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By: Francisco Redruello

    Consumer demand for nuts has benefited from improved economic prospects and the category’s health positioning within the broader snacks market. Innovation is now focusing more and more on the creation of added value through indulgence and fortification, which will pave the way for future growth.

    Present and future market opportunities are encompassed in six key market points:

    1. Global retail value sales of nuts grew by 4% in real terms (constant 2010 prices, fixed US$ exchange rate) in 2010, an acceleration of one percentage point from the previous year. In retail volume terms, sales grew by 5% in 2010, double the rise registered the previous year.

    Nuts was the strongest performing category in sweet and savoury snacks in 2010, benefiting from better economic prospects in emerging regions and a generally healthy perception among consumers across the world. Likewise, the category’s retail growth over the 2007-2010 period surpassed all other snack categories, despite relatively high retail prices.

    2. Western Europe and North America were the most important regions for packaged nuts, accounting for around 60% of global retail value in 2010. Asia-Pacific and Latin America followed in the rankings, accounting for 19% and 9%, respectively.

    The relatively high share of developed markets is largely down to the premium positioning of nuts and their extensive retail presence in supermarkets in countries like the US and Germany. Research shows that packaged nuts continue to account for a relatively small share of overall sweet and savoury snack sales in countries like Brazil and China, but their rapid expansion in urban areas is turning them into an increasingly common snack among mainstream consumers.

    3. There was an upward commodity price trend for most unprocessed nut varieties in 2009/2010, despite rising production output for almonds, walnuts and pistachios. This was down to stronger demand in emerging regions, especially in countries like China and Indonesia.

    Stronger demand for snacks, on the back of economic recovery and the current trend among international traders to invest in commodities as a safe haven from global stock fluctuations, might underpin further price rises in 2011.

    4. Private label is the ‘largest’ global player in packaged nuts, accounting for around 25% of total retail value sales in 2009. Private label is particularly important in developed markets where the penetration of supermarkets and hypermarkets is comparatively higher.

    In the UK, for instance, private label accounts for around 62% of total packaged nut retail value sales. This share, however, is much lower in emerging economies like China and Russia, where private label accounted for just 1% and 4%, respectively, of overall retail value sales in 2009, according to Euromonitor International’s estimates.

    Among brand manufacturers, Kraft was the most important player, accounting for around 8% of total nut retail value sales in 2009. The company’s most important region is North America, which accounted for around 96% of its total retail value sales.

    5. Nut manufacturers are increasingly focusing on adding value, including the development of hybrid organic and fairtrade lines to meet mounting consumer demand for so-called ethical products in mature markets. Examples include branded varieties like Gebana Bio & Fair Paranüsse, available in Germany and retailing at around EUR22/kg.

    Other brands that are becoming more prominent on supermarket shelves include Almendras al Horno Matutano in Spain, which consists of oven-baked nuts marketed as being ‘baked in a traditional Mediterranean style’. Such products seek to meet consumer demand for more traditional flavours, a trend that is currently quite prevalent in Western European markets.

    Other added-value lines highlighted by industry insiders include Planters Deluxe Mixed Nuts, manufactured by Kraft Foods and available in the US market. The line, which contains cashews, almonds and pecans, has less than 50% peanuts in each package and is being marketed as the ideal combination for a ‘hearty mix’.

    In terms of more recent innovations, Euromonitor International highlights the development of non-traditional categories, which are strictly not classified within the snack category, but include nuts as a key part of their added value. One key example in 2010 was the introduction of Puleva Omega 3 con Nueces (Grupo Ebro Puleva SA), a UHT-milk line including walnuts and cashews in its formulation and marketed as functional because of the magnesium and omega-3 content of the nuts it contains.

    6. Global retail value sales of nuts are projected to grow by 10% in real terms (constant 2010 prices and fixed 2010 US$ exchange rate) over the 2010-2015 period. Moreover, just eight countries will account for 70% of predicted absolute volume growth, according to Euromonitor International’s projections. The US and Indonesia, the largest markets in absolute terms, will account for around 40% of predicted retail volume gains.

    Poland will be the most dynamic market in Eastern Europe, with retail sales expected to grow by 37% in volume and 21% in value over the 2010-2015 period. Strong economic growth and an expanding snacking culture in the country will drive consumption of premium snacks like nuts closer to Western European levels by 2015.

    Meanwhile, peripheral Western countries severely affected by the economic recession will see retail volume sales expand over the medium term as a result of heavy promotional activities from manufacturers.

    This will in turn result in declining unit prices, which will hamper value performance of the nut category as a whole. One key example of this trend will be Spain, where retail value sales are projected to grow by just 4% in real terms over the 2010-2015 period compared with a 9% rise in retail volume.

     

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