On the hunt for a few fresh crisp ideas

If the World Cup didn't boost Golden Wonder sales, what will? asks Hilary Clarke

CLIVE SHARPE, chief executive of Golden Wonder, the country's third biggest snack company and second largest manufacturer of crisps, has one big worry. Will the nation, which consumes the most packet snacks and crisps in Europe, continue to munch its way to an even bigger market than the current pounds 2.2bn one?

If it does, then there should be a bigger bite of it available for all crisps and snack manufacturers, not least Golden Wonder which has seen its sales soar since Sharpe led a pounds 68m management buyout three years ago.

If it doesn't, then the the brand name may lose some of its shine. This would make the promised flotation of the firm over the next 24 months more difficult to achieve.

"Historically the snacks market would grow every year, but in the last 12 months that rate of growth has fallen away," said Sharpe. For the year ending June 1998, bagged snacks value growth fell from 3.8 per cent to 0.8 per cent, and the rate of growth for crisps fell from 3.2 per cent to a negative 0.2 per cent.

Nor did the World Cup provide the much-hoped-for boost in sales, in spite of the increase in sales of alcohol.

Sharpe believes the reason for the decline is a lack of new ideas in the industry - both in terms of new products and ways of marketing them. "Pringles has shown if you get the right product, with the right composition you can be very successful." The potato snack, owned by Procter & Gamble has more than half the UK packet snack market.

Whilst the R&D departments of PepsiCo's Walkers, United Biscuits and Golden Wonder scratch their heads to come up with the next Wotsits, Quavers or Pringles, the marketing men have been busy with promotions of the "buy 10 bags of crisps and get two free" kind.

"They have only been thinking short term - what people are doing is giving stuff away rather than selling it. That encourages volume growth rather than value growth," said Sharpe.

Under his leadership, Golden Wonder has invested "at five times the rate of previous years, and more than 10 times that of most of our competitors to ensure Golden Wonder plays a major role in the UK snacks market."

Last July Golden Wonder announced a pounds 30m investment, including a new factory in Scunthorpe which, as well as providing a state-of-the-art production line, will also be used to research new snacks.

The other way Sharpe plans to stay on top is by improving its distribution.

"Because it's an impulse product, it's low price, it's fun; one of the key factors for success is to make it available," he said. "We have spent a lot of money and time putting the resources in place to make our products more available."

Whilst distribution to the big supermarket chains, around 55 per cent of the business, takes care of itself through centralised distribution outfits, Sharpe said the legwork is in selling the product to other "impulse" outlets - pubs, petrol stations, clubs, corner shops.

The City has a high view of Sharpe and all he is doing at Golden Wonder.

"In the snack business good management is crucial, and I believe they have found the right formula at Golden Wonder," said one city analyst.

"Golden Wonder has put together a decent strategy in terms of market share and financial performance. They've still got the shadow of PepsiCo out there, but UB's position has weakened," said John Elston, analyst with Panmure Gordon.

Apart from PepsiCo with Walkers, Procter & Gamble with Pringles, and United Biscuits with KP, there are a number of other small competitors, including the Middle East-owned Snack Factory and Bensons, the only UK snack company listed on the London Stock Exchange.

Last year Golden Wonder, which has a 19 per cent share of the total crisp and snacks market, increased its turnover to pounds 152m from pounds 103m in 1995, the year of the MBO.

None of them are likely to improve sales through exports, especially in crisps which, says Sharpe, "are bulky and have a short shelf life." As a result, the crisp market in Europe is very fragmented.

The only Golden Wonder exports are ones to Spain to serve the ex-patriot community there, and the Armed Forces stationed in Germany.

Acquisitions of smaller brands may be another Golden Wonder strategy for expansion - but for the moment Sharpe is keeping his mouth shut about possible purchases.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Sport
Wes Brown is sent-off
football
News
i100
Sport
Italy celebrate scoring their second try
six nations
Sport
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
music
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower