion

Health and Wellness snacks, biscuits and snack bars help Britons to satisfy their cravings while minimizing their fat, salt and artificial additives intake or while obtaining nutrition and nutrients on the go. The UK markets for each of these subsectors are the largest in the European Union. The Health and Wellness snack market in the United Kingdom is categorized by a high degree of product innovation. Many new British products feature Canadian specialty crops, such as pulses and maple syrup.

While political and economic uncertainty surround recent votes in the United Kingdom, Canada nonetheless enjoys privileged access to British markets. The upcoming CETA agreement is set to further reduce tariffs with all EU countries, including the UK. The government of the UK remains committed to CETA.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

• Overview of Trade Commissioner Services in the United Kingdom
• Find a Trade Commissioner

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found under Statistics and Market Information at the following link, arranged by sector and region of interest:

• Agri-Food Trade Services for Exporters

For additional information on Salon International de l'Agroalimentaire (SIAL) 2016, please contact:

• Ben Berry, Deputy Director
  Trade Show Strategy and Delivery
  Agriculture and Agri-Food Canada
  ben.berry@canada.ca

Resources

• The Canadian Press (2016, September 5th). United Kingdom still interested in Canada-EU free trade even in the age of Brexit, minister says [News Article].
• Euromonitor International (2014). “Healthy Snacks: Still a Niche Category?”. Category Briefing.
• Euromonitor International (2015). “Biscuits and Snack Bars in the United Kingdom”. Category Briefing.
• Euromonitor International (2016). “Sweet Biscuits, Snack Bars and Fruit Snacks in the United Kingdom”. Category Briefing.
• Mintel Global New Products Database (2016).

Health and Wellness Series - Healthy Biscuits, Snacks and Snack Bar Trends in the United Kingdom
Global Analysis Report
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