If there is one category that we could say is most representative of how we live today, it would probably be snacks. Snacks, in their variety and availability, perfectly express the nature of modern on-the-go consumption.
Where we buy these snacks also sums up modern lifestyles to a great extent: the convenience store. Of course we also buy them in cafés and other foodservice outlets, in pubs and bars, and even (so they say) in supermarkets.
But the heartland and homeland of snacks is surely Convenience, the natural place to grab a bag of crisps when you are on the way somewhere and feel peckish and in need of a pick-me-up.
Matt Collins, Trading Director at KP Snacks, is therefore in a good position to understand the present and future of both snacks and Convenience.
Although still young he has a lot of experience, first spending nine years at Premier foods before moving to KP Snacks seven years ago.
I say to Matt that most people have no idea just how many brands KP now owns and how wide their presence is in the market.
“I always hear that people don’t always associate the brands with KP Snacks, except with KP Nuts, and they are not aware of all the brands we have in the portfolio,” answers Matt.
“That has come over a journey since 2013 when we were divested from United Biscuits and were acquired by Intersnack. Intersnack came together with brands like Penn State, Percy Dalton and Pom Bear, together with a core KP portfolio which was led by McCoy’s, Hula Hoops, and some of the more iconic brands such as Skips, Discos, Wheat Crunchies, Frisps, Space Raiders, Choc Dips …”
The list goes on and I suddenly realise I live in a KP Snacks family.
“We have been on quite an acquisition spell,” he says. “We acquired Butterkist in 2017 from Tangerine, which was great, because that gave us acceleration into popcorn. Then we went on to acquire Tyrrell’s and Popchips in 2018. Tyrrell’s really gave us an opportunity to get into the premium, hand-cooked crisps segment. And then Popchips was the number-one Better For You permissible snack and is really a growing brand.”
KP Snacks culture
This breadth and variety plays into Matt’s philosophy of the market, which is a generous one of matching range with need and frequency, and extending sales and revenue by growing the category as well as the brand, with the belief that a bigger category floats every competitor’s boats more buoyantly.
“So what [Intersnack] gave us was the complete portfolio solution. So from Better For You to premium with high household penetration brands in the middle – effectively catering for every need state, occasion and mission and having a brand that can play its role.”
Just reeling off the names of all the brands KP Snacks now owns is impressive: from the well-known KP Nuts to Nik Naks, it is amazing to realise that Brannigans and Roysters, as well as Penn State among others, are also in the KP stable.
The company is also ahead of the game in health – which is just as well now that the prime minister has decided that because he has lost some weight, we should too: “Our health platform is called Our Taste For Good and one of the platforms within that is called Good For Our Consumers,” Matt explains.
KP also states that it does not use any hydrogenated fats in its products (the cheap, unstable and fracked oils high in Omega 6 fatty acids).
“That’s making sure we have a balanced portfolio that offers products to fulfill different roles – whether it’s a treat, a Better For You product, a baked product, or popped – hence Popchips was really important acquisition to accelerate in that space.”
It is testament to Matt’s outlook that co-operation and creativity have been at the heart of the recent growth.
“That is something we’ve been really passionate about since 2014 when we formed what was effectively a category-management platform called KP Snack Partners,” he says, “underpinned with a really straightforward charter and a simple aim: how do we grow the category? Not ‘How do we grow our share?’ but how do we do the right thing for the category, and then having the confidence that if we do that, then we will grow with it.”
Constant retailer feedback from the “partners” (“We have a team of 15 ambassadors we partner with and who give us constant feedback about what’s selling and what isn’t, what consumers are looking for and what they are not”) generates what Matt calls the ability to pivot – never more needed than now.
“And we truly believe in partnership. So we try to approach it on a real category basis. We offer balanced and unbiased advice on how to grow the category. So it’s not about our products, or about competitor A or B, but what is the right range for that store – the combination of best-sellers, NPD, different products to meet different occasions in-store.”
Matt says that good snack merchandising is about merching across categories, partnering with other purchases and growing the basket-size
“How do you, off the main fixture, maximise it?” he asks.“We understand we have category drivers, one of them being Perfect Pairings. So how do you pair the sharing bag of crisps or the sharing bag of KP Nuts with a bottle of wine or bottles of beer or gin and tonics?”
This is where the creativity comes in: the imagination of matching, the consultation with retailers supplying feedback from customers, so you can pivot and update the offer to address the latest need-state.
“You are trying to drive that affinity and so drive the weight of purchase,” says Matt.“Within it, do you maximise an event? This year we have a huge campaign which unfortunately we couldn’t go forward with because of Covid-19, but it was linked to the Summer of Sport and the Summer of Sharing. The sport one would have been perfect with the Euros and the Olympics.”
I hate to talk about it yet again, but the Covid-19 effect is unavoidable as a topic, not least because of what the lockdown did to on-the-go purchases: school, commuting and simply going outside, running around – all stopped almost dead by the lockdown. All those occasions evaporated – and I have heard the word now from many sources – “overnight”.
And as well as the change (not necessarily collapse) in demand, there was a need to pivot, also overnight, to deal with the new reality. Such a situation is a logistical nightmare and a leap into the unknown for any firm – but one as varied and vastly distributed as KP Snacks?
“So, as we came into the lockdown, the point was to keep the supply chain moving,” says Matt.“ Also, as a business we hadn’t furloughed anybody. We had a percentage of the workforce who were self-isolating, and that impacted production. We also had a percentage of the workforce who were deemed vulnerable and had to shield for ten to 12 weeks.
“The good thing is that we are predominantly a UK-based manufacturer, so in terms of production and output, whilst we are reliant on some of our materials and ingredients and packaging from abroad, a lot of it is within the UK. As a business we have started to have people back in the office from early July on a skeleton basis.”
It is interesting that the UK is so self-sufficient in terms of snacks – almost as if it says something about us as a nation.
“Yes,” Matt laughs, “working in crisps, snacks and nuts, it has high household penetration, and the randomly-used fact we have is that it’s got higher penetration than toilet roll! I’m not sure what that says about the British public.”
Perhaps it nods towards the British sense of humour: that we knowingly take relatively unimportant subjects very seriously so perhaps we can handle the big stuff – like pandemics, for example – with calmness and even irony. Crisps are essential to the functioning of the country!
“You can debate whether crisps, snacks, nuts and popcorn is ever an ‘essential’ food group – probably not – but it offers variety, offers a bit of luxury and a bit of a treat,” reasons Matt.
“I just felt incredibly proud of working in an industry deemed essential, and to maintain the supply chain to keep feeding the nation. We have had to put lots of practices, processes and policies into sites at quite a big cost to make sure people were able to socially distance and make the workplace safe.”
“We can now book a meeting room for up to six people and there’s some hot desks available. So, tiny footsteps back. “
And in between, during the panic-buying and lockdown, with all the supply problems we heard about, somehow KP kept the trucks rolling and the snacks coming. While some brands and product types (like toilet roll) vanished from the shelves of independents, KP showed its steel.
“We worked really hard,” Matt nods, “our availability was excellent, we did minimal rationalisation – just took a couple of lines out that were very complex and would probably have compromised our social distancing and hand-packing lines. Then we streamlined the output and within that maintained our support, so we didn’t reduce promotional activity, we didn’t remove any support whether it was for grocery, to wholesale or convenience – we kept the supply chain moving.We worked really hard to make sure that everyone had a balanced and equitable supply, and we were able to meet demand.”
But what was the effect on the business of such a cataclysmic event as the lockdown? A nation’s entire routine, and so its need-occasions and its demand for certain products and packs, shifted – pivoted – on a dime.
“We had a huge part of our business linked to the out-of-home, food-service and hospitality business, particularly our single-eat, on-the-go products,,” Matt says.
“Overnight, footfall on the high street dropped, in the workplace – at one point 60 or 70 per cent of the population was working from home, and I think 30 per cent intend to continue to do so – and that’s just taken huge volume out of the high street which was previously going to places like Pret, Gregg’s, Subway, whatever it might have been.I know crisps was always going to be a component of that, like with the meal-deal, and food to go, which had really been a hero category for three years.”
Local heroes, Local Legends
The effects of this change were naturally devastating to the foodservice industry, and it is unclear what sort of recovery can be expected. In Convenience, though, a very different story emerged from the fog of the pandemic.
“One thing we’re seeing through all of the danger and insight, is that convenience retailers – it is always a bit difficult to say there are winners, but there are –have really won out in this,” Matt says.
“Because it’s been independents and symbols, where people have shopped locally, and haven’t wanted to travel and haven’t wanted to queue in big supermarkets or go to busier locations. They have gone to their local shop, which has worked in the community – and hopefully what they have then seen is that the availability is great, the range is great, the value for money is great.”
KP Snacks and Convenience are joined at the hip– it is an essential, even heraldic presence in the channel, and the pandemic seems to have cemented that relationship or tradition even more firmly.
“Therefore,” Matt asks, “how do we help Convenience retailers retain not just the new shoppers they have won but also the bigger baskets they have won? What role are we playing in a category where crisps, snacks and nuts – a £3.3 billion category, a major-scale category? How can we play a small part in it to help those retailers retain the business they’ve won?”
This is a rhetorical question that brings Matt to what he obviously feels passionate about: “Which is our Local Legends platform.”
KP Snacks has just announced a nationwide campaign to reward convenience retailers, and is offering a £40,000 prize fund– providing 40 separate prizes worth £1,000 each.
The Local Legends campaign is a significant retailer incentive programme to recognise partners as Local Legends themselves and the prize draw will run throughout August to October with specific dates for participating customers.
“We want to help independent retailers retain the business they have won [during the lockdown] so that increase in shopper numbers, new people visiting their stores for the first time, and the bigger baskets – help them retain that,” says Matt. “But then also importantly to reward them for their resilience.We really appreciate it. These people have really put themselves on the front line during the pandemic.”
KP Snacks is also running Local Legends in support of GroceryAid, “Which has a huge awareness amongst the traditional top four grocery multiples, but less in parts of the independent channel. GroceryAid has their special Covid-19 fund, so if we can help to drive awareness of that fund then it helps us to do the right thing.”
Convenience-store owners, who will be gratified that they are being recognised by the Local Legends campaign for their stalwart service and often heroic community support activities, have been clutching the tail of a tiger since March. No days off, hardly any sleep for many – and footfall up by half.
I have questions about how demand has changed and how it looks to shift again in the future. Matt has strayed into my lair and will not escape without sharing his wisdom – and data.
“We’ve seen a huge shift in consumption,” he says, straight up.“Firstly, out-of-home closing overnight with all of that spend reverting to in-home spending. In-store that means we have less of the food-to-go occasion, more of the lunchtime occasion, the BNI occasion, the sharing occasion, the pairings, with beverage of your choice. We have seen that.”
With it comes a demand for larger packs, a possibility of more pairings, more and different occasions …
“The question of how much these behaviours stick, ultimately I haven’t got a crystal ball,” warns Matt.
“I think there will be fundamental shifts in consumer behaviour – the big one being with more people working from home. Firstly, people have discovered the ability to actually work from home, and while that can’t always replace the personal contact and personal relationships, it can still be much more efficient in reducing travel time and travel costs. So I think that will be a shift, but whether it’s going to be that statistic of 30 or 40 per cent of people saying they want to work from home more?”
He leaves the answer hanging in mid-air but adds: “People are rediscovering family time, where before they have been so busy they have missed out on that family mealtime joy, of just being with the family and being able to have dinner every night at home, because they are working from home.”
A cultural change will be followed by a commercial one, and success is down to how fast a producer (or a retailer) can pivot, or remain alert and have good “optionality” towards a changing and uncertain situation – indeed, Matt explains an acronym we will probably be coming across much more frequently in the future.
“What’s going to stick in terms of new behaviours, new occasions, new ways people have of socialising and working?” he asks.“And then equally we all need to learn fast, accelerate, and pivot in our plans because the one thing we can all be certain of is that the world is going to remain in the VUCA environment – Volatile, Uncertain, Complex and Ambiguous.”
That sounds nice, I gulp. What is Matt’s solution at KP?
“Ultimately it’s about making sure we offer the right range,” he answers.“There is going to be a blurring of missions. We are seeing it within the landscape at the moment, of wholesale going direct to the consumer; pubs offering convenience-store ranges; convenience stores partnering with Deliveroo.
“There is a blurring of channels which will continue, and within that, also the blurring of missions and occasions. And it depends – as has been a common theme throughout this discussion – on how much people have changed their behaviour and adapted to new ways of working and living and how much of that sticks.”
The idea is to keep your antennae up and whirring around. “We have to try and take whatever learnings we can, whether it’s from Asia or Europe if they are ahead of us, and what they have experienced in terms of shifting behaviours,” Matt says.
“On-the-go is going to recover. Food to go is going to recover. But to what levels, we don’t know. Big Night Out to Big Night In is going to continue to be a trend, which we typically see as we go into autumn and winter anyway.”
He says that when these trends become “macro” trends, the question becomes how do we harness them and work with retailers inform them on the right range to stock? But that is not revolution, he says, that’s evolution:“It’s tweaks. We need to make sure the customer is not given a reason to go anywhere else.”
This brings me to a couple of subjects I want to know about regarding KP Snacks: NPDs and PMPs (we can all play this acronym game).
“PMPs are hugely important for the channel and we are committed to them,” Matt reassures.“There’s a huge, accelerated growth in them, especially the £1 PMP range, which has worked for multiple reasons. First, how people budget – if it’s a “round pound” then it help retailers with their pricing architecture; it helps consumers to be reassured about value and they are really clear about what the price is – they’re not having to look at the shelf-edge or maybe be surprised at the till point.But equally we’ve got to make sure we are supporting the channel as we are doing PMPs by offering competitive margins.”
NPD is getting back to normal after all sorts of development was interrupted by lockdown. “At the time it was clear you had to rationalise the range and maximise output and protect the core range,” Matt says.“Now everything has stabilized, there is no doubt there is a role for the NPD, but first is to develop the right NPD.”
The right NPD is the charm. Most new products (something like 90 per cent) fail, and this is for a good reason: “There is so much NPD on the market which is just a ‘me too’ variation,” Matt says. “What it has to be is an NPD that offers something a bit different, that is incremental, and that brings a bit of excitement. One was McCoy’s Muchos. We launched that at the start of last year, and that was the biggest new brand in the category last year – a £10 million RSV brand. We were delighted to win many accolades including the Asian Trader NPD of the year!”
McCoys tastes great and Asian Trader has great taste, so there you go – a match made in heaven.
“I think NPD remains really important in the market-place, particularly in this category,” Matt says, “and there is still a role for NPD regardless of what was happening in society.”
He adds, intriguingly: “Now, we have some really exciting NPD for next year but it is under disclosure at the moment, so I can’t say what it is! But it’s always about how can we drive that flavour and extra experience.”
Summing up, Matt says that he thinks the future is bright.
“There is a really good affinity between convenience retail and crisps, snacks, nuts and popcorn, It’s a scalable category that will continue to grow through best-sellers and core range, but also by having that sprinkle of NPD for excitement and new news, to generate some uplift and sales.”
Matt says that his role is “to represent his teams and the customers internally at KP and, to be avoice helping to shape plans and guide thinking, in order to help maximise sales, strengths and our capabilities:“And I do that by representing the customer within our business.”
It is clear he loves the snacks category and the impulse channel, both. “It is so fast-moving, so scalable and expandable, he affirms. “It’s definitely easier selling crisps than selling baked beans or ambient custard at Premier – all great brands, but in terms of my passion and being able to talk about it, I really believe in the KP Snacks brands.”
Finally, I ask Matt how he sees the future and whether it’s a good one. “You have to be an advocate to really sell, and I am a huge advocate,” he says, and what he sees is “More happy snacking moments.”
Amen to that.