Oh, the Problems of Being in Niche Market and Doing Too Well

Oh, the problems of being in niche market and doing too well…

Red Sky is a new brand in the fast-growing premium crisps segment. Who makes it? You might struggle to identify the manufacturer from the packaging. The answer is Walkers (What Lays are called in the UK), the dominant market leader in the mass market crisps sector in Britain. Walkers is owned by global food giant Pepsico. Red Sky, initially available in 150g ‘sharing’ packs have gone on sale, with refined flavours such as roasted red peppers & lime, Anglesey sea salt, sour cream and green herbs and West Country bacon and cream cheese. It has been developed to attract older, more affluent customers. The range uses only natural ingredients, with Walkers targeting upmarket rivals such as Tyrrells, Kettle Chips and Burts, as well as aiming to grown the premium crisp segment by attracting new consumers. The Walkers name is not featured on the new brand, and the company believes it will typically appeal to an older customer base than the established Walkers Sensations premium range. The name is taken from the saying ‘Red Sky at night..’, which is nature’s promise of a good day to follow. The brand’s ‘natural’ positioning is carried through to the paper packaging, with as much of the pack as possible sourced from forests accredited by the Forest Stewardship Council. Each Red Sky pack also carries a pledge to preserve an area of rainforest. Its entry shows the strength of premium “sharing” crisps – the kind served as nibbles when friends come round rather than scoffed with sandwiches at lunch. According to market research company TNS, shoppers spent £368m on ‘sharing crisps’ in the 52 weeks to 25 January this year – up 8.7 per cent. The market leaders are Pringles and Doritos (owned by Pepsico, which owns Walkers), but smaller “super-premium” brands have done well in recent years, among them Kettle, Burt’s, and Tyrrells.

IB Business & Management The problems of a successful niche [email protected] Simon Quirk, TNS client manager, said: The average packet of crisps isn’t going to look good when you’ve got friends coming round. The flavours and packaging [of the premium crisps] are more exciting and they’re more appealing for that sharing occasion.” More broadly, credit crunch shoppers are treating themselves to small indulgences. “Where people are cutting back they’re doing it on different tiers,” Mr Quirk said. “ They might be cutting back on their groceries and cutting back on going out to restaurants. But they have also moved from eating at a restaurant to staying at home so they’re happy to indulge themselves at home in the knowledge that it will still be cheaper than going out.” Sources: The Independent and Tutor2u.net

IB Business & Management The problems of a successful niche [email protected]